Market Focus

The broad U.S. equity market rallied for the third consecutive trading session. The Dow Jones industrial average rose 0.78% to close at 35,405.24, the S&P 500 climbed 0.69% to close at 4,546.52, and the Nasdaq composite gained 0.75% to close at 14,346. The benchmark U.S. 10 year treasury yield climbed above 1.8% and the 30 year yield sits at 2.117%.

Markets rallied amid strong earnings showings from large technology firms. AMD, who reported a 49% earnings growth, year over year, saw its share price soar more than 10% after the bell. Alphabet also announced better than projected earnings results. The tech giant saw revenue growth of 32% to $75.33 Billion versus the projected $72.17 Billion. During their earnings release, Alphabet also announced a 20 to 1 stock split that will go into effect in July. Shares of Alphabet popped more than 6% during after hours trading.

T-Mobile (TMUS), Facebook (Meta), and Spotify (SPOT) are scheduled to release earnings today after market close.

Main Pairs Movement:

The Dollar Index dropped for the third consecutive day. The benchmark has lost close to 1% since the start of the week. Despite treasury yields edging higher, the Greenback remained weak compared to a basket of other major foreign currencies.

The Euro-Dollar pair gained 0.33% over the course of yesterday’s trading. The Eurozone’s CPI will be release later today and could provide ample price action for EURUSD.

The British Pound gained 0.57% against the Greenback over the course of yesterday’s trading. Expectations of a second rate hike by the BoE has strengthened market participants’ demand for the Sterling.

Gold advanced 0.21% over the Doller during yesterday’s trading; however, the precious metal is finding a lack of momentum in its recovery from last week’s steep selloff. An increasing optimistic outlook for U.S. equities is not helping Gold’s recovery to last week’s highs.

Technical Analysis:

EURUSD (Daily Chart)

The EUR/USD pair continued to rise on Tuesday, extending its rebound from a yearly low pinned on Friday. The pair started its upside movements during the Asian session, further boosted and hit a daily high near 1.128 level in mid-European session. The pair was last seen trading at 1.1262, posting a 0.28% gain since the beginning of the day. The demand of the shared currency remains robust in the second trading day of the week amid broader dollar weakness, as optimism on big tech’s financial results helped boost the stock market sentiments, which is in favor of the risk-sensitive EUR. However, the dovish ECB monetary policies is still weighing on the Euro pair, we should look carefully on both EU and US central banks’ announcement to see if the rate discrepancies between their currencies will stretch further.

For technical aspect, the RSI for the pair reads 44.92 as of writing, and the price actions remain below all the major moving averages, suggesting bear movement ahead. To the upside, if the pair could close above its 20 and 50 DMAs, then it is expected to knock on its next resistance 1.1400. On the contrary, if the pair fails to cling on the 1.1200 threshold, then a sharp decline to its yearly low is anticipated.

Resistance: 1.1200, 1.1400, 1.1620

Support: 1.1000, 1.0780

GBPUSD (Daily Chart)

After ending January with losses of 0.66%, the British pound snaps the losing streak, climbing for 3 days and gaining over 1%. At the time of writing, the GBP/USD is trading at 1.3514, approaching the 20 DMA lying at 1.3558. As the January ISM Manufacturing figures turn out green, the US equity opens low but soon jumped back to positive an hour after, which is in favor of the risk-sensitive GBP. Unlike the ECB, Bank of England is more hawkish when it comes to the monetary decisions, thus the investors are more faithful to the British pound than to the Euro.

On the technical front, the RSI for Cable reads 51.23 as of writing, as the bulls and bears are playing tug of war at this crucial 1.3500 psychological resistance/support. The pair now trades above its 50 DMA, but still down around 40 pips to the 20-day one. To the north, Cable is going to face the heavy 1.3600 resistance, followed by the long-tern downtrend, and then the 200 DMA currently at 1.3717; in cases to the south, the pair is underpinned by the year-to-date lows around 1.3400, followed by the December lows around 1.3200.

Resistance: 1.3600, 1.3717, 1.3830

Support: 1.3400, 1.3200

XAUUSD (Daily Chart)

Gold peaked on European hours at $1,809 and then lost strength. It pulled back following the release of US economic data to $1,797 and then rose back above $1,800. XAU/USD is moving sideways on American hours, capped by $1,810 while holding above $1,800. The greenback recovers some strength amid rising US bond yields that rebounded from weekly lows. The dollar index (DXY) is falling for the second day in a row and it stands around 96.42, down 0.23% off lows. The combination of a rebound in yields and also in the DXY weakened XAU/USD that is still in positive ground for the day.

As to technical, Gold’s price recovery found short-term resistance at $1,810 and pulled back. If XAU/USD fails to break the $1,810 area, the upside would remain limited and a break higher could clear the way for a rally initially to the 20 DMA at $1817; above the next key resistance lies in the $1,830 area. On the flip side, a slide back under $1800 would increase the bearish pressure. A daily close under $1790 is needed to suggest more losses ahead. Key support levels are seen at $1765.

Resistance: 1817, 1830, 1860

Support: 1800, 1765, 1720

Economic Data:

Market Focus

U.S. equity markets rallied on the last trading day of January to close out one of the worst month of trading since March of 2020. The Dow Jones industrial average rose 1.17% to close at 35131.86, the S&P 500 gained 1.89% to close at 4515.55, and the Nasdaq composite leaped 3.41% to close at 14239.88. Gains were led by technology sector giants such as Tesla, Spotify, and Netflix, who saw share prices retreat significantly as the Fed continues inch towards rate hiking. The benchmark U.S. 10 year treasury yield slid to 1.784%, while the 30 year yield also fell slightly to 2.116%.

Tension between Ukraine and Russia continue to pose a threat over energy prices for the European zone, as major countries such as Germany, rely on Russia’s supply of oil and natural gas. Moscow has denied plans to invade Ukraine, however around 100,000 Russian troops have already gathered around the Ukrainian border.

Main Pairs Movement:

The DXY remained fairly unchanged over the course of yesterday’s trading and is at 96.648, as of writing. The Greenback lost some ground as treasury yields cooled off since reaching its peak last week.

The Euro traded lower against the Dollar over the course of yesterday’s trading. Eurozone GDP topped estimates, this helped the currency rally against the Dollar; furthermore, a continued accommodative ECB adds to the recent bullish outlook for the Euro.

The Sterling gained over the Greenback as the Dollar weakened across the board. Risk on sentiment could be attributed for the recent rally as global equities rebound from a turbulent trading week.

The Canadian Loonie lost 0.48% against the Greenback over the course of yesterday’s trading. The important Canadian Raw Materials Price Index saw a 2.9% drop, month over month.

Technical Analysis:

EURUSD (4- Hour Chart)

The EUR/USD pair advanced on Monday, extending its rebound from a yearly low that touched last week. The pair was trading higher during Asian session, preserving its bullish momentum and reached a daily high near 1.118 level in early European session. The pair was last seen trading at 1.1159, posting a 0.10% gain on a daily basis. EUR/USD stays in the positive territory amid weaker US dollar across the board, as the upbeat sentiment and reducing demand for safe havens dragged the US dollar index from the highest level since July 2020. In Europe, the Eurozone Prelim GDP met estimates with 0.3% QoQ in Q4 2021. On top of that, the dovish ECB might keep acting as a headwind for the shared currency.

For technical aspect, RSI indicator 36 figures as of writing, suggesting bear movement ahead. But looking at the Bollinger Bands, the price rose towards the moving average after touching the lower band, which indicates that the pair could remain its upside traction. In conclusion, we think market will be bullish as the pair is heading to test the 1.1186 resistance. A sustained strength beyond that level could trigger a short-term bounce and lift the pair back towards the 1.1300 area.

Resistance: 1.1186, 1.1300, 1.1369

Support: 1.1121

GBPUSD (4- Hour Chart)

The pair GBP/USD advanced on Monday, recovering further from a one-month low below 1.337 level. The pair saw heavy selling and dropped to a daily low during European session, but then bounced back to 1.344 area heading into the America session. At the time of writing, the cable stays in positive territory with a 0.43% gain for the day, recovering most of its intraday’s losses. The bearish momentum witnessed in the US dollar is mainly due to risk-on market sentiment, as risk-sensitive currencies like GBP outperformed the safe-haven greenback. On top of that, expectations that the Bank of England will hike interest rates at Thursday’s meeting also underpinned British pound and acted as a tailwind for the GBP/USD pair.

For technical aspect, RSI indicator 51 figures as of writing, suggesting that buyers remain in control of the pair’s action in the near term. For the MACD indicator, a positive histogram shows that the pair might keep the upside traction. As for the Bollinger Bands, the price crossed above the moving average, therefore the upside momentum should persist. In conclusion, we think market will be bullish as long as the 1.3358 support line holds. A breach of the 1.3525 resistance would open the door for higher prices.

Resistance: 1.3525, 1.3633, 1.3739

Support: 1.3358, 1.3174

USDCAD (4- Hour Chart)

After last week’s rally to a three-week high near 1.280 level, the pair USD/CAD failed to preserve its upside traction and edged lower on Monday. The pair was surrounded by bearish momentum during Asian session, but then rebounded back above 1.277 area to recover some intraday’s losses. USD/CAD now continues to suffer losses amid renewed US dollar weakness, currently losing 0.36% on a daily basis. The falling US dollar has now sent the USD/CAD pair to a daily low, but BoC’s decision to leave the benchmark interest rate unchanged last week might undermined the Canadian dollar and limit the losses for the USD/CAD pair. On top of that, the rebound in crude oil prices has lent support to the commodity-linked loonie and dragged the pair lower, as WTI oil climbing 0.15% for the day.

For technical aspect, RSI indicator 55 figures as of writing, suggesting that the upside appears more favored as the RSI still above the midline. But looking at the MACD indicator, a negative histogram indicated downward trend for the pair. As for the Bollinger Bands, the price is dropping from the upper band to moving average, therefore the downside traction could persist. In conclusion, we think market will be bearish as the pair is eyeing a test of the 1.2698 support.

Resistance: 1.2814, 1.2964

Support: 1.2698, 1.2570, 1.2461

Economic Data:

Market Focus

Wall Street indexes surged on Friday, posting its best day of 2022 so far after another twisty session, ending a tumultuous week marked by mixed corporate earnings, geopolitical turmoil and an increasingly aggressive Federal Reserve. The S&P 500 posted a weekly victory on Friday, as an Apple-led recovery in tech sectors helped the broader market recover losses earlier this week when the Federal Reserve signaled a faster pace of interest rate hikes. At the end of the market, the Dow Jones Industrial Average rose 1.65 % to 34,725.47 points, the S&P 500 index gained 2.43% to 4,431.85 and the Nasdaq Composite Index added 3.13% to 13,770.57 points

Of the 11 major sectors in the S&P 500, only the energy sector closed in the red. The technology sector was the biggest gainer, up 4.3%, the sector’s biggest one-day gain since April 6, 2020, followed by real estate and consumer services, up 3.38% and 2.92%, respectively. In the tech sector, Apple rose 7% after it reported quarterly results that beat analysts’ expectations for better-than-expected iPhone sales despite being weighed down by supply chain issues. In addition, the tech giant said it expects supply chain issues to improve, boosting confidence in broader tech stocks. Facebook, Alphabet, Amazon and Microsoft all closed up more than 1%, up 2.40%, 3.23%, 3.11% and 2.81%, respectively.  In the consumer sector, Visa surged more than 10% on the day as its fiscal first-quarter earnings and revenue topped Wall Street expectations as strong cross-border payments volumes drove growth.

Main Pairs Movement:

The U.S. dollar extended a Fed-fueled rally on Thursday, with the U.S. dollar index hitting its highest level since July 2020 before entering a consolidation phase on Friday. At the close, the dollar index fell slightly by 0.01% to 97.217, hitting an intraday high of 97.441. Meanwhile, the ongoing conflict between Russia and Ukraine continued to weigh on sentiment.

EUR/USD fell more than 100 pips on Thursday, hitting 1.1132, its lowest level since June 2020. On Friday, the pair took a breather as the greenback entered a consolidation zone but needed to find some support near 1.1150. GBP/USD has a similar situation, falling for almost 10 consecutive days, with a cumulative loss of 2.84% in the past two weeks, and finally found support around 1.33750.

Gold fell more than 1% for the second day in a row on Thursday, dipping below several key support levels. At Friday’s close, XAU/USD traded below 1,800 at 1791.95.

Bitcoin continued to trade in a tight range below $40,000 ahead of the weekend. Ethereum is trading near $2,500, making it difficult to make a decisive move in either direction, but at least some support area appears to have been built.

Technical Analysis:

GBPUSD (Daily Chart)

Following the latest dismal US data that contained promising signs of easing US wage pressures last quarter, the dollar got weakened which has once helped to push GBP/USD back above the 1.3400 level. However, the greenback regained demand just hours later the dump, forcing the pair to retreat from daily highs in the 1.3420s. The pair now trades at 1.3380, in line with its daily open price. Investors are all eye on BoE’s rate decision on February

On the technical front, the GBP/USD pair remains under selling pressure, with the RSI hovers at the familiar 30s territory, as well as the long-term downtrend and the benchmark DMAs capping cable from the upside. The disappointing technical indicators suggest that the Pound might resumed its downward walks in the near term. To the downside, the next support for the pair lies around 1.3200, followed by 1.2800, a price last since at October 2020.

Resistance:  1.3400, 1.3600, 1.3830

Support: 1.3200, 1.2800

EURUSD (Daily Chart)

After holding above 1.1200 for too many days before USD bulls launched an attack to knock down EUD, the shared currency barely advances in the day, lingering around the 2021 yearly lows’ territroy. In the European trading hours, the pair dipped to 1.1122, jumping towards the daily high at 1.1173, attributed to USD month-end flows or some technical moves, as the US Core PCE came at 4.9%, further emphasizing the need for higher rates in the U.S. At the time of writing, the Euro pair is pricing at 1.1144, traded sidelined during the North American session.

As to technical, the price actions of the pair remains under all its major moving averages, while the RSI indicator hovers near the oversold levels. To the downside, the next support level for the pair will appear at around 1.1000, followed by 1.0780; on the flip side, if the pair regained 1.1200, the next resistance lies at 1.1400, followed by the November highs around 1.1620.

Resistance: 1.2000, 1.4000, 1.6200

Support: 1.1000, 1.0780

XAUUSD (Daily Chart)

Gold extended its fall since Wednesday when the FOMC issued the first monetary policy statement of 2022. During the New York session at the time of writing, XAU/USD is trading at $1,788 a troy ounce, down 0.53% from its open price. The market sentiment has improved since the US cash equity markets opened. Nevertheless, European equity indices have been unable to get back in the green. Before Wall Street opened, the US Bureau of Economic Analysis unveiled the Federal Reserve favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) for December, increased by 4.9%, higher than the 4.8% foresee by analysts and 0.2% higher than the November reading.

From the technical perspective, Gold primarily follows the long-term downward sloping trend, despite some upside tractions in between. The pair now trades below all its major DMAs, with a bearish RSI indicating the lack of demand of the yellow metal. To the downside, we expected some supports appear at the $1,765 price level, followed by $1,720, which is a strong support level since the second half 2021; on the contrary, a breach over $1,800 may attract the robust buyers to push the pair further north.

Resistance: 1800, 1830, 1860

Support: 1765, 1720

Economic Data:

Market Focus

Wall Street faced another choppy day on Thursday, with all

three major indexes closing lower, battered by uncertainty in recent days, with more fluctuations and heightened volatility. The S&P 500 pared intraday gains and ended lower as investors appeared to be bracing for a faster pace of interest rate hikes by the Federal Reserve, sending Tesla shares tumbling and a slump in chip stocks led by Intel dragging the broader market. In addition, against this hawkish backdrop, positive economic news, mixed corporate earnings and geopolitical turmoil also weighed on investors. At the end of the market, the Dow Jones Industrial Average fell 0.02 % to 34,160.78 points, the S&P 500 index lost 0.54% to 4,326.51 and the Nasdaq Composite Index dropped 1.4% to 13,352.78 points

Five of the 11 sectors in the S&P 500 ended lower, with the consumer discretionary sector down the most, dropped 2.27%, followed by the real estate sector, down 1.75%. The biggest winner was the energy sector, up 1.24%. A number of companies reported earnings this week, Tesla reported better-than-expected quarterly results but warned that supply chain issues could affect production this year, sending its shares down more than 11%. Meanwhile, Intel closed down more than 7% as better-than-expected quarterly results were overshadowed by concerns that higher investment costs would weigh on growth. On the other hand, Apple rose more than 2% in post-market after the iPhone maker beat earnings estimates and Netflix jumped 7.5% on the news that billionaire investor William Ackman was adding a new $1 billion stake in the company.

Main Pairs Movement:

Markets were all focused on the dollar and the Fed after the Fed all but confirmed a rate hike in March, fueling speculation of at least four rate hikes this year. The dollar was further supported by upbeat growth data, with GDP rising 6.9% in the fourth quarter, much better than the 5.5% expected. Meanwhile, initial jobless claims for the week hit 260K, in line with expectations. At the end, the U.S. dollar index rose 0.75% to 97.204, a fresh year-to-date high and close to the July 2021 high.

The greenback extends post-Fed rally to multi-month highs, the pound and euro continued to weaken and head further south, down 0.57% and 0.85%, respectively. AUD/USD hit a one-week low of 0.7030, while USD/CAD moved further north to 1.2730 and USD/JPY settled at 115.368.

Gold was the worst performer, down another 1.22% and closed at 1,797.48 per ounce. Crude oil continued to move north and rose to new multi-year highs, with WTI closing at $86.80 a barrel and Brent at $89.88 a barrel.

Technical Analysis:

GBPUSD (Daily Chart)

GBP/USD fell to one-month lows on Thursday underneath the 1.3400 level after slumping below resistance in the 1.3450 area earlier in the session, weighed by a buoyant dollar in wake of Wednesday’s hawkish Fed meeting and strong US GDP data. The pair is now consolidating in the 1.3380 area, lowered by about 0.6% on the day. Those losses, though extensive, are modest compared to many of sterling’s G10 peers, as investors expect the BoE to lift interest rates by 25bps to 0.25% next Thursday following strong labour market and inflation data for December.

On the technical front, the GBP/USD pair is downward biased, with the RSI sliding further to 37.23 during today’s slump, and the long-term downtrend weighing on the pair’s traction. The price actions dropped below all its major moving averages, suggesting that the Pound might keep capping by the dollar’s strength in the near term. To the downside, the next support for the pair lies around 1.3200, followed by 1.2800, a price last since at October 2020.

Resistance:  1.3400, 1.3600, 1.3830

Support: 1.3200, 1.2800

EURUSD (Daily Chart)

The EUR/USD pair fell on Thursday to 1.1130, a level that was last seen in May 2020. The dollar appreciated through all sessions, surging in Asia on the back of a hawkish US Federal Reserve and hints for a rate hike in March coming from chief Jerome Powell himself. The greenback gained additional momentum after the US reported its annualized quarterly growth, as the Gross Domestic Product surpassed expectations in Q4 2021 by printing 6.9%. Looking forward, Germany will release the preliminary estimate of its Q4 GDP, while the EU will publish the January Economic Sentiment Indicator on Friday.

As to technical, the pair has collapsed below all of its moving averages, while the Momentum indicator heads south almost vertically, approaching oversold levels. The RSI indicator, in the meantime, maintains its bearish slope at around 32.65. To the downside, the next support level for the pair will appear at around 1.1000, followed by 1.0780.

Resistance: 1.2000, 1.4000, 1.6200

Support: 1.1000, 1.0780

XAUUSD (Daily Chart)

After pulling back sharply on Wednesday from the $1850 highs to a sub-$1820 close amid hawkish post-Fed meeting vibes, gold price have continued to decline, with pretty much the same harsh pace on Thursday. XAU/USD is currently trading close to the $1,797 a troy ounce, down a further 1.25% and now down about 2.86% from Tuesday’s highs above $1850. Gold was pressured by the DXY broking out to fresh 19-month highs above the 97.00 level, and as major US yields broke out to fresh cycle highs, markets moved to price in more aggressive Fed hikes.

From the technical perspective, gold pared all of its gains this week and even dived further below the key $1,800 threshold. The pair penetrated all its major moving averages, and the RSI indicator retreated back to the average line during Thursday’s trades. Moreover, the long-term downward trendline leaves the yellow metal under downside risk. To the upside, the previous support $1,830 would be a fresh resistance for the yellow metal, followed by $1,860; on the flip side, gold’s first support is at $1,800. A breach of the latter would expose the next support at around $1,765, where the November lows sit.

Resistance: 1830, 1860, 1900

Support: 1800, 1765

Economic Data:

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Market Focus

Three major stock indexes weakened on Wednesday after U.S. bond yields soared and tech stocks retreated after Federal Reserve Chairman Jerome Powell signaled there was enough room to raise interest rates. The Fed said in a statement that it may be appropriate to raise interest rates “soon” and confirmed plans to end its bond-buying program in early March after the remarks. At the end of the market, the Dow Jones Industrial Average fell 0.38% to 34,168.09 points, the S&P 500 index lost 0.15% to 4,349.93 and the Nasdaq Composite Index added 0.02% to 13,542.12 points

Of the 11 sectors of the S&P 500, 9 ended lower, with the real estate sector falling the most, down 1.66%. The biggest winner was information technology sector, which rose 0.72%, followed by the financial sector, which rose 0.27%. Fourth-quarter earnings season is in full swing, with one in five S&P 500 companies reporting results. According to Refinitiv data, 81% of them beat expectations. Microsoft rose 2.8% after beating consensus, driven in part by its cloud business. On the other hand, Boeing fell 3% after the planemaker reported a wider-than-expected fourth-quarter loss and lower-than-expected revenue, as delayed deliveries of its 787 Dreamliner program hurt performance. On Thursday, several companies will report earnings, such as Apple, Chevron, Danaher… .

Main Pairs Movement:

The U.S. dollar closed higher across the board on Wednesday and beat all rivals in the wake of the Federal Reserve’s monetary policy decision. As widely expected, interest rates and tapering remain unchanged, but Fed Chairman Jerome Powell boosted hawkish sentiment after suggesting there was plenty of room for rate hikes. In the end, the U.S. dollar index rose 0.54% and the U.S. 10-year Treasury yield rose 0.32%

As the dollar strengthened, the pound and euro continued to weaken and head south, down 0.31% and 0.52%, respectively. AUD/USD is near a weekly low of 0.7089, while USD/CAD traded near 1.2670, and USD/JPY closed at 114.64.

Gold was the worst performer, down around $30.00 and settled at $1,816 per ounce. Crude oil kept moving north, with WTI retreating from daily highs of $87.92 to around $86.50 per barrel.

Technical Analysis:

GBPUSD (Daily Chart)

Cable traded sidelined on Wednesday ahead of the Fed monetary policy statement release. At the time of writing, the pair is settling at 1.3522. Overall risk sentiment is upbeat, as portrayed by European stock indices closed in the green, and US benchmarks opened higher earlier the day. However, despite market’s optimism, investors should be aware of geopolitical and central bank news crossing the wires, as we are now getting deeper into the Central Bank week, and the Ukraine – Russia conflict looms.

On the technical front, the GBP/USD pair is downward biased, with the RSI unable to regain 50 during today’s rally, and the long-term downtrend still tripping the pair’s steps to the upside. However, the fact that price action broke above the 50-DMA, which lies at 1.3423, suggests that the Pound might be subject to fresh demands in the near term. Nevertheless, unless the GBP/USD breaks firmly above the downtrend with a positive RSI figure, then that would open the door for further gains.

Resistance:  1..3600, 1.3830, 1.3900

Support: 1.3400, 1.3200

EURUSD (Daily Chart)

The Euro pair hovered around the familiar levels at the first half of the trading day and slid over 30 pips as the time passed into the European session. The pair now trades at 1.1294, 20 pips recovered from today’s dip owing to the optimistic sentiments during the New York trading session ahead of the Fed’s meeting. In the meantime, the Dollar Index advances some 0.12%, clings to 96.06, as the Fed looms. Furthermore, the US 10-year Treasury yield is flat, around 1.77%.

As to technical, the Euro pair is downward biased, with the RSI reads 43.94. The 50 DMA along with the 23.6% Fibonacci at around 1.1310 is the first resistance level and would be under pressure when the Fed releases its monetary policy statement. If that level is breached, the next resistance would be resistance at 1.1380, where the 38.2% Fibonacci sits. On the flip side, the pair is expected to get underpinned slightly around the 1.1230 area, followed by 2021 yearly low at around 1.1200.

Resistance: 1.1310, 1.1440, 1.1500

Support: 1.1230, 1.1200

XAUUSD (Daily Chart)

Gold is moving towards the close and down some 1.65% after falling from a $1,850.11 high to test a low of $1,814.98. The drop came on the back of a hawkish twist at the Federal Reserve event on Wednesday. Initially, the FOMC Statement offered little in the way of surprising truths with regards to the Fed’s path of the balance sheet runoff and rate increases and markets responded in kind with little enthusiasm. However, volatility kicked in just ahead of the Fed’s chair presser. Jerome Powell surprised markets with a hawkish pivot, commenting that the Fed could raise rates at every meeting if need be. Additionally, Powell said in the presser that the Fed could move faster and sooner than they did the last time which helped the US dollar to extend on pre presser gains

From the technical perspective, gold pared all of its gains this week and even dived further below the key $1,830 threshold. The pair’s outlook turned sour, as the price actions fell below the short term 20-DMA, and the RSI indicator retreated back to the average line. Moreover, the long-term downward trendline leaves the yellow metal under downside risk. To the upside, the previous support $1,830 would be a fresh resistance for the yellow metal, followed by $1,860; on the flip side, gold’s first support is at $1,800. A breach of the latter would expose the next support at around $1,765, where the November lows sit.

Resistance: 1830, 1860, 1900

Support: 1800, 1765

Economic Data:

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Market Focus

U.S. equity markets continue to be turbulent ahead of FOMC’s press conference scheduled on the 27^th. The Dow Jones industrial average lost 0.19% to close at 34,297.73, the S&P 500 slid 1.22% to close at 4,356.45 and the Nasdaq composite slumped 2.28% to close at 13,539.29. All three major equity indices experienced a sharp sell of to start the session, but saw quick recovery mid-session and then were faced with another correction towards the close. The benchmark U.S. 10 year treasury yield slid slightly to 1.778%, while the 30 year treasury yield sits at 2.124%.

Microsoft released better than expected earnings after the bell. Microsoft’s revenue increased by 20% year over year in the quarter, and net income surged by 21% to $18.77 billion. Despite better than expected operating result, shares of Microsoft traded lower during the session but is positive after earnings release.

Johnson & Johnson reported 4^th quarter sales of $24.8 billion and 2021 full fiscal year sales of $93.8 billion, a growth of 13.6% growth year over year.

Tesla is due to release earnings on the 26^th.

Main Pairs Movement:

The Dollar index gained 0.1% over the course of yesterday’s trading and the index has recovered all the lost ground since January 11^th. Dollar strength could be the reflect of market participant’s anticipation ahead of the FOMC’s press conference.

Cable gained a modest 0.05% during yesterday’s trading. A second straight session of gains for the Sterling. If the 1.348 support level continues to hold, Cable could finally break out of its yearlong downward trend.

The Euro continues to trade lower against the dollar. The EURUSD pair lost 0.21% over the course of yesterday’s trading and saw an intraday low of 1.126, but the pair was able to recover once the U.S. session began.

Gold continues its rise as global inflation sentiment remains high. The FOMC’s rate decision could bring tremendous price action to the previous metal. $1867 presents itself as the nearest resistance level for XAUUSD.

Technical Analysis:

GBPUSD (Daily Chart)

Seesawing around 1.3500, GBP/USD is flat but turning green on the day following a recovery from the lows of 1.3436 and retesting the previous downtrend resistance. The US dollar has fallen under pressure as the 10-year yields remain capped by dismal market mood. Meanwhile, the markets are in high anticipation of the Federal Reserve interest rate decision and accompanying statement. The fundamental outlook for the UK remains unclear.

On the technical front, earlier in the US session, 1.3500 was noted as an anchor point from which bulls would be expected to struggle to pull away from. However, a key level of resistance was penetrated and a higher high for the day was scored all of the way towards 1.3520. At the very end of today’s trading, cable dropped back to near 1.3500 level as the downside pressure enhanced, leaving the day flat.

Resistance: 1..3600, 1.3830, 1.3900

Support: 1.3400, 1.3200

EURUSD (Daily Chart)

During the first half of the North American session, the EUR/USD pair fell from 1.1325 towards the figure, giving way for USD bulls, who secured a 40-pip move to the daily low of the day at 1.1263. Then, as the New York session progressed later on, EUR bulls entered the market, reclaiming the 1.1300 figure. The slump today attributed to a risk-off market mood that has spurred demand for safe-haven assets. Factors like the Ukraine – Russia crisis and the Fed’s first monetary policy meeting of the year maintain market participants uneasy, as portrayed by US equities trading in the red. At the time of writing, the shared currency is trading at 1.1300.

As to technical, the Euro pair is neutral-downward biased. The 50 DMA moves close to the spot price, leading the way for the longer time-frame ones, with the 100-DMA and the 200-DMA lying at 1.1469 and 1.1708 each. Nevertheless, the bias is downward as long as the exchange rate remains below the former. On the downside, the first support of the pair would appear at the 23.6% Fibonacci, which is around 1.1300, then we have the 2-year lows around 1.1200, which is the last barricade before the pair drops further.

Resistance: 1.1380, 1.1440,1.1500

Support: 1.1300, 1.1200

XAUUSD (Daily Chart)

Gold bounced off the $1,850 per troy ounce psychological resistance but fell to the previous price levels afterward. The upside traction of the yellow metal on Tuesday may due to investor’s escalating concerns about the Wednesday’s Fed talks and the crucial Q421 and yearly report of Apple Inc., the world’s largest company by market cap. The pair now trades at $1,846, up 0.2% intraday and the momentum remains strong amid the widespread risk-off sentiments.

From the technical perspective, gold now hovers around the psychological block $1,850. The pair is upside biased, with the major DMAs below the spot price, and a RSI reads showing yet another breach over $1,850 is highly likely to occur later the day. However, the long-lasting downward slope leaves the yellow metal under downside risk. As yesterday mentioned, gold’s first resistance would be at the $1,860s, and then its last summer’s highs at around $1,900; on the other hand, gold’s first support is at $1,830. A breach of the latter would expose the next support at $1,800, followed by the November lows around $1,765.

Resistance: 1860, 1900

Support: 1830, 1800, 1765

Economic Data:

Market Focus

U.S. equity markets experienced a turbulent trading session, all three major equity indices dropped at the bell but all were able to amount an incredible comeback. The Dow Jones industrial average clawed back 0.29% to close at 34,364.5, the S&P 500 gained 0.28% to close at 4,410.13, and the Nasdaq composite gained 0.63% to close at 13,855.13. The Dow Jones industrial average clawed back more than 1000 points after being down 1,115 points mid session. The benchmark U.S. 10 year treasury yield edged higher to 1.774% and the 30 year treasury yield also moved higher to 2.114%.

Earnings season continue as Microsoft Corporation, Johnson & Johnson, and Verizon Communications Inc. are all due to report their 4^th quarter earnings after market close of the 25^th. Mixed earnings have been reported so far. The financial sector has already report some missed earnings targets, but market participants will continue to monitor earnings from the technology sector, which would be the most impacted sector by an interest rate hike. The FOMC will meet on Wednesday, followed by a press conference where chairman Jerome Powell will provide guidance on the monetary policies ahead.

Main Pairs Movement:

The Dollar Index rallied over the course of yesterday’s trading, but the index pulled back as market participants rotated into equities that fueled the equity markets’ impressive comeback.

Natural gas remained depressed as global demand for the commodity wains. Interest in this commodity remains weak as open interest continues to falter.

The Euro-Dollar pair traded lower amid Dollar strength. EURUSD traded below 1.3 as the American session began but was able to repair loses as market participants saw an opportunity to enter.

Gold ended its two-day losing streak as market participants boost the precious metal above the key resistance level at 1,840.

Technical Analysis:

Natural Gas (Daily Chart)

Open interest in natural gas futures markets shrank for the third consecutive session on Friday, this time by around 2.3K contracts, according to advanced prints from CME Group. Volume reversed two daily builds in a row and went down by around 145.5K contracts.

Friday’s decent gains in prices of natural gas was supported by short covering, as noted by declining open interest and volume. Against this, further gains appear not favoured in the very near term, with the RSI dropped below the average line. The door still open to a visit to the $3.550 region per MMBtu, or December lows.

Resistance: 4.100, 4.800, 5.500

Support: 3.800, 3.550

EURUSD (Daily Chart)

EUR/USD held up well on Monday despite the market’s deeply risk-off tone, with the pair finding good dip-buying interest when it hit the 1.1300 level earlier in the session and recovering to trade flat on the day in the 1.1320s. As has been the case for the past four sessions, the price action continues, for the most part, to stick between the 20 and 50-day moving averages at 1.1350 and 1.1315 respectively.

As to technical, the shared currency’s price action remains around the 23.6% to 38.2% Fibonacci consolidation range. The RSI indicator reads 47.64, showing slightly bearish tone. As mentioned last Friday, if the pair manages to rise back above 38.2% Fibonacci, then the outlook would improve. On the downside, a solid break under 23.6% Fibonacci should clear the way to more losses and to a test of the bottom of the retracement lines.

Resistance: 1.1380, 1.1440,1.1500

Support: 1.1300, 1.1200

XAUUSD (Daily Chart)

Gold is headed for a positive close on Monday following a heavily risk-off session and a run for safer havens. At the time of writing, gold is up 0.3% after climbing from a low of $1,829.76 and settling around the $1,840 price levels, so far with eyes on the psychological $1,850 level.

From the technical perspective, Gold has achieved to stay above the critical $1,830 price level in the last three trading days. XAU/USD is neutral-upward biased, as portrayed by the major DMAs below the spot price, but its horizontal slope leaves the yellow metal under downward pressure. To the upside, gold’s first resistance would be the robust $1,860, and for cases that breaches the long-lasting downtrend, the pair could reach its last summer’s highs at around $1,900; On the flip side, gold’s first support is at $1,830. A breach of the latter would expose the next support at $1,800, followed by the November lows around $1,765.

Resistance: 1860, 1900

Support: 1830, 1800, 1765

Economic Data: