Dollar recovered from its strength after the FOMC meeting yesterday, awaiting the results of NFP tomorrow
Asian equities have made some modest gains during the Asian trading session recovering from earlier losses at the beginning of the week. On the other hand, dominating US bond yield and interest rates could put a dent in investors’ optimism toward the global economic outlook.
The US Federal Reserve attracted the attention for interest policy tightening later this year and upgraded its inflation outlook at its policy meeting on Wednesday, the first of many in 2018 and the last to preside by Janet Yellen, who will be replaced by governor Jerome Powell on Feb 3. It kept interest rates on hold as expected.
The Aussie retreated a little then consolidated on the back of mixed economic results from domestic and Chinese economic data.
The Chinese Caixin Purchasing Managers Index survey of private sector Chinese manufacturers for the month of January was released at 51.5, which was similar to popular expectations
As for Australia economic releases satisfied both bulls and bears alike, The building permits approvals for the month of December have decreased by 20% on the month. On the other hand, the manufacturing sectors did a lot better, with the Australian Industry Group’s Jnaury index coming in at 58.7, which is similar to the PMI.
Japan upgraded its January reading for its manufacturing PMI from 54.4 to 54.8, which mark one of its highest reading since February 2014. According to the survey, new business opportunities rose its fastest in 4 years, while overall confidence has been supported by improvement in outputs and labor growth.
The greenback remains in consolidation following the mild support its received from the FOMC statement. The initial build-up of downward pressure prior to the FOMC was thwarted by market participants hedging their bets ahead of Friday’s NFP.
As for commodities, crude futures fell 0.05% to $64.70 a barrel, while Brent eased 0.03% to $68.87 a barrel.
Manufacturing data will be the key focuses today. Eurozone will release its PMI manufacturing revision. In addition, UK will also release PMI manufacturing.
GBPUSD is expected to find support at 1.4135, and a fall through could take it to the next support level of 1.4075. The pair is expected to find its first resistance at 1.4245, and a rise through could take it to the next resistance level of 1.4295.
EURUSD: EUR/USD is still bounded in consolidation from 1.2535 and intraday bias remains neutral.
GBPUSD: GBP/USD’s consolidation from 1.4345 is still in progress.
USDCAD: Intraday bias in USD/CAD remains on the downside for the moment.
USDCHF: USD/CHF is still bounded in range trading above 0.9290 temporary low at this point.
USDJPY: USD/JPY recovers as consolidation from 108.30 temporary low continues
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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.
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