Home Forex Market Update – January 20 – USD Falls, Stocks Weaker, Japan Inflation at 41-Year High

Market Update – January 20 – USD Falls, Stocks Weaker, Japan Inflation at 41-Year High

by SuperiorInvest

Better data from the US (Unemployment claims & Philly Fed Manu Index) could not raise USD (USDIndex under 102.00) & Wall Street (-0.76% to -0.96%). The US hit its latest debt ceiling ($31.4 trillion), as Republicans seek to curb Biden’s spending. Potential default postponed until June 5. More Hawkish comments from Fed speakers (even key VP Dove Brainard) talk of 5.00%+ terminal rates failed to revive the USD. Bonds collectedUS 10-year yield fell to 3.41%. Asian markets are higher ahead of the Lunar New Year holiday with China’s huge population on the move and all the risks that entails. Inflation in Japan hit a 41-year high 4.0% and PBOC held rates at 3.65%. NETFLIX stocks (-3.23%) gathered +7.12% after hours after the number of subscribers beat and CEO Hastings he got off and moved to the chair.

  • The USD index rallied from a 7.5 month low at 101.25, on Wednesday, held 101.70 yesterday, but continued to break above 102.00 Handle.
  • euros – holds on 1.0825 now, after testing below 1.0800 yesterday, after a new 8-month rise 1.0880 this week.
  • JPY – Reflected from sub 128:00 minima at 127.80 and trades north of 129.00 according to Japanese inflation data. Yen is the weakest of the G7 currencies today.
  • GBP – Sterling was unable to sustain the breach 1.2400, this week, but he’s keeping his bid on 1.2330 today. United Kingdom Consumer confidence and December Retail sales both missed significantly. BOE Governor Bailey has weighed in on a possible rapid decline in UK inflation.
  • Stocks – US markets were weak again yesterday (-0.76% to -0.96%). 500 USD -0.76%, broke the key 3900 support, 50 SMA & test 20 SMA) to close 3898. 500 USD FUTS holds 3900 at 3924.

  • USOil – plunged and posted a low of the week in $78.41 pre-inventories data showed an increase of 8.4 million barrels (compared to an expected draw of 2.4 million barrels) and prices rose $81.50 and it holds $81.00 Now.
  • Honey – hit a 9-month high today $1935 again today and trades at 1930 dollars Now. The specter of CB’s reluctance to talk about pivots and seasonal factors is helping the key commodity.
  • BTC – Continues to hold 20 thousand dollars manage this week and it’s back to testing 21 thousand dollars today.

Today US Existing Home Sales, ECB Speeches Lagarde & Elderson. Earnings – Ericsson (pause) Last day of WEF in Davos.

The biggest FX Mover @ (07:30 GMT) AUDJPY (+0.21%). It rallied from yesterday’s reversal by 400 pips 88.00 trade on 89.35 Now. MAwith aligned above, MACD histogram and signal line positive and rising. RSI 22.87, OS & falling, H1 ATR 0.239, Daily ATR 1.278.

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Stuart Cowell

Chief Market Analyst

Disclaimer: This material is provided as general marketing communication for informational purposes only and does not constitute independent investment research. Nothing in this communication contains or should be considered to contain investment advice or an investment recommendation or a solicitation to buy or sell any financial instrument. All information provided is collected from reputable sources and any information containing an indication of past performance is not a guarantee or a reliable indicator of future performance. Users acknowledge that any investment in leveraged products is characterized by a degree of uncertainty and that any investment of this nature involves a high level of risk for which users are solely responsible and liable. We shall not be liable for any loss arising from any investment made based on the information provided in this communication. This communication may not be reproduced or redistributed without our prior written consent.

Previous articleMarket Update – January 19 – Stocks Fall, USD Rises on Weak Data, JPY Pulls Back

With over 25 years’ experience working for a number of globally recognized organizations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what’s likely and understands how news, charts and sentiment work together to deliver trading opportunities across all asset classes and all time frames.

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