Forex-novosti i prognoze od 18-01-2021

FXStreet suggests that the NZD/USD pair is at risk of a short-term correction as the kiwi paused over the past week. However, the broader uptrend remains clearly intact, the Credit Suisse analyst team informs.

“NZD/USD is threatening a small top, which would be confirmed below 0.7153/44, which would suggest a setback early in the quarter towards 0.7006/6999. However, the core uptrend remains clearly intact and we look for an eventual continuation higher post this correction.” 

“An eventual break above 0.7315 would open the door to the 2017 and 2018 highs as well as the 61.8% retracement of the entire 2014/2020 fall at 0.7438/7558, most likely beyond the first quarter.”

FXStreet notes that the euro continues to drop lower and the EUR/USD pair is set to test the 55-day moving average but Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the dip to extend towards the September high of 1.2014.

“EUR/USD remains under pressure near term and is poised to encounter the 55-day ma at 1.2050, we look for losses to extend to 1.2014 the September high and even the 1.1969 2020-2021 uptrend, which will ideally hold. Intraday rallies should struggle around 1.2160.” 

“Assuming that the uptrend (1.1969) and 23.6% retracement of the move up since March 2020 (1.1945) holds; medium-term the market continues to track higher whilst targeting the 1.2556 2018 high and 1.2624, the 200-month moving average, which remains our longer-term target.”

• Japan's economy would grow 4% in real terms, 4.4% in nominal terms in FY2021
• Economy is seen picking up due to stimulus measures to combat virus crisis
• However, downside risks remain over virus resurgence

USD/JPY keeps the mixed outlook unchanged - UOB

FXStreet reports that UOB Group’s FX Strategists notes the outlook for USD/JPY remains mixed for the time being.

24-hour view: “Our expectation for USD to ‘dip below 103.50’ did not materialize as it traded in a quiet manner between 103.60 and 103.91. The price actions offer no fresh clues and USD could continue to trade sideways, likely between 103.50 and 104.00.”

Next 1-3 weeks: “The outlook is mixed and USD could trade between 103.00 and 104.40 for now. Looking forward, the risk for a break of 104.40 first appears to be higher but USD could trade within the range for a while more.”

• We are vaccinating 140 people per minute on average
• Letters are going out to those over 70s today
• Everyone will be offered a vaccine by September

• By early spring, hopefully, by March, we’ll be in position to make those decisions
• I think it’s right to say we won’t do it all in one big bang; as we phase out national lockdown, I think we’ll end up phasing through tiered approach

FXStreet reports that FX Strategists at UOB Group suggests that AUD/USD now shifts the attention to a probable breach of the 0.7640 level in the next weeks.

24-hour view: “The sharp sell-off in AUD last Friday came as a surprise. The rapid drop appears to be running ahead of itself but there is no sign of stabilization just yet. There is scope for the weakness in AUD to extend lower but oversold conditions suggest a sustained decline below 0.7660 is unlikely. Resistance is at 0.7720 followed by 0.7740.”

Next 1-3 weeks: “We did not quite expect the sharp drop to 0.7682 last Friday. While our ‘strong support’ level at 0.7680 is still intact, upward momentum has dissipated. Downward pressure is beginning to build but AUD has to break 0.7640 before a deeper pull-back can be expected. The prospect for a break of 0.7640 is not high for now but would remain intact as long as the ‘strong resistance’ at 0.7765 is not breached.”

Reuters reports that China's Foreign Ministry said that U.S. officials who have engaged in "nasty" behaviour over Chinese-claimed Taiwan will face sanctions after Washington lifted curbs on exchanges between U.S. and Taiwanese officials.

Ties have worsened as China has already condemned this month's easing, announced by U.S. Secretary of State Mike Pompeo in the waning days of President Donald Trump's presidency.

Further adding to China's anger, the U.S. ambassador to the United Nations, Kelly Craft, spoke last week to Taiwan President Tsai Ing-wen, after a planned trip to Taipei was called off.

Asked at a daily news briefing how China would follow through on its pledge to make the United States "pay a heavy price" for its engagements with Taiwan, ministry spokeswoman Hua Chunying said some U.S. officials would face sanctions.

FXStreet reports that Terence Wu, FX Strategist at OCBC Bank, discusses the prospects of EURUSD.

“The sharp breach of the 1.2130/50 zone to the downside leaves the EUR/USD bearish on the technical perspective.Expect the EUR to be under pressure in the immediate horizon, especially as political uncertainty seems to have spread from Italy to the Netherlands. 1.2050 may be the next target, before 1.2000. A bounce clear of 1.2200 may be needed to negate the downtrend.”

During today's Asian trading, the US dollar traded steadily against the euro and rose against the pound.

Weak statistics on the US economy, as well as fears of long discussions of the stimulus plan presented by US President-elect Joe Biden, put pressure on risky assets, experts say.

Biden's proposed package of measures to support the economy includes direct payments to Americans in the amount of $1,400, a temporary increase in payments to the unemployed, as well as raising the minimum wage at the federal level to $15 per hour. Experts believe that Biden will not be able to pass it in this form through Congress.

The focus of traders this week is the speech in the Senate on Tuesday by Janet Yellen, the former chairman of the Federal Reserve System, who was nominated by Biden for the post of Finance Minister of the country.

According to sources, Yellen will make it clear that he adheres to the approach in which the dollar exchange rate should be determined by the market. This will mean that the Ministry's position is non-intervention in the dollar, which often retreated to the current US President Donald Trump has repeatedly stated the need for the adoption of Central Bank measures to weaken the dollar.

The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), rose 0.07%.

The Wall Street Journal reports that Janet Yellen is expected to affirm the U.S.’s commitment to market-determined exchange rates when she testifies on Capitol Hill Tuesday, and she will make clear the U.S. doesn’t seek a weaker dollar for competitive advantage.

The remarks would represent a return to the U.S.’s hands-off approach to the dollar, which President Trump had deviated from by often publicly calling for a lower dollar.

If asked about the new administration’s dollar policy, officials responsible for briefing Ms. Yellen said she is prepared to say, “The value of the U.S. dollar and other currencies should be determined by markets. Markets adjust to reflect variations in economic performance and generally facilitate adjustments in the global economy.”

Ms. Yellen is also expected to say the intentional targeting of exchange rates to gain an unfair advantage in trade is unacceptable.

FXStreet reports that FX Strategists at UOB Group expect EUR/USD to grind lower in the next weeks.

Next 1-3 weeks: “We have held a negative view in EUR since early last week. We noted last Friday that ‘shorter-term momentum is building up again and there is still chance for EUR to edge down towards the solid support at 1.2080’. We added, ‘barring a sudden surge in momentum, the prospect for a sustained decline below this level is not high’. The subsequent strong surge in momentum came as a surprise as EUR cracked 1.2080 and dropped to 1.2072. In view of the vastly improved momentum, further EUR weakness is likely. The next level to focus on is at last September’s peak (resistance-turned-support) near 1.2010. Overall, the current negative phase could remain intact for a while more unless EUR moves above 1.2170 (‘strong resistance’ level was at 1.2220 last Friday).”

RTTNews reports that according to the report from the National Bureau of Statistics, China's economy gained further momentum towards the end of 2020 as the domestic activity continued to recover from the Covid-19 driven downturn.

GDP climbed 6.5 percent on year in the fourth quarter of 2020. The rate exceeded the expected 6.1 percent and up from 4.9 percent growth posted in the third quarter.

On a seasonally adjusted basis, GDP expanded 2.6 percent but slower than the revised 3 percent rise in the preceding three months and the 3.2 percent increase economists had forecast.

In the whole year of 2020, GDP advanced 2.3 percent, making China the only major economy to avoid a contraction amid the Covid-19 pandemic. However, this was the weakest growth since 1970s.

The bureau also said that industrial production jumped 7.3 percent on year in December, beating forecasts for 6.9 percent and up from 7.0 percent in November. In the whole year, output gained 2.8 percent.

Meanwhile, annual growth in retail sales eased to 4.6 percent from 5 percent in November, and missed expectations for 5.5 percent rise.

Fixed asset investment climbed 2.9 percent year to date in December, missing expectations for 3.2 percent. The unemployment rate was 5.2 percent in December.

EUR/USD

Resistance levels (open interest**, contracts)

$1.2199 (243)

$1.2171 (592)

$1.2148 (144)

Price at time of writing this review: $1.2074

Support levels (open interest**, contracts):

$1.2022 (1077)

$1.1995 (2877)

$1.1962 (3260)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date February, 5 is 47865 contracts (according to data from January, 15) with the maximum number of contracts with strike price $1,2000 (3260);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3795 (1361)

$1.3760 (1314)

$1.3701 (1125)

Price at time of writing this review: $1.3567

Support levels (open interest**, contracts):

$1.3484 (777)

$1.3457 (260)

$1.3427 (1688)

Comments:

- Overall open interest on the CALL options with the expiration date February, 5 is 10966 contracts, with the maximum number of contracts with strike price $1,4000 (1724);

- Overall open interest on the PUT options with the expiration date February, 5 is 19419 contracts, with the maximum number of contracts with strike price $1,2500 (2183);

- The ratio of PUT/CALL was 1.77 versus 1.78 from the previous trading day according to data from January, 15

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.