Forex Today: Markets remain calm to start the week

Here is what you need to know on Monday, January 22:

Major currency pairs trade in familiar ranges early Monday as investors stay on the sidelines ahead of this week's key macroeconomic events. The economic calendar will not offer any high-impact data releases. Germany's Bundesbank will release its monthly report during the European trading hours and the Bank of Japan (BoJ) will announce monetary policy decisions in the Asian session on Tuesday.

The US Dollar (USD) Index fluctuates in a tight channel above 103.00 after gaining nearly 1% in the previous week, while the benchmark 10-year US Treasury bond yield sits above 4%. Meanwhile, US stock index futures trade modestly higher to start the week.

Pressured by the broad-based USD strength, EUR/USD closed in negative territory last week. While speaking at the World Economic Forum (WEF) in Davos on Friday, European Central Bank (ECB) President Lagarde refrained from commenting on the near-term monetary policy outlook but noted that inflation was coming down in the Eurozone and worldwide. Early Monday, the pair holds steady at around 1.0900.

USD/JPY touched its highest level since late November at 148.80 on Friday but erased its gains to end the day flat, slightly above 148.00. The pair moves up and down in a narrow channel near the weekly closing level. Previewing the potential impact of the BoJ event on the pair, "if the BoJ makes it clear that it does not intend to change its expansionary course for the time being – which we believe is likely – USD/JPY could rise a little further," said analysts at Commerzbank.

After posting marginal losses in the previous week, GBP/USD seems to have gone into a consolidation phase at around 1.2700 on Monday. Services and Manufacturing PMIs on Wednesday will be the next important data releases from the UK.

Despite recovering on Thursday and Friday, Gold lost nearly 1% in the previous week. XAU/USD stays on the back foot early Monday and was last seen losing nearly 0.5% on the day at around $2,020.

AUD/USD posted losses for the third consecutive week and spent the Asian session trading in a tight band below 0.6600 on Monday. National Australia Bank will release Business Conditions and Business Confidence data for December on Tuesday.