Forex Signals Brief January 22: Central Banks Are Back This Week


Forex Signals Brief January 22: Central Banks Are Back This Week

Skerdian Meta•Monday, January 22, 2024•3 min read

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Last week the divergence between the US consumer and the consumer in other developed countries such as the UK, the EU, and Canada became clear, which helped keep the USD bullish for yet another week in January. In fact, the odds of a March rate cut by the FED have fallen below 50% and now markets are expecting 5 cuts this year, worth around 125-130 pips, which have improved the sentiment for the USD so far this year.

The retail sales report from the US showed another increase in December, beating expectations, while in Canada and the UK, the retail sales reports released last week showed a decline. As a result, the CAD remained weak for the most part of the week, together with other commodity dollars, after a miss in the Chinese GDP and retail sales report early last week.

Nonetheless, the CPI YoY (consumer price index) inflation numbers from Canada showed a slight increase, as did the UK CPI report, which helped keep the GBP well supported against the USD. The Unemployment Claims which fell below 200K showed that the US employment sector remains in decent shape, however, we saw a pullback in the US in the last two days

This Week’s Market Expectations

This week we have three major central banks holding meetings, the Bank of Japan (BoJ), the Bank of Canad (BoC), and the European Central Bank (ECB), but they are not expected to move interest rates. However, traders will be interested to see if they will give any signs of policy change.

People’s Bank of China (PBoC) Loan Prime Rate (LPR)
New Zealand Services Purchasing Managers’ Index (PMI)
Bank of Japan (BoJ) Policy Decision
New Zealand Consumer Price Index (CPI)
Australia Flash Purchasing Managers’ Index (PMI)
Japan Flash Purchasing Managers’ Index (PMI)
Eurozone Flash Purchasing Managers’ Index (PMI)
UK Flash Purchasing Managers’ Index (PMI)
US Flash Purchasing Managers’ Index (PMI)
Bank of Canada (BoC) Policy Decision
European Central Bank (ECB) Policy Decision
US Durable Goods Orders
US Jobless Claims
US Q4 Advance GDP (Gross Domestic Product)
Tokyo Consumer Price Index (CPI)
US Personal Consumption Expenditures (PCE)

Today the economic calendar is light with the WEF Annual Meeting still going on, while the People’s Bank of China is expected to hold rates unchanged. After the MLF decision last week, the PBoC is projected to maintain LPR rates of 3.45% for one year and 4.20% for five-year bonds. Deflationary pressures are active, and the Chinese stock market is in free fall, with the general sentiment being negative.

BTC/USD – Daily Chart 

Ethereum Remains Well Supported by the 20 SMA

Ethereum remains positive overall, but we saw a drop yesterday, with Bitcoin also falling below $43,000. However, the price remains above moving averages, which serve as support, driving lows higher. But last week we had an even bigger retest, sending the price below $2,500; however, buyers returned this week, so they’re likely to reap soon; hence, we’re keeping our ETH signal open.

Ethereum – Daily Chart

ETH Buy Signal
Entry Price: $1,947.38
Stop Loss: $1,490
Take Profit: $2,500

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