It’s the last day of the trading week and also the last day of the first month of 2020 and it’s been volatile to say the least. Also, this evening at 11pm London time the United Kingdom will legally leave the European Union.
The confirmed cases of the coronavirus have increased by over 2K from yesterday and currently stand around 9,956. The death toll has increased to 213. The World Health Organization met in Geneva yesterday and after thorough discussion have declared the outbreak a global health emergency.
Yesterday late evening, close to midnight GMT, Japan released Tokyo Core CPI YoY for Jan. which was slightly below forecast at 0.7%. Retail Sales YoY for Dec. were released at -2.6% below -1.8% forecast and -2.1% prev. fact. Industrial production MoM for Dec. on the other hand improved and was released at 1.3% above 0.7% forecast and -1.0% prev. fact.
This morning at 10am GMT we had the release on Eurozone inflation and GDP. Core CPI YoY came in below forecast at 1.1% below 1.2% forecast and 1.3% prev. fact. GDP QoQ missed it’s 0.2% target and came in at 0.1%, GDP YoY also slightly missed the 1.1% target and was released at 1.0%.
Later today we have the release on Canada GDP MoM for November at 1:30pm GMT, the forecast is 0.1% from -0.1% previously.
EUR/USD on a Daily TF experiences some mild downside momentum during the Euro release but has since returned back to our resistance target around 1.10300.
Technically: 13 and 48 EMA are pointing down. Bearish MACD histogram is decreasing, Parabolic SAR is pointing down but getting closer to the price.
Resistance: R1 1.10500, R2 1.10798, R3 1.11.
Support: S1 1.10 – 1.09923, S2 1.09670, S3 1.09403.
GBP/USD on a Daily TF is trading higher today, but within the same range the price has been in since the beginning of January. We mentioned yesterday that the Bank of England’s decision to leave the interest rates unchanged was received with optimism and boosted the Sterling followed by weaker than expected data from the United States. We’ll have to pay attention on what kind of tone Brexit transition negotiation are going to begin. Also pay attention to any updates and headlines regarding the United States and United Kingdom Trade agreement.
Technically: The price is trying to break above our local trend line down from December 13th, currently trading around 1.31232. MACD line has intersected the signal line up and we have the beginning of a bullish histogram. The price is above 13 and 48 EMA which are pointing slightly up. Parabolic SAR is touching the top of the latest candle.
Resistance: R1 50% Fibo 1.31675, R2 1.32500, R3 1.33327.
Support: S1 1.30 - 1.29500, S2 38.2% Fibo 1.28821, S3 200EMA 1.28288.
USD/JPY on a Daily TF continues to trade flat. After dropping by approximately -1.15% during the week of Jan.20-27th the price has remained in a flat surrounding 109 during the past 5 trading days. The price did drop during U.S. releases meeting our first support target at 108.729 and dropped even further to 108.583 which is slightly above our next support target, but shortly thereafter came back up to the 23.6% Fibo level and 200EMA.
Over the weekend we have to pay close attention to any updates on the coronavirus, especially with the markets closed for 2 days we may see movement at the opening of the Asian trading session on Monday.
Technically: Bearish MACD histogram is increasing, Parabolic SAR is pointing down and located far away from the price.
Resistance: R1 109.270, R2 109.490, R3 109.650.
Support: S1 108.729, S2 108.600, Fibo 108.250.