Forex Analysis – January 20, 2023
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – End of the trend?
As suggested in our previous Forex analysis, price reversed off the bullish channel resistance area.
AUDUSD was up-trending but has recently been bearish. Price action is below the recent bullish channel support area and the moving averages have crossed bearish, so price may start down-trending.
Trading opportunities could exist around the moving averages, around the previous bullish channel support area and around any of the horizontal levels at 0.6835, 0.6865, 0.6875, 0.6925, 0.6940, 0.6985 and 0.7015.
FOREX ANALYSIS: EURGBP – Market indecision. Potential downtrend?
Price reversed off the shorter-term moving average and has since been bearish, as suggested in our previous analysis.
EURGBP is looking choppy and indecisive but price action has formed a large swing lower, signalling a potential downtrend. The moving averages confirm the potential downside – they are bearish and widening.
Opportunities to go short may exist around the dynamic resistance of the moving averages, around any of the key Fib levels and around the horizontal levels at 0.8775, 0.8795 and 0.8835. A bearish move could stall or reverse around the recent lows at 0.8735.
FOREX ANALYSIS: EURUSD – Ranging
As suggested in our last Forex chart analysis, EURUSD has been moving sideways.
Price is indecisive and is ranging between 1.0770 and 1.0870. The moving averages are tight and moving sideways – confirming the market indecision.
Trading opportunities could exist around the support and resistance areas of the range and if EURUSD moves out of the range (break-out trade). A break to the downside may find support around 1.0760, 1.0710, 1.0680 and 1.0640.
FOREX ANALYSIS: GBPUSD – Up-trending
GBPUSD has found support around the shorter-term moving average, as suggested in our last analysis.
Price is clearly up-trending and is currently in a retrace move. The moving averages are bullish and widening, so the uptrend could continue.
Opportunities to go long may exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.2290, 1.2235, 1.2165 and 1.2105. A bullish move could be rejected or reverse around the recent swing high at 1.2410.
FOREX ANALYSIS: USDCAD – Potential uptrend?
As suggested in our previous USDCAD chart analysis, price moved above the range resistance area, become bullish, and then found resistance around 1.3525.
The USDCAD was indecisive and ranging but recent price action has been bullish. Price is above the recent consolidation area and the moving averages are bullish and widening, so USDCAD may start up-trending.
Long opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 1.3475, 1.3440, 1.3430 and 1.3355. A bullish move may be rejected or reverse around the recent swing high at 1.3515.
FOREX ANALYSIS: USDCHF – Indecisive. Possible downtrend?
Price reversed off the bearish channel resistance area and has since been bearish, as suggested in our previous analysis.
The USDCHF is down-trending and is currently in a retrace move. Price is moving within a bearish channel and the moving averages are bearish and steady, so the downside direction could continue.
Shorting opportunities may exist around the dynamic resistance of the moving averages, around the bearish channel resistance area and around the horizontal levels at 0.9180, 0.9220, 0.9235 and 0.9280. A bearish move could find support around the bearish channel support area and around the recent swing low at 0.9105.
FOREX ANALYSIS: USDJPY – Market indecision?
As suggested in our previous Forex chart analysis, the USDJPY reversed around 131.30.
Price was down-trending but is now looking indecisive. The moving averages confirm the market indecision – they are moving sideways. If USDJPY moves below 127.35, price may start down-trending again.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 127.35, 127.95, 129.00, 129.60, 130.20, 131.30 and 132.75.
METAL ANALYSIS: XAUUSD – Up-trending. Possible indecision?
GOLD reversed off the 50.0% Fib level, as suggested in our previous analysis.
Price is up-trending but is starting to look indecisive, so XAUUSD could start moving sideways. The moving averages confirm the potential indecision – they are moving sideways.
Trading opportunities may exist around the moving averages and around any of the identified horizontal levels at 1861, 1870, 1879, 1885, 1897, 1921 and 1928.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
0700 UTC – GBP – Retail Sales
Interest Rate Analysis
A summary of recent central bank rate changes and statements…
Australia (AUD)
The Reserve Bank of Australia (RBA) has increased rates again by another 0.25%, so rates are now set at 3.10%. The rate increases throughout 2022 have been to tackle rising inflation. The RBA have said that inflation is still too high, so further hikes are expected.
Canada (CAD)
The Bank of Canada (BOC) has hiked the interest rate by another 50bps, increasing the official bank rate to 3.75% – it’s seventh consecutive rate hike. The BOC noted that they will continue with quantitative easing and that economic growth remains strong, although it expects growth to stall for the first half of 2023.
Euro Area (EUR)
The European Central Bank (ECB) has increased it’s rates by 50bps, so the official rate is now at 2.50%. Europe is potentially entering recession. Projected inflation for 2023 is 6.3%.
Japan (JPY)
The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The BOJ does not currently plan to increase rates to tackle high inflation, which has been revised to 2.90% from 2.30%.
Switzerland (CHF)
The Swiss National Bank (SNB) have hiked rates by 50bps, bringing the official rate to 1.0% – it’s third rate hike after more than a decade of negative interest rates. The SNB signalled that rates could move higher, so further rate hikes are expected.
United Kingdom (GBP)
The Bank of England (BOE) have increased it’s official bank rate again. This time by 50 bps, so the official rate is now set to 3.50%. The BOE are expecting recession in the UK and forecast that CPI inflation has now peaked.
United States (USD)
The Federal Reserve has raised the official funds rate by an additional 50bps, so the rate is currently now set at 4.50%. The Fed expect rates to peak at 5.1% in 2023.
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