Forex Analysis – January 25, 2023
Our previous Forex analysis can be viewed here…
Technical Analysis
FOREX ANALYSIS: AUDUSD – Market indecision. Possible upside?
As suggested in yesterday’s Forex chart analysis, price has been moving sideways.
AUDUSD is indecisive and is lacking trend direction. The moving averages are currently bullish and widening and price action is at recent highs, so price may attempt a bullish move.
Trading opportunities could exist around the moving averages and around any of the horizontal levels at 0.6925, 0.6940, 0.6985 and 0.7050.
FOREX ANALYSIS: EURGBP – Indecisive. Potential upside?
Price has been bullish, as suggested in yesterday’s analysis.
EURGBP is indecisive but recent price action has been bullish. Price has formed a series of lower swing highs and swing lows and the moving averages have crossed bullish, so the upside could continue.
Trading opportunities may exist around the moving averages, around the trend support area and around any of the horizontal levels at 0.8750, 0.8775, 0.8810, 0.8850, 0.8880 and 0.8895.
FOREX ANALYSIS: EURUSD – Up-trending
As suggested in our last Forex analysis, EURUSD has found support around the longer-term moving average.
Price is up-trending and is currently in a retrace move. The moving averages are bullish and steady, so the uptrend may continue.
Opportunities to go long could exist around the longer-term moving average, around the trend support area and around the horizontal levels at 1.0770 and 1.0760. A bullish move may stall or reverse around the shorter-term moving average and around the horizontal levels at 1.0870 and 1.0915.
FOREX ANALYSIS: GBPUSD – Up-trending. End of the trend?
GBPUSD reversed around the longer-term moving average and trend support area, as suggested in our last analysis.
Price has since been bearish. Price action has formed a head and shoulder pattern and is below the moving averages, suggesting that upside momentum could be weakening – the uptrend could becoming to an end.
Long opportunities may exist around the horizontal levels at 1.2235, 1.2165, 1.2105 and 1.2080. A bullish move could be rejected or reverse around the moving averages and around the horizontal levels at 1.2320, 1.2340, 1.2410 and 1.2430.
FOREX ANALYSIS: USDCAD – Market indecision
As suggested in our previous chart analysis, price has been moving sideways.
The USDCAD continues to be indecisive and lack trend direction. The moving averages are moving sideways and have been crossing frequently, so the market indecision may continue. If price moves below the 1.3335 support, USDCAD may become bearish.
Trading opportunities could exist around any of the identified horizontal levels at 1.3335, 1.3345, 1.3410, 1.3430, 1.3440, 1.3475 and 1.3515.
FOREX ANALYSIS: USDCHF – Indecisive. Potential upside?
Price reversed around 0.9235 and 0.9280, as suggested in our previous analysis.
The USDCHF is indecisive but recent price direction has been bullish. Price action has formed a bullish channel and the moving averages are currently bullish, so the upside direction could continue.
Buying opportunities may exist around the dynamic support of the moving averages, around the bullish channel support area and around the horizontal levels at 0.9235, 0.9230, 0.9165 and 0.9145. A bullish move could find resistance around the bullish channel resistance area and around the horizontal resistance levels at 0.9280, 0.9310, 0.9340 and 0.9400.
FOREX ANALYSIS: USDJPY – Market indecision. Possible upside?
As suggested in yesterday’s Forex analysis, the USDJPY has been bullish.
Price is indecisive but is showing signs of potential upside – the moving averages are bullish and price action has formed a series of higher swing highs and higher swing lows.
Long opportunities could exist around the dynamic support of the moving averages, around the trend support area and around the horizontal levels at 129.00 and 127.95. A bullish move may find resistance around the horizontal resistance levels at 130.70, 131.30 and 132.75.
METAL ANALYSIS: XAUUSD – Up-trending. Potential breakout?
GOLD has been reversing around the diagonal support and resistance areas, as suggested in our previous analysis.
Price is up-trending but is moving within a bullish wedge pattern. The moving averages are bullish and steady, so the uptrend may continue.
Trading opportunities may exist around the support and resistance areas of the wedge and if XAUUSD moves out of the wedge (break-out trade). A break to the downside could find support around any of the horizontal levels at 1916, 1902, 1897, 1885, 1879 and 1870.
Fundamental Analysis
Key Analysis
Today’s Major Scheduled News
0030 UTC – AUD – Inflation Rate
0900 UTC – EUR – German Business Climate
1500 UTC – CAD – Rate Announcement Monetary Policy Report
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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