Russell Shor

The volatility for USDJPY increased after the Bank of Japan kept its interest rate targets unchanged. It left its short-term interest rates at -0.1% and the target for its 10-year bond at zero. The BoJ reiterated it will defend the 10-year yield at 0.5%.

The RS has moved from the weak channel (between the lower blue and red bands) into the neutral region between the blue bands (blue arrow). The RSI is on the cusp of turning bullish, I.e. moving above 50 (red arrow).

The averages earning index for the UK (3m/y) came in hotter than expected at 6.4% (6.2% forecast). This is higher than the previous print of 6.1%. Tomorrow sees the annual CPI release, and depending on the number, another 50bps hike on 2 February by the BoE remains a possibility.

CHN.TECH has benefitted from signals that China’s regulatory clampdown of tech is being relaxed and from the loosening of China’s strict Covid-19 regulations.

Join FXCM senior market specialists, Russ and Nik, as they discuss the hot topics for this week.

The UK100 continues to trade in its daily chart’s bullish area between the upper blue and red bands. The hourly chart on the right also shows bullish developments. Its trend-following EMAs have crossed bullishly, as has its momentum based stochastic indicator (black ellipses). If the stochastic makes its way to the 80+ region (blue arrow), and holds, an underlying positive momentum will be present. This will be price supportive.

Between June 2022 and November 2022, copper traded sideways in an accumulation pattern (green rectangle). Then, as the CHN 50 started appreciating, copper moved into a mark-up phase - trading above its 30-week EMA, with the EMA turned up. The RSI has pushed to the bullish side of 50 (blue rectangle). As long as it maintains this position, copper's underlying momentum will be biased to the upside.

Recent price action has the cryptocurrency above its 150-day EMA, and the EMA is turning up. It has spiked above $21,000. It’s possible that the sideways movement since June 2022 has been a large accumulation pattern (green rectangle).

JPM.us is trading in its bullish area between its upper blue and red bands. The red Bollinger bands are expanding away from each other as volatility increases (black ellipses). Its stochastic is trading in its upper quintile (green rectangle), denoting an underlying bullish momentum. Its Q4 EPS beat expectations coming in at $3.57 ($3.07), and revenue was $35.57bn ($34.3bn - estimate).

BAC.us is trading in its bullish area between its upper blue and red bands. Its RSI is trading on the bullish side of 50 (aqua rectangle) and the stochastic is in its bullish quintile (red rectangle). The Bollinger band squeeze (green vertical rectangle) suggests that volatility will expand, and if the indicators maintain, this expansion is likely to be to the upside. For its Q4 earnings, EPS came in at…

Following yesterday's CPI print, showing the slowest inflation in over a year, we consider the US 10-Yr real rate (top chart). December into January, price action resembles a flag (green parallel lines). This is a continuation pattern. The measured move suggests that real rates have a bias to decline.