Market data and Fed pushback lead to uncertain start to the week for greenback
The Fed is in its blackout period prior to the 1 Feb FOMC statement and interest rate hike. This week started with a prevailing uncertain sentiment.
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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The Fed is in its blackout period prior to the 1 Feb FOMC statement and interest rate hike. This week started with a prevailing uncertain sentiment.
The NAS100 daily candlesticks are trading in their bullish channel between the upper blue and red bands. Yesterday’s candle has a lower shadow, connoting buying off the lows.
NFLX results showed subscriber growth came in better than expected at 7.66m. This was almost 70% than its projection of 4.5m. Wall street had a forecast of 4.6m.
GBPUSD is trading in its bullish channel, between the upper blue and red bands, on its daily time frame. The longer it maintains this position, the greater the likelihood of further price appreciation. The hourly chart has also turned positive. Its trend-following EMAs and momentum based stochastic have both crossed up (black ellipses). The stochastic moving into its upper quintile and holding (blue arrow) will connote an underlying momentum. This…
Two series released yesterday came in weaker than expected. This raises the fear that the US is already in recession.
From July 2022, the basket has drifted sideways in an accumulation pattern (green rectangle). It has now crossed above its 30-week EMA and the EMA has turned up. This is bullish. The RSI has moved above 50 (blue rectangle), connoting an underlying bullish momentum. The longer this maintains, the greater the chance of further appreciation ahead.
EURUSD declined yesterday following a Bloomberg report saying that some ECB members were considering a slower pace of tightening. This seems premature at this stage and has been pushed back today at Davos.
The VIX measures expected stock market volatility based on S&P 500 options and is often considered the market’s fear index. As it reaches extremes, contrarian signals may be triggered.
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.
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