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FxWirePro: Currency Weekly Outlook

Previous Week

 

The Yen, gold continues to trade lower as US-China has signed phase one trade deal on Jan 15th. China has agreed to buy an additional $77 billion and $123 billion in 2020 and 2021 goods and services to meet the total $200 billion. USDCNY is trading weak for the past 5 weeks and hits the lowest level since July 2019.

 

DXY has shown a nice recovery of more than 30 pips from the previous week close of 97.35 The index should break above 97.85 for further bullishness. It is currently trading around 96.81.

 

US CPI rose 0.2% in Dec in line with estimates and core CPI up 2.3% year-year fastest pace since Oct 2018. US retail sales rose for 3rd consecutive months and climbed 0.3% last month in line with an estimate and the previous month was revised to 0.3%. Core retail sales m/m came at 0.7% Vs forecast 0.5%.

  

The precious metal has recovered slightly after hitting a low of $1536. Any break below $1538 confirms further weakness, a dip till $1518/$1500 likely.

 

US 10 year bond yield has halted its 1-week of bearishness and jumped more than 4% form low of 1.776%. The spread between US 10- year and 2 years has narrowed to 25.9 bps from 35.7 bps.

 

Weekly Technical:

 

EURUSD:

Major trend reversal level- 1.12860

Near term support- 1.10600/1.1000

Near term resistance – 1.1180/ 1.1245

 

USDJPY:

 

Major trend reversal level- 110.60

Near term support- 109/108.30

Near term resistance – 110.60/112

 

 

USDCHF

Major trend reversal level- 0.9645

Near term support- 0.9645/0.9540

Near term resistance – 0.9770/0.9845

 

USDCAD

Major trend reversal level- 1.2950

Near term support- 1.3020/1.2950

Near term resistance – 1.3105/1.3180

 

Gold

Major trend reversal level- $1600

Near term support- $1536/$1515

Near term resistance – $1575/$1600

 

 

WTI Crude

Major trend reversal level- $57.40

Near term support- $57.40/$55

Near term resistance – $59.65/$61.50

 

Major Economic events for the week

 

BOJ Monetary policy statement   – Tuesday (Tentative)

 

CAD CPI  - Wednesday (1:30 pm GMT)

 

CAD BOC Monetary policy –Wed (3:00 pm GMT)

 

EUR ECB Monetary policy -Thursday (12:45 pm)

 

EUR German Flash Manufacturing PMI - Friday (8:30 am)

 

Canada Core retail sales m/m- Friday (1:30 pm)

 

 

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