Trump continues to create mayhem

The USD had maybe the worst week since November 2023 relenting practically any gains made in January. The US President Donald Trump, continued to create mayhem on a fundamental level, as over the past few days having a heated discussion with Denmark’s PM over the US acquiring Greenland, came close to imposing tariffs on Colombia and asked OPEC to lower oil prices, which have been falling anyway. On a monetary level greenback traders are expected to turn their attention towards the release of the Fed’s interest rate decision on Wednesday and expectations for a more hawkish Fed could start providing support for the USD. Overall, we see the case for the uncertainty on a political level, and the perception of increased hawkishness by the Fed to support the greenback on a fundamental level.

Across the Atlantic, we note the planned speech of ECB President Lagarde and other officials of the bank, which is also to release its interest rate decision this week, yet with a totally different outlook. Overall, the market expects the bank to proceed with extensive rate cuts during the year, a tendency that could weigh on the common currency.  

EUR/USD rallied on Friday breaking the 1.0450 (S1) resistance line, now turned to support. We maintain  our bullish outlook for the pair on a technical level, as long as the upward trendline incepted since the 13  of January remains intact. The RSI indicator has risen from the reading of 50 implying a strengthening of the bullish sentiment of market participants for the pair. Should the bulls maintain control over the pair, we may see EUR/USD aiming if not breaking the 1.0600 (R1) resistance level. For a bearish outlook we would require the pair to break the 1.0450 (S1) support line, continue to break the prementioned upward trendline in a signal that the upward movement has been interrupted and continue to reach if not breach the 1.0330 (S2) support level.

USD/JPY remained in a sideways motion on Friday just above the 154.65 (S1) support line. We tend to maintain a bias for the sideways motion to continue, given also that the RSI indicator continues to run along the reading of 50, implying a rather indecisive market. Should we see the bears taking over, we may see USD/JPY breaking the 154.65 (S1) support line and start aiming for the 151.35 (S2) support level. On the flip side should the bulls take over, we may see USD/JPY breaking the 158.45 (R1) resistance base, a level tested on the 9  of January and start aiming for the 161.90 (R2) resistance level.

دیگر نکات مهم امروز:

In Today’s European session, we note Sweden’s trade balance figure for December, followed by Germany’s preliminary Ifo figures for January. On a monetary level, we note the joint speech by ECB President Lagarde, ECB Holzmann and ECB Kazimir.

در مورد مابقی هفته:

On Tuesday, we get from the US December’s durable goods orders and January’s consumer confidence. On Wednesday, we get from Australia, Q4’s CPI rates, Sweden’s GDP rate for December and New Zealand’s December trade data. On the monetary front we note the release for Canada of BoC’s interest rate decision and we highlight the release from the US for the Fed’s interest rate decision. On Thursday, we get from France, Germany, the Eurozone the preliminary GDP rate for Q4 24 and we also note Switzerland’s January KOF indicator, Euro Zone’s January economic sentiment for January. In the American session, we highlight the release of the US GDP advance rate for Q4 25 and note the release of the weekly initial jobless claims figure. On Friday, we get from Japan Tokyo’s CPI rates for January, China’s Caixin manufacturing PMI figure for January, France’s and Germany’s preliminary HICP rates for the same month, the US consumption rate and PCE rates both for December and Canada’s GDP rate for November.

USD/JPY Daily Chart

• Support: 154.65 (S1), 151.35 (S2), 149.40 (S3)
• Resistance: 158.45 (R1), 161.90 (R2), 164.50 (R3)

نمودار چهار ساعته یورو به دلار آمریکا

• Support: 1.0450 (S1), 1.0330 (S2), 1.0180 (S3)
• Resistance: 1.0600 (R1), 1.0750 (R2), 1.0935 (R3)

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