Upbeat China Data may Unlock more Upside in Euro and other Pro-Cyclical Currencies

The unexpected rebound of the Chinese economy as seen in the latest batch of Chinese data reinforced the idea that a hidden China economic momentum will unlock the upside in pro-cyclical currencies, including the euro. The decline in natural gas prices pushes the idea of an energy crisis deep to the sidelines causing revisions of growth prospects of energy importers to the upside. Today the market’s focus is on the UK employment data, German ZEW index, Canadian CPI and the US Empire State manufacturing index.China statistics for December and 4Q 2022 made somewhat displaced market fears that the coronavirus restrictions left a scar on the body of the economy that will greatly hamper its recovery. GDP expanded by 2.9% in the fourth quarter (forecast 1.8%) while industrial production grew by 1.3% (forecast 0.2%) in December. The market missed the mark greatly in the retail sales growth forecast - the decline was just 1.8%, compared to the forecast of -8.6%. December data confirms the suggestion that, despite the increase in cases, the mobility story positively dominates China's consumer demand story.However, the release of Chinese data did not trigger any subsequent buying of the yuan or Asian currencies. This response could be attributed to the lull before the Chinese New Year starting next week and risk aversion before the BOJ meeting tomorrow. The dollar remains broadly stable, moving in the 102-102.50 range in DXY. Tomorrow during the Asian session, a downside breakout could occur if the BOJ changes its 10-year JGB yield target again.Growing signs of a slowdown in US price pressures, weakening business indicators, an improved demand outlook in China, and reduced risks of an energy crisis have all combined to reduce the huge imbalance between the growth outlooks of the US economy and its opponents that was a major investment thesis in 2022. EURUSD is clearly looking for an opportunity to break to new local highs, buyers' interest in the pair remains high. The target 1.10 for EURUSD remains relevant given that we saw a decent USD consolidation after the steep decline.The UK employment data and the ZEW business sentiment report pleased European currency buyers as they showed surprises on the upside. The ZEW sentiment index diverged especially strongly from the forecasts: despite expectations of a negative print, it entered a positive area for the first time in many months:The Bloomberg report that the ECB will follow the Fed's example and slow down the pace of rate hikes to 25bp in March caused some volatility in EURUSD and stripped somewhat of the near-term bullish momentum. However, the impact of this news is likely to be short-lived and the pair will soon resume its upward movement, as the dominant idea in the market remains the alignment of yield outlook in the US and outside of America. The Bank of Canada (BoC) looks set to face an increase or no increase dilemma at its policy meeting next week (January 25). Signs of a slowdown in economic activity were included in the latest statement from the Bank of Canada and were clear in yesterday's Bank of Canada Business Outlook, where the index of future sales fell to its lowest level since the pandemic, and most of the firms surveyed said they expected a recession in Canada. However, employment figures in the December report turned out to be very strong, and high full-time hiring kept the unemployment rate at cyclical lows.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/upbeat-china-data-may-unlock-more-upside-in-euro-and-other-pro-cyclical-currencies"
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Is now a good time to buy a house?

Is now a good time to buy a house? That’s something many people might be asking as house prices start to show their first monthly decline since July 2021.

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The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investors to buy.

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Wages jump - could interest rates rise faster?

Wage growth is running at its highest level since records began, which could lead the Bank of England to hike interest rates more aggressively to put the brakes on inflation.

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Market Spotlight: Shifting Fed View Drives Bitcoin Bounce

BTC Rebound UnderwayFollowing heavy losses over 2022, Bitcoin is starting the year in a much more encouraging manner. The leading crypto asset has recorded a roughly 30% rally over initial 2023 trading, taking price back up to levels last seen in September 2022. The main driver behind the move appears to be the shift in expectations regarding the pace and duration of US rate hike. With US inflation continuing to cool sharply, traders are anticipating a further slowing of Fed rate hikes from next month. Additionally, looking out across the year there is a growing view that should inflation continue to fall at the current pace, the Fed will likely halt its tightening operations ahead of current projections.This peak inflation narrative is key for crypto as ballooning inflation last year, and the subsequent wave of central bank tightening, was the chief architect of the demise of crypto in 2022. If the US continues to decline in coming months and the Fed does indeed further slow the pace of tightening, this should pave the way for a continued rebound in BTC and the broader crypto-world alike.Technical ViewsBTCThe rally in BTC this year has seen the market breaking above the bearish trend line and above two key resistance levels. With momentum studies now firmly bullish, the focus is on a continued push higher while price holds above the 20575 level with 22600 the next upside target for bulls. To the downside, any move below 20575 will see 18545 come into play as the next support to note.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-shifting-fed-view-drives-bitcoin-bounce"
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Technical Trade Set Ups for EURAUD, USDJPY & Crude Oil

Technical Trade Set Ups for EURAUD, USDJPY & Crude Oil

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Market Spotlight: Goldman Earnings in Focus Today

Goldman To Follow JPM & Citi?Shares in US banking giant Goldman Sachs are trading higher ahead of the open today as traders brace for the group’s Q4 earnings. A slew of strong earnings from leading financials on Friday has helped stoke sentiment ahead of the release. In terms of the numbers, Wall Street is looking for EPS of $5.56 on revenues of $10.75 billion. Goldman has been on a strong run recently with three consecutive quarters of topping analyst expectations. Given the current backdrop, a strong result today should propel GS shares back up towards the November 2022 highs around $388.However, as we saw with JPM and Citi last week, alongside the headline figures, traders will also be looking at the breakdown of the group’s business sectors. With both banks recording a heavy drop in investment banking revenues, investors are bracing for a similar story from Goldman today. The market will also be keen to head CEO Solomon’s outlook and how he views downside risks not just to the bank but the US economy as a whole, particularly in light of Goldman laying off more than 3000 employees just last week.Technical ViewsGSThe rally in GS shares has seen the stock climbing back above the 357.35 level. Price is now testing the area of resistance around the bull channel top and the 377.76 structural level. This is a key resistance zone for GS and a break above here will open the way for a further run towards 402.39 next, in line with bullish momentum studies readings.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-goldman-earnings-in-focus-today"
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Daily Market Outlook, January 17, 2023

Daily Market Outlook, January 17, 2023 China Growth Concerns Cap Asian Equities EX Japan, BoJ Bets Supports The NikkeiChina growth concerns have put a cap on the Asian equity markets' bullish sentiment with the MSCI Asia Pac index retreating from seven month highs. China data confirmed 2022 as a dire year for the region with a meagre 3% annual GDP from 8.4% the year before, confirming lowest levels in 50 years. While Q4 GDP marginally exceeded economist expectations at 2.9% versus 1.6%, down from 3.9% in Q3  22, Asian investors pared support for Chinese equities, investors will be hoping that the contraction in growth may spur further stimulus measures to tackle the economic distress driven by last years strict Covid restrictions. Uk employment data released earlier this morning has added pressure on the Bank of England who may now be poised to raise interest rates for the tenth consecutive time at their next meeting. While the unemployment rate remained anchored at 3.7% for the three months to November, however, UK wage growth once again topped expectations for both headline and ex bonus metrics, printing 6.4% above the expected 6.2%. The robust data has the UK benchmark FTSE index teerting on break out to new all time highs.In the Eurozone investor focus this morning will be on the German ZEW survey for January, market watchers are anticipating continued marginal improvement in investor sentiment, the last print was -23.3, analysts are looking for at least a 10 point pick up in expectations, while the current situation view is also expected to improve from the -61.4, further upticks in expectations and the current situation perspectives would suggest the potential for a milder downturn in the Eurozone economy, this comes at a time when Bank of America’s Fund Manager survey shows investors are the most bullish the region since Feb ‘22.In the US all eyes will be on New York Empire manufacturing data one of many regional surveys due to show where sentiment sits heading into the new year, market watchers are pencilling marginal improvements from -11.2 to -5.0 Markets-wise, all eye are this evenings Bank of Japan meeting, arguably one of the most market moving central bank meetings of the year, although markets don’t expect an explicit policy change, markets are poised for official statements, since the surprise policy adjustment in December, markets are increasingly betting on an end of the decade long Yield Curve Control strategy, investors are poised for volatility with options markets pricing the potential for a 200-285 pip move either side of the spot price going into the meeting, current spot reference is 128.50Overnight News of NoteAsia Shares Slip Overnight On Weak Q4 China Economic DataUS Futures Lower As Investors Look To Corporate Earnings BoJ Policy Change Fears Sidelines Bond Sales Amid Spreads RisingOil Steadies As Investors Look To Chinese Demand Increase Goldman Sees ‘Bullish Concoction’ For Global Commodities Gold Prices Dips As Firmer Dollar Demand Lowers AppealChinese Growth Drops To Near-Historic Lows After Covid ReopenChina Population Shrinks In First Time Since 1960s In Seismic ShiftSec Blinken Set To Test Limits Of Chinese Diplomatic EngagementChief Executives, Economists Brace For Recession As Davos BeginsNew BoJ Governor Nominee Set To Be Presented On February 10Australia Consumer Sentiment Posts Biggest Gain In Nine MonthsEU Hopes Of Italy ESM Approval May Be Premature, Official SaysBoE Governor Warns Of Upside Risks From Labour Market, ChinaChinese Chip Giant Weighs IPOs, Land Sales To Slash Debt BurdenFoxconn Replaces iPhone Assembly Chief After Tumultuous YearsWestern Banks Struggling To Exit Russia After Putin Interventions(Sourced from Bloomberg, Reuters and other reliable financial news outlets)FX Options Expiration, New York Cut 10am ESTUSD/JPY 125.00 ($651M) 127.85 ($325M) 130.22 ($570M)AUD/USD: 0.6800 (A$2.0B) 0.7210 (A$1.4B)(Options Data DTCC)Technical & Trade ViewsSP500 Bias: Bullish Above Bearish Below 3950 Primary support is 3950Primary objective is 4022Below 3940 opens 389020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Bullish Above Bearish below 1.0735Primary support  is 1.0735Primary objective is 1.09Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Bullish Above Bearish below 1.21Primary support  is 1.21Primary objective 1.2315Below 1.21 opens 1.2020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Bullish above Bearish Below 130Primary resistance is 130Primary objective is 125.50Above 130.80 opens 132.2020 Day VWAP bearish, 5 Day VWAP bearishAUDUSD Bias: Bullish Above Bearish below .6920Primary support is .6920Primary objective is .7030Below .6900 opens .682020 Day VWAP bullish, 5 Day VWAP bullishBTCUSD Bias: Bullish Above Bearish below 20000Primary support 20000Primary objective is 22400Below 19900 opens 1930020 Day VWAP bullish, 5 Day VWAP bullish

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-january-17-2023"
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US dollar: bearish sentiment still prevails despite major decline

After falling last week by 2% to 101.80, the dollar index rebounded on Monday amid no visible bearish catalysts to push lower. The rebound could be also facilitated by the fact that the price has reached the lower bound of the bearish channel:From a technical point of view, upside USD correction after the significant drop may extend to 102.50, but the main trend remains bearish with a key target at 100 points.The US market is having a partial Martin Luther King Day holiday today, so market prices will likely remain range-bound. The economic calendar this week is nothing special, with US retail sales, industrial production and existing home sales adding to the picture that the NFP and CPI report for December have formed. However, positive surprises are not expected and moderately negative readings (i.e. surprises on the downside) are unlikely to change the forecast for Fed rate hikes in February and March. Consensus forecast calls for two increases of 25 bp.The market is now clearly biased to get ahead of itself and price in rate cuts for this year, along with the recovery of economic activity in China, this increases investor interest in EM currencies, where expected returns increase. What seems to be a compelling call in the market right now is that the dollar has reversed, the pressure on EM currencies through rate hikes has declined significantly, and 2023 will mark a trend of inflows to emerging markets, lower rates and upside trends in EM bond markets. Indeed, one of the benchmark bond market indices in the national currency of developing countries has already gained 4.2% this year and trimmed more than two-thirds of last year's fall. The continued success of this story clearly depends on both the soft Fed story and more positive news from China.As far as China is concerned, we see that local authorities acknowledge the rise in the death toll following the abandonment of the zero-spread Covid policy last November. It is clear that any new closure will undermine optimism this year. In addition, China's fourth-quarter GDP is due tomorrow and is expected to contract from the exceptionally low quarter by 1.5% year-on-year.Also a lot of attention this week will be paid to the meeting of the Bank of Japan (BoJ) on Wednesday. Further adjustments to JGB targets are in the spotlight and investors are bracing for this with higher interest rates on long-term swaps. Japanese 10-year swap rates rose another 5 basis points overnight to their highest level in a decade. USD/JPY may fall to 126.50 before Wednesday on expectations of new hawkish BoJ decisions:Factors putting pressure on DXY below 102 remain in place and if the decline does resume DXY may find support in the 101.30-101.50 area.EUR/USD continues to try to settle above 1.09. The focus in Europe this week could be some keynote speakers at the World Economic Forum in Davos, where European Central Bank President Christine Lagarde will speak on Friday. We will also see some data from Germany in the final CPI and ZEW investor outlook survey, which is expected to improve. As above, the EUR/USD rate is likely to depend on the events in Asia this week. However, EURUSD is unlikely to rise above 1.0900-1.0950.Also this week there will be a meeting of the Norges Bank. A final 25bp rate hike is expected, up to 3.00%. Demand remains on the oil market amid expected growth in demand from China which should continue to offer support to the NOK.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/us-dollar-bearish-sentiment-still-prevails-despite-major-decline"
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House prices rise in January

Rightmove reveals house prices went up in January, with the asking price up by thousands

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Market Spotlight: BOJ Speculation Risks EURJPY Downside Break

EURJPY Sitting on Key Level Price action in EURJPY is looking interesting here. The pair is currently sitting near the middle of the 133.27 – 147.75 range which has framed price action since Q2 last year. Over the last few months, EURJPY has been correcting lower, despite broad strength in EUR. Of late, JPY has turned sharply higher driven by speculation that the BOJ might be close to beginning policy normalisation after sticking to its easing strategy throughout the post-pandemic period to date, despite other central banks in the G10 firmly embarking on tightening operations. This speculation is driving a shift in expectations and has the potential to cause a major shift in markets if the BOJ gives any sign this week that tighter monetary policy is on the horizon.The monetary policy divergence between the BOJ and other central banks was a key driver of downside action in JPY last year. However, with central banks such as the Fed, BOC and RBA having pivoted on rates, that monetary policy divergence is narrowing. Should the BOJ give any hawkish signals this week, we can expect that divergence to narrow at a faster pace, driving JPY higher near-term. With the retail market building a larger long position in EURJPY currently 62%, there is plenty of room for a downside break in the near-term.Technical ViewsEURJPYThe correction lower from last year’s highs has seen the market moving broadly within a corrective bear channel, taking price below the bullish trend line from last year’s lows. With price having recently failed at a retest of the bull trend line, the outlook remains in favour of further downside near-term, in line with weakening momentum studies. The key level to watch is the 137.74 level with a break of this area opening the way for a run down to 133.27 next.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-boj-speculation-risks-eurjpy-downside-break"
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Coffee C Futures ( KC1! ), H4 Potential for Bearish Drop

Type: Bearish DropKey Levels:Resistance:154.30Pivot:164.00Support:142.05Preferred Case:Looking at the H4 chart, my overall bias for KC1! is bearish due to the current price being below the Ichimoku cloud , indicating a bearish market. If this bearish momentum continues, expect price to continue heading towards the support at 142.05, where the recent low is.Alternative Scenario:Price may head back up to retest the resistance at 154.30, where the 38.2% Fibonacci line is.Fundamentals:There are no major news.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/coffee-c-futures-kc1-h4-potential-for-bearish-drop"
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Nikkei Futures ( NKD1!), H4 Potential for Bearish continuation

Type: Bearish continuationKey Levels:Resistance:26555Pivot:25960Support:25610Preferred Case:Looking at the H4 chart, my overall bias for NKD1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. If this bearish momentum continues, expect price to continue heading towards the support at 25610, where the previous swing low is.Alternative Scenario:Price may head back up to retest the pivot at 25960, where the 61.8% Fibonacci line isFundamentals:There are no major news.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/nikkei-futures-nkd1-h4-potential-for-bearish-continuation"
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Bitcoin Forecast: Potential Rise Ahead

Last week Bitcoin jumped quite a bit, forming the tower candlestick. This candlestick is strongly supported at the level of 16000. The price of Bitcoin also broke the weekly downtrend and got back to the supporting level of 16000. Next, Bitcoin has tested the broken trendline. The asset has been remaining in a very narrow range for eight weeks in a row, preparing for the next breakout.Should Bitcoin manage to break the level of 21000, it is likely to jump. Considering the width of the broken trend and the depth of Bitcoin’s drop, it is safe to say that the price of Bitcoin might potentially hit the level of 40000. Although to get the required momentum for the rise, the asset will have to break two more resistances at levels 25500 and 30000. So, let’s observe what will happen next.The price of the currency pair EUR/USD broke the resistance at the level of 1.0785. Currently, the asset is trying to remain above the broken line. Should the asset’s price remain the same at the beginning of the next trading week, the currency pair might keep going up.Silver is repeatedly approaching the resistance at the level of 24.75 although it’s not clear just yet what is about to happen next. It would be wise to follow the price movements next to this level to predict the asset’s next move. Although gold is going up so silver might follow this trend as well.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/bitcoin-forecast-potential-rise-ahead"
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