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FX markets enter the new week with market sentiment firmly risk-on with all-time highs seen in US and Japanese indexes after a blowout earnings report from AI darling Nvidia (NVDA) sent stocks surging. Ahead this week we have key inflation data out of the US, Australia and Japan along with a RBNZ rate decision which is certainly in play. The Charts to watch this week Gold – XAUUSD Despite the buoyant market sentiment gold gained last week as the USD chopped around without real direction.

XAUUSD finding good support at the 2020 USD an ounce level in the second half of the week. This will be a key level to watch coming into Thursdays PCE inflation data out of the US a cooler than expected reading could see the USD decline continue and likely to add to golds bullish recovery. USDJPY Japanese inflation data released Thursday is expected to show a sharp drop in January due to a high base last year this could impact the JPY even further, raising doubts around one of the Bank of Japan’s two conditions for policy normalisation and be bullish for USDJPY.

Though above 150 there is the specter of BoJ intervention such as we saw at these levels late in 2022. Currently 150 has become a support level for USDJPY, but upside in this pair seems capped with little upside momentum shown recently, FX traders no doubt cautious at these levels. AUDNZD Both AUD and NZD outperformed last week as market optimism and steps by Chinese authorities to support their stock market lifted both the Antipodean currencies.

NZD did outperform the Aussie though, with AUDNZD hitting new 9-month and 2024 lows. This week will be a big one for AUDNZD traders, with Aussie CPI expected to rise and a RBNZ rate decision where the bank is expected to hold rates both happening on Wednesday. The market is pricing in a 30% of a hike from the RBNZ, so whichever way they go expect some volatility in NZD crosses over this announcement.

Full Economic calendar of the week ahead at the following link: https://www.gomarkets.com/au/economic-calendar/

FX traders have a bumper week of major economic announcements to navigate, with markets in a holding pattern awaiting the pivotal January Federal Reserve meeting, adding to that a Bank of England policy meeting, CPI readings out of Australia and Europe topped off by the US non-farm employment report. The Charts to Watch: AUDUSD – Aussie CPI and Chinese manufacturing PMI Since hitting a cycle low of 0.6525 and finding support at the December lows on January 17 AUDUSD has traded in a tight range between that support and 0.66 where multiple attempts to push higher have been rebuffed. This week’s data looks set to test that range, starting with Aussie CPI and to a lesser extent a Chinese manufacturing PMI on Wednesday. 0.66 will be the level to watch if we get a hot CPI reading, the support at 0.6525 to the downside if there is a cooler than expected reading.

GBPUSD – Bank of England policy meeting Cable has also spent the last week chopping around in a tight range, GBPUSD price action has been contained in a myriad of technical levels with resistance to the upside at 1.27720 and support at the lower 2024 trendline around 1.2650. At this weeks Bank of England meeting, the central bank is expected to gold rates steady but is will be the accompanying statement and presser where traders will look for clues as to when the bank may start cutting rates that will see FX markets re-price. US Dollar Index (DXY) – FOMC and NFP ahead DXY comes off a choppy week with a pivotal FOMC meeting on Thursday and the always market moving NFP on Friday to get things moving.

The 2024 advance in DXY has been capped by resistance at the 200-day moving average along with the July lows-October highs 50% fib level at 103.55. The Fed is widely expected to hold rates steady at this meeting, with futures only pricing in a 2% chance of a cut, but it will be the messaging regarding the March meeting (where there is a 50-50 chance of a cut) that should see some volatility in the USD as markets re-price those odds. 103.55 will be the level to watch for the next move in DXY with a break above or below possibly signaling the next trend in DXY. The weeks full calendar at the link below: https://www.gomarkets.com/au/economic-calendar/

With FX markets being pushed and pulled by market participants betting on when the major central banks are going to start cutting rates (or not) FX traders have some important risk events that will influence those expectations to negotiate this week. CPI and retail sales headline in the US, Aussie traders have the January Jobs report and for Sterling traders, UK GDP figures. The charts to watch US Dollar Index (DXY) – CPI to sway market pricing of a March cut Recent strong employment and growth data out of the US has seen the market reprice significantly lower the chance of a Fed rate cut in the March meeting, with odds currently sitting at around 19%, from around 50% only a couple of weeks ago.

This week’s CPI will likely go a long way to settling market expectations on this. DXY has had a strong run up in 2024 so far as continued Fed pushback on rate cut expectations has supported the USD. Key levels to watch this week are the 100 day SMA to the upside which has capped further upside in the DXY over the last few sessions, and the 200 day SMA to the downside for support.

AUDUSD – Will jobs bounce back after December’s shocker Last Tuesdays RBA meeting saw no cut as expected but with a hawkish bias in the accompanying statement. This was a relief for AUDUSD bulls after a break lower of the support level at 0.6525 on Monday looked like a significant decline was ahead for this pair. The RBA has a dual mandate of inflation and employment to look after, so this week’s Jobs report will be closely watched after the big miss in December’s figure.

The once support of 0.6525 has now established as resistance paired with the 100 Day SMA and will be a key level to watch with this week’s data as to the Aussies next move. The weeks full calendar at the link below: https://www.gomarkets.com/au/economic-calendar/

Markets enter the new week with risk-on firmly the narrative with all three major US indexes hitting all-time highs last week. In FX markets, the positive market sentiment has seen the march higher in the US Dollar hit resistance and cyclical currencies AUD, NZD and GBP bounce. Ahead this week, traders have a slew of risk events to navigate with Central Bank meetings in Canada, Japan and Europe set to headline, also some big US data in Q4 GDP and the PCE inflation reading set to move FX markets.

Charts to Watch USDCAD – Bank of Canada set to hold after hot CPI A hotter than expected December inflation reading out of Canada presumably will make any meaningful dovish shift from the BoC very unlikely in this week’s policy meeting with markets fully pricing in a hold from the central bank. The 2024 rally in USDCAD hit resistance at the 50% fib level last week and pulled back sharply to test the lower trend line support late in the week. Key levels to watch will be the 50% fib level to the upside (1.3541) if the Bank does confound analysts and take a dovish turn.

If the bank strikes a hawkish tone then the trendline support followed by the big figure at 1.34 to the downside. EURUSD – to pushback or not pushback In December’s policy meeting the ECB basically announced the end of the current rate hiking cycle. Since then markets have priced in an aggressive trajectory of ECB rate cuts this year against the backdrop of a slowing EZ economy.

Are the markets being too dovish in their predictions? This weeks ECB meeting may settle it if we see a hawkish pushback, or no pushback at all. EURUSD set new 2024 lows last week, breaking the key 1.09 support level, which has now turned into resistance.

This will be a key level to watch this week to see if it can re-establish itself as support, or continue as a cap to the upside. USDJPY - BoJ to maintain YCC No surprises are expected from the BoJ on Thursday, with the bank look set to maintain its YCC policy and negative short-term rate policy. It’s more likely any policy shift will come after the March annual wage negotiations, though the BoJ have been known to surprise before.

USDJPY has risen sharply in 2024, at these levels it does look a little overbought as it has streaked ahead of the US10Y-JP10Y yield differential which has been the main driver of this pair in recent past. We are also approaching the 150 level, where chatter of intervention may start up. The weeks full calendar at the link below: https://www.gomarkets.com/au/economic-calendar/

FX traders come into the new week with an uptick in tier one economic releases to look forward to after a very slow start to the year volatility-wise. Australian and US employment figures, UK CPI and US retail sales look to headline from Tuesday onwards (Monday is a US public holiday) The Charts to watch: AUDUSD AUDUSD has struggled to find any real direction in the last week of trading after a marked decline to start the year. The pair has whipsawed in a tight range from 0.6735 to the upside with a lower range boundary of 0.6645.

With the market still undecided on the RBA’s moves going forward (peak rates? cuts?) Thursday’s job report could see the Aussie find some direction, with the above range levels the key levels to watch. After November’s bumper figure a surprise to the downside this time round could be on the cards. GBPUSD The uptrend GBPUSD has travelled in since October has petered out somewhat in 2024 to date with Cable also trading in a directionless range for the last week.

For chartists there is a multitude of important levels to watch coming into the new week. Upper trendline and cycle high resistance along with lower trendline and cycle low support being the key levels to watch this week. To add to the mix for fundamental traders we have UK CPI and retail sales along with another speaking engagement for BoE governor Bailey.

USDJPY Bucking the trend of the low volatility of other pairs, USDJPY has had s harp rally so far in 2024, following US10-JP10 yield differentials higher. Last weeks move higher in the pair saw a disconnect in the relationship and USDJPY could struggle to push much higher unless this differential turns around. US economic releases this week will play a big part in where those yields go, with retail sales, employment and consumer sentiment all due to hit the wires from Wednesday onwards. 146 to the upside and 144 to the downside the key levels to watch for the chartists.

Full weeks calendar at the link below: https://www.gomarkets.com/au/economic-calendar/

Global markets enter the second week of the new year in cooldown mode with risk assets taking a hit after the red-hot finish to 2023. The NASDAQ having its worst start to a year since 1999, dropping almost 4% on the week, risk sensitive currencies AUD and NZD following not far behind. FX traders have a slew of CPI reports in the coming week to look forward to, with inflation readings out of Switzerland, Australia, China and the US that have the potential to get FX markets moving.

Charts to Watch Gold – XAUUSD Gold faltered last week as higher yields and a US dollar on tear weighed on the precious metal. Attempts by the bulls to push through and hold the key 2070 level were rebuffed and saw XAUUSD drop to a low of 2025 in Fridays NFP inspired volatile session. This weeks US CPI figure will be a big test of the markets pricing of Fed rate cuts, hotter than expected and gold could take another leg down with that 2070 resistance level capping the upside.

Cooler than expected could see the bulls make another attempt to breach and hold that level as support. AUDUSD AUDUSD didn’t have a great week either, having its biggest weekly drop since November. Decembers surge higher in this pair did look like to far too fast when looking at the AU and US rate differential, AUDUSD also hit a zone of resistance between 0.68 – 0.69 where sellers managed to turn the pair around.

This week’s Aussie, Chinese and US CPI readings all set to causing some volatility in the pair. Key level to watch to the upside is the resistance starting at 0.6800, to the downside the big figure at 0.6700 has lent some short-term support to this pair. US Dollar Index - DXY The US dollar has had a resurgence to start 2024 with DXY pushing through key levels 101 and 102 with ease.

Resistance at 102.57, where upside faltered in December and August ’23, has come into play and a couple of attempts to breach were rejected last week. This level also lines up with the 61.8% Fib level measured from the July lows to October highs and will be the key level to watch coming into the US CPI reading. Full calendar of the week’s economic announcements at the link below: https://www.gomarkets.com/au/economic-calendar/