Markets cautiously started very eventful week

A large number of important news reinforced the foreign exchange market volatility at the end of last week. The dollar index failed to continue to grow on Friday, losing more than a per cent, rolling away from the January highs. Despite the calm nature of trading, the US currency continued its cautious retreat. Read more

Bitcoin falls below $3,400 along with the trading volumes growth, which is often a sign of increased interest in sales and can send this currency to this year lows. Traders should remember that the darker the mood and the stronger the sales, the higher the potential and the better the moment to enter the market, for one who does not doubt the viability of this sector

Bitcoin's decline with enthusiasm

In the case of maintaining sales pressure and trading volumes growth for Bitcoin, the next target for the bears may be as low as $2,000 area. Read more

Wave Analysis: EURCHF is expected to rise further and re-test the next resistance level 1.1400
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Wave Analysis: Silver is expected to rise further and re-test the next resistance level 16.00
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GBP partially corrects its growth last week. AUD jumps on strong inflation data. Global Stock indices hold their positions ahead of FOMC

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Another dramatic evening last night, as the UK Parliament votes down amendments to the draft Brexit agreement. The pound has dropped by 0.5% in the last 24 hours and the GBPUSD pair is now at 1.3070. Read more

The earnings season rolls on and this time it’s Apple’s turn. Their report exceeded expectations and drove the stocks up by 5.5% at the pre-markets before the official sessions began. Earlier in the year, the company has made revenue warnings, causing the markets to expect a far worse report, however, it stated that Apple has only lost 5% of its sales. Furthermore, the investors are positive about the profitability of Apple.

On the other hand, market analysts are expecting a further decline in sales, while Apple tries to drastically change the situation by lowering the price of their products in regions where the volatility of the currency rate caused a sales slump. The question is what impact will that have on profitability.

FOMC preview: expect softer Fed, but not exclude “surprises”

If the Fed in its comments will blur the need to further tightening policy soon, this will be a moderately positive scenario for the stock markets and bad news for the dollar. Not a big shock, but it still will be a clear shift in comparison with the December tone.

As usual, there may be surprises. The Fed, on the basis of strong data earlier and assuming that healthy growth rates will continue, may well warn of an intention to continue raising interest rates soon. This will be an unpleasant surprise for the stock markets. Potentially, the Fed's decisiveness is able to launch a new wave of sales on the markets, as was in October-December. For the dollar, this will be a real gift, and it can sharply turn to growth.

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🗓 Important upcoming events and publications for January 31 (GMT):

🇪🇺 10:00 Euro area GDP preliminary estimate may have a visible impact on #EUR. Economists, on average, are expecting to see the slowdown from 1.6% to 1.2% y/y, which would be the slowest growth from 2014. Until the release of data for the whole Euro-region, indicators for individual countries will be released, which could also trigger EUR volatility. In our view, there are risks of even more rapid deceleration.

🇨🇦13:30 Canada GDP is expected to fall by 0.1% in November to 1.6% y/y. Weaker data can further harm #CAD, underlining the economic weakness. At the same time released producer prices index could also affect prices.

🇺🇸13:30 U.S. Initial unemployment claims are in the market focus in the run-up to the release of Friday employment report. A week earlier this figure fell to 199K, which was a very good result. Another portion of the strong data (low claims number) are able to support the #USD, tuning markets on healthy employment growth.

Visit https://fxpro.news/economic-calendar/ for more details.

The markets welcomed “patient” Fed, moved to new monthly highs. Dollar fell under pressure after FOMC signaled that interest rate hikes period be at an end

The Fed may be not enough

The American dollar came under pressure because of the willingness of the Fed to be patient in assessing the situation. This was regarded as a signal of readiness not only to take a pause in rate increases but also to complete the policy tightening cycle

The reaction, triggered by the Fed, is capable to develop a trend for the dollar decline. However, one should not lose sight of the fact that the softness of central banks over the past month (not only the Fed, but also the ECB, the People’s Bank of China, etc.) is associated with anxiety about the global growth prospects.

Most often it turns out that markets calm is temporary, and the situation continues to deteriorate, as the “wait and see” approach, which the Fed adheres to, does not correct the situation by itself.
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Wave Analysis: Copper is expected to rise further and re-test the next resistance level 283.00
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Wave Analysis: CHFJPY is expected to fall further and re-test the next support level 109.00
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The dollar has won back some loses overnight after the Fed. EURUSD once again was not able to stay above 1.15. Nevertheless, global stock indices are developing their growth

🗓 Important upcoming events and publications for February 1 (GMT):

🇪🇺 10:00 Eurozone CPI is expected to continue its slowdown. Markets have intensified their attention on the region's data, selling out the #EUR on signs of slowing growth and inflation.

🇺🇸13:30 U.S. Employment report will be in focus of the markets today and almost inevitable will provoke a strong surge of volatility. Analysts are expecting to see employment increase by 165K vs 312K month earlier. On the one hand, we saw the jump in the number of initial claims from 200K to 253K. But on the other hand, ADP reported the increase in the number of jobs by 213K vs expected 180K.

🇺🇸 15:00 US Manufacturing ISM will be in the shadow of labour market statistics. This time it will be able to have a significant impact on the markets only in case of significant deviations from forecasts. In December the index fell from 59.3 to 54.1. It is expected a small increase to 54.3 in January.

Visit https://fxpro.news/economic-calendar/ for more details

Relatively quiet start of the week on markets. Yen noticeably declines to the dollar; the other major currencies grow a little. Brent added more than 3% on Friday, and keeps its positions on Monday