Risk-on Prevails, GBP-Traders Await Inflation Data

Equities and Other Risk Assets Gain, Safe Havens Slide

The US dollar traded lower against all but one of the other G10 currencies on Monday and during the Asian session Tuesday. It lost the most ground against CAD, AUD, SEK and NOK, while it underperformed the least versus CHF. The greenback gained only against JPY.

Nasdaq 100 — Technical Outlook

The technical picture of the Nasdaq 100 cash index on our 4-hour chart shows that this morning, the price moved strongly to the upside, after yesterday’s reversal from the short-term upside support line taken from the low of December 10th. However, the index is still trading below a short-term tentative downside line, drawn from the high of January 8th, which is currently halting the further upmove. However, given Nasdaq’s proximity to that downside line, and also taking into account the broader trend is to the upside, there is a chance to see a break of that downside line.

UK CPIs on Tomorrow’s Early European Agenda

Back to the currencies, pound traders are likely to pay some attention to the UK CPIs for December which are scheduled to be released tomorrow during the early European morning. Both the headline and core rates are expected to have risen to +0.5% yoy and +1.3% yoy from +0.3% and +1.1% respectively. Although this is a move in the desired direction, both rates are still decently below the BoE’s target of 2%, and thus, the prospect of the Bank increasing the pace of its QE purchases at some point soon is not off the table. In any case, this is something the Bank already noted that it stands ready to do. Thus, it will not come as a major surprise if it happens.

GBP/USD — Technical Outlook

Yesterday, after a brief drop below its short-term upside support line, drawn from the low of December 21st, GBP/USD reversed sharply back up. The pair is now near one of its resistance areas, at 1.3615, marked by the low of January 14th. Given that the rate travelled back above that upside line, we will take a positive approach, at least for now.

As for Today’s Events

During the European session, the final German CPIs for December, the nation’s ZEW survey for January, and Eurozone’s current account balance for November are due to be released. As it is always the case, the final German CPIs are forecast to confirm their preliminary estimates, while, with regards to the ZEW survey, the current conditions index is anticipated to have declined to -68.0 from -66.5, but the economic sentiment one is expected to have risen to 60.0 from 55.0. There is no forecast for Eurozone’s current account balance.

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JFD is a leading Group of Companies offering financial and investment services and activities.