Risk Sentiment Stays Subdued, BoJ Maintains Ultra-Loose Policy

NZD and GBP the G10 Gainers, Equities Down, BoJ Trims Inflation Forecasts

The dollar traded within a ±0.20% range against most of the other G10 currencies yesterday, with the exceptions being NZD and GBP, both of which outperformed their US counterpart. The dollar gained, only slightly, against NOK and JPY and CAD.

Nasdaq 100 — Technical Outlook

After a good rally that we saw in Nasdaq 100 from the end of December 2018, the index slid back down and dropped below its medium-term downside resistance line, taken from the high of the 1stof October. This could be seen as a negative sign, at least in the short run. In addition to that, looking at our 4-hour chart of the Nasdaq 100 cash, the index broke through the lower side of the rising wedge formation, which has been in play since the 26thof December. According to the textbook theory, this tends to be a bearish indication and the price could slide a bit further down.

GBP/JPY — Technical Outlook

GBP/JPY is currently finding good resistance near the 142.22 barrier, which continues to keep the rate down. That said, since the 2ndof January, the pair keeps on creating higher lows, trading above its short-term upside support line taken from the low of that day. As long as that line remains intact, we will continue looking in the upwards direction.

As for Today’s Events

Today, the calendar appears relatively light, with the only top-tier release being Canada’s retail sales for November. The forecasts suggest that both headline and core sales declined 0.6% mom and 0.4% mom, after a 0.3% rise and a stagnation respectively. That said, coming on top of Canada’s better-than-expected inflation prints for December, we doubt that sliding retail sales would be enough to change BoC officials’ minds with regards to more rate hikes over time.

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