FX traders are bracing for a busy day ahead with a full event calendar and the potential for more moves on the back of fresh updates from the new US government. Yen traders are likely to have the busiest day of all the currencies with the Bank of Japan rate call due out midway through the Asian trading session. The market is pricing in an 80% chance that the Bank will hike rates by 25 basis points, which will be its biggest move in 18 years, and traders are expecting to see plenty of moves around the event. As always, a shock in the rate decision will probably get the most out of the market but more realistically it will be the forward guidance that we get from the statement and press conference that will provide the best trading opportunities.

Many traders will be looking at the crosses to take advantage of the opportunity with the dollar likely to remain volatile later in the day from political updates out of the states. AUDJPY is sitting near good technical levels on the Daily chart and could provide one of the better opportunities especially if we have some strong guidance on where the BOJ are heading in the months ahead. With the RBA’s next move expected to be a cut and the BOJ in a hiking cycle, the AUDJPY could provide a solid interest rate differential trade that longer-term traders tend to prefer. The pair is sitting just below good trendline resistance on the Daily chart and any hawkish tone from the Bank or Governor Ueda could see sellers enter the market ahead of that level, whilst anything that could sound less hawkish could see that level challenged and open up the possibility for a break into a fresh topside range.

Resistance 2: 99.15 – January High

Resistance 1: 98.39 – Trendline Resistance and Jan 22 High

Support 1: 96.07 – 2025 Low

Support 2: 93.69 – Trendline Support

The post Trade the AUD/JPY on the Bank of Japan Rate Decision first appeared on IC Markets | Official Blog.

US Stocks Hit New Highs on Trump Update – Dow up 0.9%

US stock markets jumped to fresh record levels in trading yesterday after President Trump called for rate cuts from the Federal Reserve. The Dow powered up 0.91%, the S&P 500 notched a new record close after rising 0.53%, and the Nasdaq added 0.22%. The dollar dropped back but remained within tight ranges against the majors, with the DXY falling 0.12% to 108.12.

US Treasury yields experienced a mixed day, with the 2-year yield falling 1.1 basis points to 4.287%, while the longer-dated 10-year yield gained 3.3 basis points, moving up to 4.644%. Oil prices fell again following Trump’s speech, with Brent crude down 1.49% to $77.82 and WTI falling 1.62% to $74.22. Gold drifted slightly lower from recent highs, closing down 0.11% at $2,753.87 per ounce.

Oil Continues to Fall in Slippery Conditions

Oil prices took another step down in trading yesterday after Donald Trump called for prices to pull back across the globe. WTI is now down just over 8% from its 2025 high, which it reached just six days ago. There is no doubt that President Trump has played a significant role in the recent moves, having declared a national energy emergency earlier in the week, followed by last night’s call to the market.

WTI is now trading in the middle of recent ranges, with traders anticipating further downside unless there is a sharp change in underlying fundamentals. Resistance is now seen around the $80 level, while support sits close to $70. Traders expect fast and volatile moves within this range until more clarity emerges on the new government’s policy implementations and further updates from the global market.

Busy Trading Day to End the Week

Today could mark the busiest trading day of the week, with a plethora of key data releases across sessions, including the latest rate decision from the Bank of Japan. The focus will be squarely on Japanese markets this morning, with JPY traders expecting significant volatility surrounding the Bank’s anticipated rate hike.

A raft of flash services and manufacturing PMI figures is due globally, with data releases from France, Germany, the Eurozone, the UK, and the US among others, offering plenty of trading opportunities. Additionally, European Central Bank President Christine Lagarde will speak in Davos during the European session, while the US will release existing home sales data and revised University of Michigan Consumer Sentiment figures later in the day to close out the trading week.

The post General Market Analysis – 24/01/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 24/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.95%, Shanghai Composite up 0.80%, Hang Seng down 0.30% ASX down 0.61%
• Commodities : Gold at $2759.35 (-0.26%), Silver at $31.15 (-0.8%), Brent Oil at $78.79 (-0.19%), WTI Oil at $75.24 (-0.23%)
• Rates : US 10-year yield at 4.609, UK 10-year yield at 4.6305, Germany 10-year yield at 2.4980

News & Data:

• (CAD) IPPI m/m  0.2% vs 0.5% expected
• (CAD) RMPI m/m  1.3% vs 0.4% expected

Markets Update:

Asia-Pacific markets traded mixed on Thursday as investors analyzed regional economic data, with Chinese stocks leading gains. Hong Kong’s Hang Seng index rose 0.24%, while the CSI 300 climbed 1.01% after China’s financial regulators urged major state-owned mutual funds and insurers to increase stock purchases to support the struggling market. Meanwhile, Australia’s S&P/ASX 200 declined 0.72%.

In Japan, the Nikkei 225 gained 0.84%, and the Topix added 0.6%. South Korea’s Kospi dropped 0.78%, while the Kosdaq fell 0.76%. The country’s economy expanded 1.2% year-on-year in Q4, marking its slowest growth since Q2 2023. Investors are also awaiting Singapore’s December inflation data and the outcome of the Bank of Japan’s policy meeting, where BOJ Governor Kazuo Ueda has hinted at potential rate hikes.

U.S. markets saw gains overnight, with the S&P 500 reaching an intraday record of 6,100.81 before closing at 6,086.37, up 0.61%. The Nasdaq Composite surged 1.28% to 20,009.34, reflecting strong performance in technology stocks like Oracle and Nvidia amid AI optimism and President Donald Trump’s new term. The Dow Jones Industrial Average rose 130.92 points (0.3%) to 44,156.73, boosted by Procter & Gamble’s nearly 2% gain following strong earnings.

With key economic data releases and central bank decisions in focus, investors are closely monitoring market movements across the Asia-Pacific region and global financial markets. The interplay of economic policies, earnings reports, and investor sentiment will continue to drive volatility in the coming sessions.

Upcoming Events: 

• 01:30 PM GMT – CAD Core Retail Sales m/m
• 01:30 PM GMT – CAD Retail Sales m/m
• 01:30 PM GMT – USD Unemployment Claims
• 04:00 PM GMT – USD President Trump Speaks

The post Thursday 23rd January 2025: Asia-Pacific Markets Mixed as Investors Eye Economic Data  first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 23 January 2025

What happened in the Asia session?

It was a relatively quiet session as the dollar index (DXY) inched higher towards 108.40 while spot prices for gold retreated towards $2,750/oz. With no major news events during the European session, trading activity is likely to pick up once the U.S. session commences.

What does it mean for the Europe & US sessions?

Consumer spending in Canada has been robust from July through October but estimates point to a small rise in November. Retail sales are expected to increase just 0.2% MoM despite the Black Friday sales that took place during that month. Should sales disappoint market expectations, the Loonie will likely depreciate further.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (1:30 pm GMT)

President Trump’s Speech (4:00 pm GMT)

What can we expect from DXY today?

After falling for four consecutive weeks which is a sign of a resilient labour market, unemployment claims in the U.S. surged higher from 203K last week as 217K claims were filed. These latest figures also exceeded the forecast of 210K as well as the 4-week average of 212K. Claims are now forecasted to increase for the second successive week and an elevated reading could dampen demand for the dollar. In addition, President Donald Trump will be delivering his speech at the World Economic Forum Annual Meetings via satellite and his remarks could inject higher volatility for financial markets later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities, and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Unemployment Claims (1:30 pm GMT)

President Trump’s Speech (4:00 pm GMT)

What can we expect from Gold today?

After falling for four consecutive weeks which is a sign of a resilient labour market, unemployment claims in the U.S. surged higher from 203K last week as 217K claims were filed. These latest figures also exceeded the forecast of 210K as well as the 4-week average of 212K. Claims are now forecasted to increase for the second successive week and an elevated reading could dampen demand for the dollar. In addition, President Donald Trump will be delivering his speech at the World Economic Forum Annual Meetings via satellite and his remarks could inject higher volatility for financial markets later today.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After coming within a whisker of the 0.6300 threshold on Wednesday, the Aussie fizzled out to edge lower. This currency pair pulled back towards 0.6260 at the beginning of the Asia session.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 18 February 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Despite Wednesday’s ‘soft’ CPI result, the Kiwi appreciated as it hit an overnight high of 0.5687. However, this currency pair ran out of steam as Asian markets came online and drifted lower towards 0.5650.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some service sectors have continued to grow.
• Consistent with feedback from business visits, high-frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Renewed demand for the greenback lifted USD/JPY from Wednesday’s low of 155.54 as it surged strongly above the 156 level. This currency pair hit an overnight high of 156.70 before pulling back slightly at the beginning of the Asia session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 December, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned; inflation expectations have risen moderately.
• With regard to the CPI (all items less fresh food), while the effects of the pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 24 January 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro hit a high of 1.0457 before pulling away from this level. This currency pair continued sliding lower as Asian markets came online, drifting towards the 1.0400 level.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 30 January 2025.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Weakness in the U.S. dollar has kept USD/CHF depressed this week. This currency pair dropped as low as 0.9032 on Wednesday before retracing higher towards 0.9060 at the beginning of the Asia session.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable climbed to a high of 1.2376 on Wednesday before retreating away from this level. This currency pair was hovering around 1.2320 as Asian markets came online.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 6 February 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (1:30 pm GMT)

What can we expect from CAD today?

Consumer spending in Canada has been robust from July through October but estimates point to a small rise in November. Retail sales are expected to increase just 0.2% MoM despite the Black Friday sales that took place during that month. Should sales disappoint market expectations, the Loonie will likely depreciate further.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (5:00 pm GMT)

What can we expect from Oil today?

After declining for five straight weeks, the API stockpiles added 1M barrels of crude to storage. Combined with President Donald Trump’s plan to expand U.S. oil and gas production, this commodity has faced challenging headwinds this week. WTI oil has dropped over 3.2% this week alone, hitting a low of $75.05 per barrel. With EIA inventories scheduled for release later today, oil prices could be pressured once more should this agency also report an inventory build.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 23 January 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 107.56

Supporting reasons: Identified as an overlap support that aligns close to the 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 105.43
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 109.50
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 1.0462

Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential area where selling pressures could intensify

1st support: 1.0346

Supporting reasons: Identified as an overlap support that aligns with the 61.8% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 1.0540
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 162.16

Supporting reasons: Identified as a pullback support, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 160.10

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 163.80
Supporting reasons: Identified as an overlap resistance that aligns with the 127.20% Fibonacci extension and the 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 0.8463
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 0.8409

Supporting reasons:  Identified as an overlap support that aligns close to the 23.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 0.8517
Supporting reasons: Identified as a resistance that aligns with the 61.8% Fibonacci projection, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation towards the 1st resistance.

Pivot: 1.2241

Supporting reasons: Identified as an overlap support, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 1.2099

Supporting reasons: Identified as a swing low support level, indicating a potential level where price could stabilize once more.

1st resistance: 1.2480
Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 194.12

Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 190.64
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 197.16
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 0.9089
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify

1st support: 0.9009
Supporting reasons: Identified as an overlap support that aligns with the 38.2% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential level where price could find support once again.

1st resistance: 0.9181
Supporting reasons: Identified as a multi swing high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 156.58
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify

1st support: 154.47
Supporting reasons: Identified as a pullback support that aligns close to the 38.2% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 158.55
Supporting reasons: Identified as a multi swing high resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 1.4398

Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 1.4299
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4476
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6292

Supporting reasons: Identified as a multi-swing-high resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 0.6138
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6445
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5686

Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential level where selling pressures could intensify. 

1st support: 0.5574
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5763
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 44,082.42

Supporting reasons: Identified as a pullback resistance, indicating a potential level where selling pressures could intensify.

1st support: 43,455.67

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 44,527.60

Supporting reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 21,026.90
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 20,498.00

Supporting reasons: Identified as a pullback support that aligns close to a 61.8% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 21,351.51
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price has made a bearish reversal off the pivot and could potentially pull back towards the 1st support.

Pivot: 6,099.60
Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% Fibonacci extension, indicating a potential level where selling pressures could intensify.

1st support: 6,039.40

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 6,174.50

Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 100,701.78

Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 95,398.08
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 105,023.88
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 3,198.44

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 3,028.93
Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 3,528.21
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 77.71
Supporting reasons: Identified as an overlap resistance, indicating a potential level where selling pressures could intensify. The price is also trading within a downward channel which highlights the ongoing bearish momentum.

1st support: 75.05
Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement, indicating a key level where the price could stabilize.

1st resistance: 79.12
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 2,758.05
Supporting reasons: Identified as an overlap resistance that aligns with the 127.20% Fibonacci extension and the 100% Fibonacci projection, indicating a potential area where selling pressures could intensify

1st support: 2,719.55

Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again.

1st resistance: 2,788.56

Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

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The post Thursday 23rd January 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 23 January 2025

What happened in the U.S. session?

In line with market estimates, the Conference Board Leading Economic Index (LEI) decreased 0.1% MoM in December as it failed to sustain November’s increase of 0.4%. Factors such as low consumer confidence about future business conditions, relatively weak manufacturing orders, an increase in initial claims for unemployment, and a decline in building permits contributed to the decline. Despite the weak data point, the dollar index (DXY) stabilized around 107.90 before rising above the 180 level as the greenback saw a renewed demand overnight.

What does it mean for the Asia Session?

The DXY edged higher towards 108.50 while spot prices for gold drifted lower towards $2,750/oz at the beginning of this session; a trend that could continue for the initial part of the day. Meanwhile, crude oil prices remained pressured with WTI oil sliding towards $75 per barrel.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (1:30 pm GMT)

President Trump’s Speech (4:00 pm GMT)

What can we expect from DXY today?

After falling for four consecutive weeks which is a sign of a resilient labour market, unemployment claims in the U.S. surged higher from 203K last week as 217K claims were filed. These latest figures also exceeded the forecast of 210K as well as the 4-week average of 212K. Claims are now forecasted to increase for the second successive week and an elevated reading could dampen demand for the dollar. In addition, President Donald Trump will be delivering his speech at the World Economic Forum Annual Meetings via satellite and his remarks could inject higher volatility for financial markets later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities, and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Unemployment Claims (1:30 pm GMT)

President Trump’s Speech (4:00 pm GMT)

What can we expect from Gold today?

After falling for four consecutive weeks which is a sign of a resilient labour market, unemployment claims in the U.S. surged higher from 203K last week as 217K claims were filed. These latest figures also exceeded the forecast of 210K as well as the 4-week average of 212K. Claims are now forecasted to increase for the second successive week and an elevated reading could dampen demand for the dollar. In addition, President Donald Trump will be delivering his speech at the World Economic Forum Annual Meetings via satellite and his remarks could inject higher volatility for financial markets later today.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After coming within a whisker of the 0.6300 threshold on Wednesday, the Aussie fizzled out to edge lower. This currency pair pulled back towards 0.6260 at the beginning of the Asia session.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 18 February 2025.

Next 24 Hours Bias

Weak Bearish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Despite Wednesday’s ‘soft’ CPI result, the Kiwi appreciated as it hit an overnight high of 0.5687. However, this currency pair ran out of steam as Asian markets came online and drifted lower towards 0.5650.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some service sectors have continued to grow.
• Consistent with feedback from business visits, high-frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Weak Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Renewed demand for the greenback lifted USD/JPY from Wednesday’s low of 155.54 as it surged strongly above the 156 level. This currency pair hit an overnight high of 156.70 before pulling back slightly at the beginning of the Asia session.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 December, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned; inflation expectations have risen moderately.
• With regard to the CPI (all items less fresh food), while the effects of the pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 24 January 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The Euro hit a high of 1.0457 before pulling away from this level. This currency pair continued sliding lower as Asian markets came online, drifting towards the 1.0400 level.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 30 January 2025.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Weakness in the U.S. dollar has kept USD/CHF depressed this week. This currency pair dropped as low as 0.9032 on Wednesday before retracing higher towards 0.9060 at the beginning of the Asia session.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable climbed to a high of 1.2376 on Wednesday before retreating away from this level. This currency pair was hovering around 1.2320 as Asian markets came online.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 6 February 2025.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

Retail Sales (1:30 pm GMT)

What can we expect from CAD today?

Consumer spending in Canada has been robust from July through October but estimates point to a small rise in November. Retail sales are expected to increase just 0.2% MoM despite the Black Friday sales that took place during that month. Should sales disappoint market expectations, the Loonie will likely depreciate further.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Medium Bullish

Oil

Key news events today

EIA Crude Oil Inventories (5:00 pm GMT)

What can we expect from Oil today?

After declining for five straight weeks, the API stockpiles added 1M barrels of crude to storage. Combined with President Donald Trump’s plan to expand U.S. oil and gas production, this commodity has faced challenging headwinds this week. WTI oil has dropped over 3.2% this week alone, hitting a low of $75.05 per barrel. With EIA inventories scheduled for release later today, oil prices could be pressured once more should this agency also report an inventory build.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 23 January 2025 first appeared on IC Markets | Official Blog.

US Markets Push Higher Again – S&P up 0.6%

US stocks advanced again in trading yesterday, buoyed by news of a significant AI investment plan from the new government and strong earnings reports, which propelled the S&P 500 to fresh record levels. The Dow closed the day up 0.30%, the S&P 500 gained 0.61%, and the Nasdaq rose by 1.28%. The US dollar regained some of its recent losses against major currencies, with the DXY rising by 0.25% to 108.26. Treasury yields also moved higher, with the 2-year adding 2.3 basis points to reach 4.298% and the 10-year climbing 3.5 basis points to 4.611%.

Oil prices fell further, with Brent crude dropping 0.38% to $78.91 and WTI declining 0.48% to $75.38. Meanwhile, gold prices moved higher again, gaining 0.41% on the day to close at $2,755.38.

Central Banks Coming into Trader Focus in FX

As expected, FX market movements this week have been largely influenced by updates from Donald Trump and his new team in the White House. However, traders are now refocusing on underlying fundamentals as several key central bank rate announcements are scheduled over the next week. Rate adjustments are anticipated, potentially providing longer-term traders with opportunities as interest rate differentials come into play.

The Bank of Japan is first up on Friday, with markets pricing in an 80% probability of a rate rise. This will be followed next week by key updates from the Bank of Canada, the European Central Bank, and the Federal Reserve. While the FOMC is less likely to adjust rates, there is a strong chance of action from the other central banks, which could result in significant movements in their respective currencies.

Calm Before the Volatility Storm Again Today

Today is expected to begin with calm, range-bound trading conditions due to a relatively light macroeconomic calendar during the first two sessions. However, this tranquillity may give way to increased volatility later in the day, particularly with the New York market open.

Early in the session, key Canadian retail sales data (expected to show a 0.2% month-on-month increase) and the usual weekly US unemployment claims figures are set to be released. Later, President Trump is scheduled to address the World Economic Forum in Davos via satellite, which is likely to dominate market sentiment. Additionally, the release of US crude oil inventory data is expected around the same time, though Trump’s commentary is anticipated to take centre stage.

The post General Market Analysis – 23/01/24 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 23/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 1.72%, Shanghai Composite down 1.15%, Hang Seng down 1.5% ASX up 0.33%
• Commodities : Gold at $2769.35 (0.26%), Silver at $31.5 (0.8%), Brent Oil at $79.29 (-0.19%), WTI Oil at $75.74 (-0.03%)
• Rates : US 10-year yield at 4.586, UK 10-year yield at 4.5885, Germany 10-year yield at 2.4770

News & Data:

• (CAD) CPI m/m  -0.4% vs -0.7% expected
• (CAD) Median CPI m/m  2.4% vs 2.5% expected
• (CAD) Trimmed CPI m/m  2.5% vs 2.5% expected

Markets Update:

Asia-Pacific markets showed mixed performance on Wednesday as Chinese stocks declined following President Donald Trump’s remarks about imposing a 10% tariff on China. Australia’s S&P/ASX 200 gained 0.26%, while Japan’s Nikkei 225 and Topix rose 1.36% and 0.87%, respectively. South Korea’s Kospi surged 3.67%, and the Kosdaq climbed 0.93%. Several Korean tech stocks rallied, with SK Hynix up 2.52% and LG Electronics rising 2.85%, following reports that Korean firms are considering relocating production from Mexico to the U.S. in response to Trump’s protectionist policies.

Meanwhile, Hong Kong’s Hang Seng index dropped 1.34%, and mainland China’s CSI 300 fell 0.85% after Trump stated that a 10% tariff on China could take effect as early as February 1. In India, the Nifty 50 rebounded 0.28% after hitting its lowest level since June, while the BSE Sensex rose 0.46%. Investors are also focused on Malaysia’s central bank meeting, where the Bank Negara Malaysia is expected to keep its policy rate steady at 3%.

In the U.S., stock markets ended higher as investors interpreted Trump’s trade comments as slightly softer than anticipated. The Dow Jones Industrial Average surged 537.98 points (1.24%) to close at 44,025.81, while the S&P 500 gained 0.88% to finish at 6,049.24. The Nasdaq Composite rose 0.64% to 19,756.78, reflecting investor optimism despite ongoing trade concerns.

Trump also suggested imposing a 25% tariff on Mexico and Canada starting February 1 due to border issues. Additionally, he hinted at potential tariffs on China if the country does not approve a TikTok deal. These developments continue to shape market sentiment and global trade expectations.

Upcoming Events: 

• 01:30 PM GMT – CAD IPPI m/m
• 01:30 PM GMT – CAD RMPI m/m

The post Wednesday 22nd January 2025: Asia-Pacific Markets Mixed as Trump Signals New Tariffs on China first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 22 January 2025

What happened in the Asia session?

New Zealand released its fourth quarter consumer inflation figures for 2024 where headline CPI moderated lower from 0.6% in the previous quarter to 0.5%, coming in line with market estimates. Main upward pressure came from categories such as miscellaneous goods and services; recreation and culture; and transport. At an annualised rate, inflation moderated to 2.2% YoY in the fourth quarter, inching closer to the midpoint of the RBNZ’s 1 to 3% target band. With inflationary pressures continuing to dissipate, the Kiwi is likely to see further depreciation in the near-term.

What does it mean for the Europe & US sessions?

Following Tuesday’s better-than-expected ZEW Economic Sentiment for the Euro Area and waning demand for the dollar, the Euro received a timely boost as it broke above 1.0400 to hit an overnight high of 1.0435. However, this currency pair could face further volatility during ECB President Christine Lagarde’s speech at the World Economic Forum Annual Meetings in Davos. Her speech is titled “Beyond Crisis: Unlocking Europe’s Potential” and any significant remarks on future monetary policy action could impact the Euro later today.

Moving over to U.S. inventories, the API crude oil stockpiles have declined over the past five weeks but the drawdowns have not been as large as originally anticipated. Should these stockpiles experience another week of smaller drawdowns or even worse, register an inventory build, overhead pressures for oil prices are likely to intensify once again.

The Dollar Index (DXY)

Key news events today

Conference Board LEI (3:00 pm GMT)

What can we expect from DXY today?

After increasing for the first time in over two years in November 2024, the Conference Board’s (CB) Leading Economic Index (LEI) is not anticipated to edge lower in December to resume the downward momentum for this index. A rebound in building permits, continued support from equities, improvement in average hours worked in manufacturing, and fewer initial unemployment claims boosted the LEI in November but all of that now looks to be undone in the latest result. Should the LEI fall more than anticipated, it could sap demand for the greenback later today.

Central Bank Notes:

• The Board of Governors of the Federal Reserve System voted by a majority to lower the Federal Funds Rate target range by 25 basis points to 4.25 to 4.50% on 18 December. Voting against the action was Beth M. Hammack, who preferred to maintain the target range at 4.5 to 4.75%.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals are roughly in balance.
• The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while labour market conditions have generally eased, and the unemployment rate has moved up but remains low.
• Inflation has made further progress toward the Committee’s 2% objective but remains somewhat elevated.
• The Summary of Economic Projections (SEP) now indicates just two rate cuts in 2025 totalling 50 bps, compared to the full percentage point of reductions projected in the previous quarter.
• GDP growth forecasts were revised upward for 2024 (2.5% vs. 2% in the September projection) and 2025 (2.1% vs. 2%), while remaining steady at 2% for 2026. Similarly, PCE inflation projections have been adjusted higher for 2024 (2.4% vs. 2.3%), 2025 (2.5% vs. 2.1%), and 2026 (2.1% vs. 2%).
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities, and agency debt and agency mortgage-backed securities. Beginning in June, the Committee slowed the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• The next meeting runs from 28 to 29 January 2025.

Next 24 Hours Bias

Medium Bullish

Gold (XAU)

Key news events today

Conference Board LEI (3:00 pm GMT)

What can we expect from Gold today?

After increasing for the first time in over two years in November 2024, the Conference Board’s (CB) Leading Economic Index (LEI) is not anticipated to edge lower in December to resume the downward momentum for this index. A rebound in building permits, continued support from equities, improvement in average hours worked in manufacturing, and fewer initial unemployment claims boosted the LEI in November but all of that now looks to be undone in the latest result. Should the LEI fall more than anticipated, it could sap demand for the greenback later today and potentially lift gold prices.

Next 24 Hours Bias

Weak Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

After falling as low as 0.6215 on Tuesday, the Aussie reversed to rise strongly overnight. This currency pair climbed above 0.6270 and the upward momentum is likely to continue on Wednesday.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35% on 10 December, marking the ninth consecutive pause.
• Inflation has fallen substantially since the peak in 2022, as higher interest rates have been working to bring aggregate demand and supply closer towards balance. However, measures of underlying inflation are around 3.5%, which is still some way from the 2.5% midpoint of the inflation target.
• The most recent forecasts published in the November Statement on Monetary Policy (SMP) do not see inflation returning sustainably to the midpoint of the target until 2026 but the Board is gaining some confidence that inflationary pressures are declining in line with these recent forecasts with risks remaining in place.
• Growth in output has been weak as the economy grew by only 0.8% in the September quarter over the past year. Outside of the COVID-19 pandemic, this was the slowest pace of growth since the early 1990s.
• A range of indicators suggest that labour market conditions remain tight; while those conditions have been easing gradually, some indicators have recently stabilised. The unemployment rate was 4.1 per cent in October, up from 3.5 per cent in late 2022.
• Wage pressures have eased more than expected in the November SMP. The rate of wage growth as measured by the Wage Price Index was 3.5% over the year to the September quarter, a step down from the previous quarter, but labour productivity growth remains weak.
• Sustainably returning inflation to target within a reasonable timeframe remains the Board’s highest priority. This is consistent with the RBA’s mandate for price stability and full employment. To date, longer-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.
• The Board will continue to rely upon the data and the evolving assessment of risks to guide its decisions, paying close attention to developments in the global economy and financial markets, trends in domestic demand, and the outlook for inflation and the labour market.
• The next meeting is on 18 February 2025.

Next 24 Hours Bias

Medium Bearish

The Kiwi Dollar (NZD)

Key news events today

CPI (9:45 pm GMT 21st January)

What can we expect from NZD today?

New Zealand released its fourth quarter consumer inflation figures for 2024 where headline CPI moderated lower from 0.6% in the previous quarter to 0.5%, coming in line with market estimates. Main upward pressure came from categories such as miscellaneous goods and services; recreation and culture; and transport. At an annualised rate, inflation moderated to 2.2% YoY in the fourth quarter, inching closer to the midpoint of the RBNZ’s 1 to 3% target band. With inflationary pressures continuing to dissipate, the Kiwi is likely to see further depreciation in the near-term.

Central Bank Notes:

• The Monetary Policy Committee (MPC) agreed to reduce the Official Cash Rate (OCR) by 50 basis points bringing it down to 4.25% on 27 November, marking the third consecutive rate cut.
• The Committee assessed that annual consumer price inflation has declined and is now close to the midpoint of the MPC’s 1 to 3% target band; inflation expectations are also close to target and core inflation is converging to the midpoint.
• Economic activity remains subdued and output continues to be below its potential. With excess productive capacity in the economy, inflation pressures have eased. If economic conditions continue to evolve as projected, the Committee expects to be able to lower the OCR further early next year.
• Domestic economic activity remains below trend, as a result of weakness in demand for durable goods consumption and investment. This has been reflected in falling activity in interest rate sensitive sectors such as construction, manufacturing, and retail trade. In contrast, some service sectors have continued to grow.
• Consistent with feedback from business visits, high-frequency indicators suggest that the economy has stabilised in recent months. Economic growth is expected to recover from the December quarter, in part due to lower interest rates, but there is uncertainty around the exact timing and speed of the recovery.
• Wage growth is slowing, consistent with inflation returning to the target midpoint while employment levels and job vacancies have declined, reflecting subdued economic activity; unemployment is expected to continue rising in the near term.
• Expectations of future inflation, the pricing intentions of firms, and spare productive capacity are consistent with the inflation target being sustainably achieved, providing the context and the confidence for the Committee to ease monetary policy restraint further.
• The next meeting is on 19 February 2025.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

Demand for the yen remains robust as the Bank of Japan’s (BoJ) monetary policy announcement on Friday inches closer. USD/JPY briefly fell under 155 on Tuesday before recovering to retrace slightly higher. This currency pair was floating around 155.50 as Asian markets came online.

Central Bank Notes:

• The Policy Board of the Bank of Japan decided on 19 December, by an 8-1 majority vote, to set the following guidelines for money market operations for the inter-meeting period:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0.25%.
  2. The Bank will embark on a plan to reduce the amount of its monthly outright purchases of JGBs so that it will be about 3 trillion yen in January-March 2026; the amount will be cut down by about 400 billion yen each calendar quarter in principle.
• Japan’s economy has recovered moderately, although some weakness has been seen in part. Exports and industrial production have been more or less flat while corporate profits have been on an improving trend and business sentiment has stayed at a favourable level.
• The employment and income situation has improved moderately while private consumption has been on a moderately increasing trend despite the impact of price rises and other factors.
• On the price front, the year-on-year rate of increase in the consumer price index (CPI, all items less fresh food) has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a passthrough to consumer prices of cost increases led by the past rise in import prices have waned; inflation expectations have risen moderately.
• With regard to the CPI (all items less fresh food), while the effects of the pass-through to consumer prices of cost increases led by the past rise in import prices are expected to wane, underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• Japan’s economy is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• The next meeting is on 24 January 2025.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

ECB President Lagarde’s Speech (3:15 pm GMT)

What can we expect from EUR today?

Following Tuesday’s better-than-expected ZEW Economic Sentiment for the Euro Area and waning demand for the dollar, the Euro received a timely boost as it broke above 1.0400 to hit an overnight high of 1.0435. However, this currency pair could face further volatility during ECB President Christine Lagarde’s speech at the World Economic Forum Annual Meetings in Davos. Her speech is titled “Beyond Crisis: Unlocking Europe’s Potential” and any significant remarks on future monetary policy action could impact the Euro later today.

Central Bank Notes:

• The Governing Council reduced the three key ECB interest rates by 25 basis points on 12 December to mark the third successive rate cut.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 3.15%, 3.40% and 3.00% respectively.
• The disinflation process is well on track and most measures of underlying inflation suggest that inflation will settle at around the Governing Council’s 2% medium-term target on a sustained basis.
• Staff see headline inflation averaging 2.4% in 2024, 2.1% in 2025, 1.9% in 2026 and 2.1% in 2027 when the expanded EU Emissions Trading System becomes operational. For inflation excluding energy and food, staff project an average of 2.9% in 2024, 2.3% in 2025 and 1.9% in both 2026 and 2027.
• Staff now expect a slower economic recovery than in the September projections. Although growth picked up in the third quarter of this year, survey indicators suggest it has slowed in the current quarter – the economy is expected to grow by 0.7% in 2024, 1.1% in 2025, 1.4% in 2026 and 1.3% in 2027
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Governing Council stands ready to adjust all of its instruments within its mandate to ensure that inflation stabilises sustainably at its 2% target over the medium term and to preserve the smooth functioning of monetary policy transmission.
• The next meeting is on 30 January 2025.

Next 24 Hours Bias

Medium Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Waning demand for the greenback this week has convincingly driven USD/CHF under the threshold of 0.9100 on Tuesday. Strong headwinds have caused this currency pair to fall under 0.9050 at the beginning of the Asia session and it is likely to edge lower on Wednesday.

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 50 basis points, going from 1.00% to 0.50% on 12 December, marking the fourth consecutive reduction.
• Underlying inflationary pressure has decreased again this quarter.
• Inflation in the period since the last monetary policy assessment has again been lower than expected as it decreased from 1.1% in August to 0.7% in November; both goods and services contributed to this decline.
• In the shorter term, the new conditional inflation forecast is below that of September: 1.1% for 2024, 0.3% for 2025 and 0.8% for 2026, based on the assumption that the SNB policy rate is 0.5% over the entire forecast horizon.
• GDP growth in Switzerland was only modest in the third quarter of 2024 with growth in the services sector again somewhat stronger, while value added in manufacturing declined.
• There was a further slight increase in unemployment, and employment growth was subdued while the utilisation of overall production capacity was
• normal.
• The SNB anticipates GDP growth of around 1% this year while currently expecting growth of between 1.0% and 1.5% for 2025.
• The SNB will continue to monitor the situation closely and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
• The next meeting is on 20 March 2025.

Next 24 Hours Bias

Medium Bullish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable received a timely boost as waning demand for the greenback lifted this currency pair above the threshold of 1.2300. This upward momentum is likely to gain further traction and Cable could make a strong push towards the 1.2400 level.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 6 to 3 to maintain the Bank Rate at 4.75% on 19 December 2024 – three members preferred to reduce the Bank rate by 25 basis points, bringing it down to 4.50%.
• The MPC also voted unanimously to reduce the stock of UK government bond purchases held for monetary policy purposes and financed by the issuance of central bank reserves, by £100B over the next 12 months to a total of £558B, starting in October 2024. On 18 December 2024, the stock of UK government bonds held for monetary policy purposes was £655B.
• Twelve-month CPI inflation had increased to 2.6% in November from 1.7% in September, slightly higher than previous expectations while services consumer price inflation had remained elevated, at 5.0%, while core goods price inflation had risen to 1.1%.
• Headline CPI inflation was slightly higher than previous expectations, owing in large part to stronger inflation in core goods and food, and is expected to continue to rise slightly in the near term.
• Most indicators of UK near-term activity have declined with Bank staff expecting GDP growth to be weaker at the end of the year than originally projected in the November Monetary Policy Report.
• Bank staff now expected zero GDP growth in 2024 Q4, weaker than the 0.3% that had been incorporated in the November Report, broadly consistent with the latest combined steer from business surveys and the available official data.
• The Committee now judges that the labour market is broadly in balance as annual private sector regular average weekly earnings growth picked up quite sharply in the three months to October but there remains significant uncertainty around developments in the labour market.
• Monetary policy has been guided by the need to squeeze remaining inflationary pressures out of the economy to achieve the 2% target both in a timely manner and on a lasting basis. Over recent quarters there has been progress in disinflation, particularly as previous external shocks have abated, although remaining domestic inflationary pressures are resolving more slowly.
• The Committee continues to monitor closely the risks of inflation persistence and will assess the extent to which the evolving evidence is consistent with more constrained supply, which could sustain inflationary pressures, or with weaker demand, which could lead to the emergence of spare capacity in the economy and push down inflation; a gradual approach to removing monetary policy restraint remains appropriate.
• Monetary policy will need to continue to remain restrictive for sufficiently long until the risks to inflation returning sustainably to the 2% target in the medium term have dissipated further and the Committee will decide the appropriate degree of monetary policy restrictiveness at each meeting.
• The next meeting is on 6 February 2025.

Next 24 Hours Bias

Medium Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Sticky consumer inflation for the month of December spurred demand for the Loonie overnight as USD/CAD dived under 1.4400 to drop as low as 1.4312. Overhead pressures remain for this currency pair and it should continue to edge lower on Wednesday.

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 50 basis points bringing it down to 3.25% while continuing its policy of balance sheet normalization on 11 December; this marked the fifth consecutive meeting where rates were reduced.
• Canada’s economy grew by 1% in the third quarter, somewhat below the Bank’s October projection, and the fourth quarter also looks weaker than projected. Third-quarter GDP growth was pulled down by business investment, inventories and exports.
• The unemployment rate rose to 6.8% in November as employment continued to grow more slowly than the labour force while wage growth showed some signs of easing, but remains elevated relative to productivity.
• Headline CPI has declined significantly from 2.7% in June to 1.6% in September while shelter costs inflation remains elevated but has begun to ease; the preferred measures of core inflation are now below 2.5%.
• CPI inflation has been about 2% since the summer and is expected to average close to the 2% target over the next couple of years. Since October, the upward pressure on inflation from shelter and the downward pressure from goods prices have both moderated as expected.
• Looking ahead, the GST holiday will temporarily lower inflation but that will be unwound once the GST break ends. In addition, the possibility the incoming US administration will impose new tariffs on Canadian exports to the United States has increased uncertainty and clouded the economic outlook.
• With inflation around 2%, the economy in excess supply, and recent indicators tilted towards softer growth than projected, the Governing Council decided to reduce the policy rate by a further 50 basis points to support growth and keep inflation close to the middle of the 1-3% target range.
• The Governing Council has reduced the policy rate substantially since June and going forward, they will be evaluating the need for further reductions in the policy rate one decision at a time.
• The Bank is committed to maintaining price stability for Canadians by keeping inflation close to the 2% target.
• The next meeting is on 29 January 2025.

Next 24 Hours Bias

Strong Bullish

Oil

Key news events today

API Crude Oil Stock (9:30 pm GMT)

What can we expect from Oil today?

Following President Donald Trump’s announcement of expanding domestic oil and gas production by declaring a national emergency, oil prices have come under pressure with WTI oil falling nearly 3.5% since Monday. This benchmark fell sharply towards the $75 mark on Tuesday but it recovered overnight to climb above $76 per barrel. However, this commodity is likely to continue facing strong headwinds. Meanwhile, the API stockpiles have declined over the past five weeks but the drawdowns have not been as large as originally anticipated. Should these stockpiles experience another week of smaller drawdowns or even worse, register an inventory build, overhead pressures are likely to intensify once again.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 22 January 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off the pivot and rise towards the 1st resistance.

Pivot: 107.56

Supporting reasons: Identified as an overlap support that aligns close to the 50% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 105.43
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once more.

1st resistance: 109.50
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 1.0462

Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential area where selling pressures could intensify

1st support: 1.0346

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 1.0540
Supporting reasons:  Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 162.16

Supporting reasons: Identified as a swing high resistance that aligns with the 78.6% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 160.10

Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 163.80
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

EUR/GBP:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 0.8463
Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 0.8409

Supporting reasons:  Identified as an overlap support that aligns close to the 23.6% Fibonacci retracement, indicating a potential level where price could find support once again.

1st resistance: 0.8517
Supporting reasons: Identified as a resistance that aligns with the 61.8% Fibonacci projection, indicating a potential area that could halt any further upward movement.

GBP/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price could potentially make a bullish continuation towards the 1st resistance.

Pivot: 1.2241

Supporting reasons: Identified as an overlap support, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 1.2099

Supporting reasons: Identified as a swing low support level, indicating a potential level where price could stabilize once more.

1st resistance: 1.2480
Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 194.12

Supporting reasons: Identified as a pullback resistance that aligns close to the 50% Fibonacci retracement, indicating a potential area where selling pressures could intensify

1st support: 190.64
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support.

1st resistance: 197.16
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

USD/CHF:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 0.9089
Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify

1st support: 0.9009
Supporting reasons: Identified as an overlap support that aligns with the 38.2% Fibonacci retracement and the 100% Fibonacci projection, indicating a potential level where price could find support once again.

1st resistance: 0.9181
Supporting reasons: Identified as a multi swing high resistance, indicating a potential area that could halt any further upward movement.

USD/JPY:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish continuation towards the 1st support.

Pivot: 156.58
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify

1st support: 154.47
Supporting reasons: Identified as a pullback support that aligns close to the 38.2% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 158.55
Supporting reasons: Identified as a multi swing high resistance, indicating a potential area that could halt any further upward movement.

USD/CAD:

Potential Direction: Bullish

Overall momentum of the chart: Neutral

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 1.4299

Supporting reasons: Identified as a multi-wing-low support that aligns close to a 100% Fibonacci projection, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 1.4178
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4398
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6292

Supporting reasons: Identified as a multi-swing-high resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 0.6138
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6445
Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5686

Supporting reasons: Identified as a multi-swing-high resistance, indicating a potential level where selling pressures could intensify. 

1st support: 0.5574
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5763
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 44,082.42

Supporting reasons: Identified as a pullback resistance, indicating a potential level where selling pressures could intensify.

1st support: 43,455.67

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 44,527.60

Supporting reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 21,026.90
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 20,498.00

Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 21,351.51
Supporting reasons: Identified as a resistance that aligns with a 100% Fibonacci projection, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 6,099.60
Supporting reasons: Identified as a swing-high resistance that aligns close to a 127.2% Fibonacci extension, indicating a potential level where selling pressures could intensify.

1st support: 6,039.40

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 6,174.50

Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 105,023.88

Supporting reasons: Identified as an overlap support, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 100,701.78
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once more.

1st resistance: 112,139.09
Supporting reasons: Identified as a resistance that aligns with a 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 3,198.44

Supporting reasons: Identified as a multi-swing-low support that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where buying interests could pick up to stage a rebound.

1st support: 3,028.93
Supporting reasons: Identified as a multi-swing-low support that aligns with a 78.6% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 3,528.21
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price has made a bearish reversal off the pivot and could potentially fall towards the 1st support.

Pivot: 77.71
Supporting reasons: Identified as an overlap resistance, indicating a potential level where selling pressures could intensify. The price is also trading within a downward channel which highlights the ongoing bearish momentum.

1st support: 75.05
Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement, indicating a key level where the price could stabilize.

1st resistance: 79.12
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish

Overall momentum of the chart: Bullish

Price could potentially make a bearish reversal off the pivot to fall towards the 1st support.

Pivot: 2,758.05
Supporting reasons: Identified as an overlap resistance that aligns with the 127.20% Fibonacci extension and the 100% Fibonacci projection, indicating a potential area where selling pressures could intensify

1st support: 2,719.55

Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once again.

1st resistance: 2,788.56

Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

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The post Wednesday 22nd January 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.