IC Markets Asia Fundamental Forecast | 22 January 2025

What happened in the U.S. session?

Consumer inflation in Canada was mixed in December as median CPI eased from 2.6% to 2.4% YoY, coming under the estimate of 2.5%, but common CPI remained unchanged at 2.0% YoY, exceeding the forecast of 1.9%. In addition, headline CPI dropped less than originally anticipated falling 0.4% MoM compared to a larger expected decline of 0.7%. The sticky inflation results spurred demand for the Loonie overnight as USD/CAD dived under 1.4400 to drop as low as 1.4312.

What does it mean for the Asia Session?

New Zealand will release its fourth quarter consumer inflation figures for 2024 at 9:45 pm GMT on Tuesday. Inflationary pressures have dissipated significantly since the third quarter of 2023, paving the way for the RBNZ to move ahead with three successive rate cuts in 2024, bringing the Official Cash Rate down from 5.5% to 4.25% last November. The Kiwi depreciated nearly 11.5% in 2024, making it one of the worst-performing major currency pairs and should inflation cool further in the latest result, it could trigger another round of intense selling in the Kiwi.

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 will release its fourth quarter consumer inflation figures for 2024 at 9:45 pm GMT on Tuesday. Inflationary pressures have dissipated significantly since the third quarter of 2023, paving the way for the RBNZ to move ahead with three successive rate cuts in 2024, bringing the Official Cash Rate down from 5.5% to 4.25% last November. The Kiwi depreciated nearly 11.5% in 2024, making it one of the worst-performing major currency pairs and should inflation cool further in the latest result, it could trigger another round of intense selling in the Kiwi.

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 Asia Fundamental Forecast | 22 January 2025 first appeared on IC Markets | Official Blog.

US Markets Rally on First Day Under Trump – Dow Up 1.2%

US stocks rallied on their first day of trading under the new government as investors digested a plethora of executive orders and updates. The Dow led the way, finishing the session up 1.24%, followed by the S&P and Nasdaq, which closed up 0.88% and 0.64% respectively. The dollar finished the day close to flat but experienced some sharp moves, particularly against the CAD and MXN, after Trump advised that tariffs would proceed but did not provide much detail. Treasury yields drifted lower, with the 2-year yield down 0.9 basis points to 4.274% and the 10-year off by 5.1 basis points to 4.576%. Oil prices took another hit after Trump declared a national energy emergency, with Brent down 0.95% to $79.35 and WTI down 1.90% to $75.92. Meanwhile, haven buyers piled into gold, pushing it to levels not seen since early November prior to the US election, with the precious metal jumping 1.25% to $2,742.47.

Gold in Favour Again in Uncertain Times

Gold prices surged to new multi-month highs overnight as investors continued to process fresh updates from Donald Trump and his new administration. The uncertainty surrounding certain policies, particularly tariffs, drove haven flows into the precious metal. Traders are expecting more volatility in the coming days, with confirmation of plans likely leading to dollar buying and gold selling, while continued uncertainty could challenge all-time highs. The market broke through key trendline resistance last night, technically opening the way to reach the $2,790.15 level. However, most traders believe another catalyst will be needed to make this jump. What seems more certain in the current environment is the likelihood of choppy trading ahead.

Quiet Calendar Day to Allow Investors to Analyse US Updates

The macroeconomic event calendar is relatively quiet today, providing investors with an opportunity to digest the substantial updates and information released by the new US government and President over the past few days. New Zealand’s Quarterly CPI data has already printed in line with expectations, but no significant events are scheduled for the rest of the Asian session. Similarly, the European and New York sessions are devoid of major data releases. ECB President Christine Lagarde is set to speak at the WEF Annual Meetings in Davos, but most traders expect sentiment to remain dominated by developments from the US.

The post General Market Analysis – 22/01/24 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 22/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 0.28%, Shanghai Composite up 0.05%, Hang Seng up 1.05% ASX up 0.66%
• Commodities : Gold at $2743.35 (-0.06%), Silver at $31.25 (0.8%), Brent Oil at $80.09 (-0.19%), WTI Oil at $76.74 (0.43%)
• Rates : US 10-year yield at 4.548, UK 10-year yield at 4.658, Germany 10-year yield at 2.492

News & Data:

• (CHF) PPI m/m  0.0% vs 0.2% expected

Markets Update:

Asia-Pacific markets advanced on Tuesday as investors looked for clearer signals on U.S. President Donald Trump’s economic policies following his inauguration. Markets across the region saw moderate gains, with Australia’s S&P/ASX 200 rising 0.68%. Japan’s Nikkei 225 inched up 0.15%, while the Topix remained flat amid volatile trading. South Korea’s Kospi added 0.17%, though the Kosdaq slipped 0.32%. Meanwhile, Hong Kong’s Hang Seng Index surged 1.12%, leading the region, and China’s CSI300 Index reversed losses to climb 0.39%.

Investors are also focused on upcoming central bank meetings in Asia. Malaysia’s central bank is expected to keep its interest rate steady at 3% on Wednesday. Japan’s Bank of Japan is set to meet from January 23 to 24, with Governor Kazuo Ueda hinting at potential rate hikes. Singapore’s Monetary Authority will hold its policy meeting on Friday. These meetings could shape market sentiment in the coming days.

In the U.S., markets were closed in observance of Martin Luther King Jr. Day. However, stock futures moved higher after Trump’s inauguration, fueled by his promise of a “golden age” for the economy. He signed several executive orders but notably did not introduce any tariffs.

Following the inauguration, futures on the S&P 500 climbed 0.5%, Nasdaq 100 futures gained 0.6%, and Dow Jones Industrial Average futures advanced 221 points (0.5%). Global investors now await further policy announcements that could impact financial markets.

Upcoming Events: 

• 01:30 PM GMT – CAD CPI m/m
• 01:30 PM GMT – CAD Median CPI m/m
• 01:30 PM GMT – CAD Trimmed CPI m/m

The post Tuesday 21st January 2025: Asia-Pacific Markets Gain as Investors Await U.S. Policy Clarity first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 21 January 2025

What happened in the Asia session?

With no major news events during this session, the dollar index (DXY) hit a high of 108.75 before fizzling out to fall under 108.50 while spot prices for gold broke above $2,720/oz for the first time since mid-December. Meanwhile, WTI oil stabilized around $76 per barrel before edging higher towards the $77 mark.

What does it mean for the Europe & US sessions?

The U.K.’s labour market report is expected to show a large jump in the claimant count change, rising from just 300 in November to an estimated 10.3K while the unemployment rate is anticipated to remain unchanged at 4.3% for December. Should claims exceed this estimate by a wide margin, overhead pressures for the pound will likely intensify.

Economic outlook and sentiment in the Euro Area have been depressed since August 2024 as reported by the ZEW Economic Sentiment. December’s reading of 17 pointed to marginal improvement at the end of the year, driven by heightened expectations of investment-friendly policies, alongside prospects of lower interest rates and stable inflation. Market forecasts point to a somewhat unchanged reading of 16.9 for January and the grim outlook will likely weigh on the Euro.

Consumer inflation in Canada has moderated significantly lower over the past 12 months with headline CPI easing to an annual rate of 1.9% in November while the core reading slowed to 1.6%. The various estimates for headline, median, trimmed and common CPI all point to further dissipation of inflationary pressures, results that would place downward pressure on the Loonie and keep USD/CAD elevated.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

After registering its first decline in seven weeks last Friday, the dollar bulls could return in full force following President Donald Trump’s return to the White House. This second presidency will likely see a slew of executive orders aimed at onshoring global supply chains and bolstering domestic manufacturing capabilities, acting as strong tailwinds for the dollar.

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

No major news events.

What can we expect from Gold today?

After registering its first decline in seven weeks last Friday, the dollar bulls could return in full force following President Donald Trump’s return to the White House. This second presidency will likely see a slew of executive orders aimed at onshoring global supply chains and bolstering domestic manufacturing capabilities, acting as strong tailwinds for the dollar and potentially increasing volatility for this precious metal.

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?

The Aussie tumbled as low as 0.6208 following the return of President Donald Trump to the White House. This currency pair will likely remain under pressure to slide lower as the day progresses.

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

No major news events.

What can we expect from NZD today?

Following President Donald Trump’s announcement of various executive orders, the Kiwi reversed sharply to dive sharply towards 0.5600. This currency pair could continue to head south as the greenback sees renewed demand on Tuesday.

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?

With market expectations for an interest rate hike increasing at the upcoming monetary policy announcement by the Bank of Japan (BoJ) on Friday, the yen has appreciated since mid-January causing USD/JPY to decline 2% over this period. This currency pair was hovering around 155.70 as Asian markets came online but overhead pressures remain.

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

ZEW Economic Sentiment (10:00 am GMT)

What can we expect from EUR today?

Economic outlook and sentiment in the Euro Area have been depressed since August 2024 as reported by the ZEW Economic Sentiment. December’s reading of 17 pointed to marginal improvement at the end of the year, driven by heightened expectations of investment-friendly policies, alongside prospects of lower interest rates and stable inflation. Market forecasts point to a somewhat unchanged reading of 16.9 for January and the grim outlook will likely weigh on the Euro.

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?

The franc appreciated strongly on Monday driving USD/CHF towards 0.9060. This currency pair gapped lower to open at 0.9051 on Tuesday but renewed demand for the greenback saw USD/CHF surging towards the threshold of 0.9100.

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

Labour Market Report (7:00 am GMT)

What can we expect from GBP today?

The labour market report is expected to show a large jump in the claimant count change, rising from just 300 in November to an estimated 10.3K while the unemployment rate is anticipated to remain unchanged at 4.3% for December. Should claims exceed this estimate by a wide margin, overhead pressures for the pound will likely intensify.

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

CPI (1:30 pm GMT)

What can we expect from CAD today?

Consumer inflation in Canada has moderated significantly lower over the past 12 months with headline CPI easing to an annual rate of 1.9% in November while the core reading slowed to 1.6%. The various estimates for headline, median, trimmed and common CPI all point to further dissipation of inflationary pressures, results that would place downward pressure on the Loonie and keep USD/CAD elevated.

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

No major news events.

What can we expect from Oil today?

After his swearing-in ceremony, President Donald Trump announced a series of executive orders aimed at expanding U.S. influence, restricting immigration, increasing fossil fuel production, and scaling back environmental regulations. Oil prices continued to slide lower as President Trump announced a plan to maximise U.S. oil and gas production by declaring a national emergency. WTI oil tumbled under $76 per barrel this morning, shedding over 4% since last Thursday

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 21 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: 110.07
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

EUR/USD:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

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

Pivot: 1.0346

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

1st support: 1.0193

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

1st resistance: 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 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 bounce off the pivot and rise 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: Bullish
Overall momentum of the chart: Bearish

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

Pivot: 190.32

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

1st support: 188.07
Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support.

1st resistance: 194.12
Supporting reasons: Identified as a pullback resistance that aligns with the 50% Fibonacci retracement, 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 reversal off the pivot to fall 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: 1.4395

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

1st resistance: 1.4545
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.

AUD/USD:

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: 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 has made a bearish reversal off the pivot and could potentially 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: 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: 43,241.57

Supporting reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 42,569.24

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

1st resistance: 44,084.38

Supporting reasons: Identified as an overlap resistance, 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: 20,498.00
Supporting reasons: Identified as a pullback support that aligns with a 38.2% Fibonacci retracement, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 20,021.90

Supporting reasons: Identified as an overlap support that aligns close to a 78.6% 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: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 5,964.20
Supporting reasons: Identified as an overlap support, indicating a potential level where buying interests could pick up to resume the uptrend.

1st support: 5,866.80

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

1st resistance: 6,099.60

Supporting reasons: Identified as a swing-high resistance that aligns close to the all-time high, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

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: 100,069.16

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 resume the uptrend.

1st support: 90,732.57
Supporting reasons: Identified as a multi-swing-low support, indicating a potential level where the price could stabilize once more.

1st resistance: 107,885.04
Supporting reasons: Identified as a multi-swing-high resistance that aligns close to the all-time high, 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, 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: Bullish
Overall momentum of the chart: Bullish

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

Pivot: 77.71
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement, indicating a potential level where buying interests could pick up to resume the uptrend.

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: 80.77
Supporting reasons: Identified as a swing-high 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: 2,719.28
Supporting reasons: Identified as a multi-swing high resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area where selling pressures could intensify

1st support: 2,662.00

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

1st resistance: 2,758.64

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

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The post Tuesday 21st January 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.

IC Markets Asia Fundamental Forecast | 21 January 2025

What happened in the U.S. session?

With U.S. banks and financial markets closed in observance of Martin Luther King Jr. Day, President Donald Trump’s inauguration for his second presidential term hogged the headlines overnight. After his swearing-in ceremony, President Trump announced a series of executive orders aimed at expanding U.S. influence, restricting immigration, increasing fossil fuel production, and scaling back environmental regulations. Although the stock markets were closed, U.S. equity futures climbed higher overnight while crude oil faced further overhead pressures.

What does it mean for the Asia Session?

As Asian markets digest President Trump’s initial slew of executive orders, the dollar index (DXY) gapped lower as it resumed trading on Tuesday. This index fell over 1.3% to open at 107.96 but it rose strongly to hit a high of 108.74, attempting to fill this gap. Meanwhile, oil prices continued to slide lower as President Trump announced a plan to maximise U.S. oil and gas production by declaring a national emergency. WTI oil tumbled under $76 per barrel this morning, shedding over 4% since last Thursday.

The Dollar Index (DXY)

Key news events today

No major news events.

What can we expect from DXY today?

After registering its first decline in seven weeks last Friday, the dollar bulls could return in full force following President Donald Trump’s return to the White House. This second presidency will likely see a slew of executive orders aimed at onshoring global supply chains and bolstering domestic manufacturing capabilities, acting as strong tailwinds for the dollar.

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

No major news events.

What can we expect from Gold today?

After registering its first decline in seven weeks last Friday, the dollar bulls could return in full force following President Donald Trump’s return to the White House. This second presidency will likely see a slew of executive orders aimed at onshoring global supply chains and bolstering domestic manufacturing capabilities, acting as strong tailwinds for the dollar and potentially increasing volatility for this precious metal.

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?

The Aussie tumbled as low as 0.6208 following the return of President Donald Trump to the White House. This currency pair will likely remain under pressure to slide lower as the day progresses.

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

No major news events.

What can we expect from NZD today?

Following President Donald Trump’s announcement of various executive orders, the Kiwi reversed sharply to dive sharply towards 0.5600. This currency pair could continue to head south as the greenback sees renewed demand on Tuesday.

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?

With market expectations for an interest rate hike increasing at the upcoming monetary policy announcement by the Bank of Japan (BoJ) on Friday, the yen has appreciated since mid-January causing USD/JPY to decline 2% over this period. This currency pair was hovering around 155.70 as Asian markets came online but overhead pressures remain.

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

ZEW Economic Sentiment (10:00 am GMT)

What can we expect from EUR today?

Economic outlook and sentiment in the Euro Area have been depressed since August 2024 as reported by the ZEW Economic Sentiment. December’s reading of 17 pointed to marginal improvement at the end of the year, driven by heightened expectations of investment-friendly policies, alongside prospects of lower interest rates and stable inflation. Market forecasts point to a somewhat unchanged reading of 16.9 for January and the grim outlook will likely weigh on the Euro.

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?

The franc appreciated strongly on Monday driving USD/CHF towards 0.9060. This currency pair gapped lower to open at 0.9051 on Tuesday but renewed demand for the greenback saw USD/CHF surging towards the threshold of 0.9100.

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

Labour Market Report (7:00 am GMT)

What can we expect from GBP today?

The labour market report is expected to show a large jump in the claimant count change, rising from just 300 in November to an estimated 10.3K while the unemployment rate is anticipated to remain unchanged at 4.3% for December. Should claims exceed this estimate by a wide margin, overhead pressures for the pound will likely intensify.

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

CPI (1:30 pm GMT)

What can we expect from CAD today?

Consumer inflation in Canada has moderated significantly lower over the past 12 months with headline CPI easing to an annual rate of 1.9% in November while the core reading slowed to 1.6%. The various estimates for headline, median, trimmed and common CPI all point to further dissipation of inflationary pressures, results that would place downward pressure on the Loonie and keep USD/CAD elevated.

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

No major news events.

What can we expect from Oil today?

After his swearing-in ceremony, President Donald Trump announced a series of executive orders aimed at expanding U.S. influence, restricting immigration, increasing fossil fuel production, and scaling back environmental regulations. Oil prices continued to slide lower as President Trump announced a plan to maximise U.S. oil and gas production by declaring a national emergency. WTI oil tumbled under $76 per barrel this morning, shedding over 4% since last Thursday

Next 24 Hours Bias

Medium Bearish

The post IC Markets Asia Fundamental Forecast | 21 January 2025 first appeared on IC Markets | Official Blog.

Dollar Hit on Trump’s First Day – USD Down Over 1%

As expected, markets experienced significant moves yesterday as Donald Trump was sworn in as the 47th President of the United States, despite local markets being closed for a bank holiday. The dollar suffered a substantial hit, and stock futures surged as tariffs were not at the forefront of the President’s initial announcements, raising hopes that implementation may be slower or more limited. The dollar weakened against all major currencies, with the DXY losing 1.23% on the day. However, it remains volatile, as traders remain cautious about further updates in the coming sessions.

Oil prices declined after Trump announced plans to ‘fill up’ the US strategic energy reserve, with Brent down 1.05% to $79.93 and WTI off 1.27% to $76.89 per barrel. Gold closed the day up marginally by 0.23% at $2,708.23, trading within a relatively tight range. Nonetheless, traders expect more significant movements as the week progresses.

Dollar in Focus as New US Administration Takes Control

The dollar faced a notable decline in overnight trading as Donald Trump entered the White House without providing a conclusive update on proposed trade tariffs. FX traders had witnessed the dollar gain nearly 5% on the DXY since Trump and the Republicans secured a resounding electoral victory in November, with the new administration promising substantial tariffs on several overseas markets. Many expected the President to confirm his ‘hard tariff’ stance during proceedings yesterday, which would have led to further dollar strength. However, this has not yet occurred, and major currencies have experienced relief rallies as a result.

Trump to Move Markets in the Sessions Ahead

Traders are bracing for increased volatility across financial markets today as the new US administration begins implementing its policies. In addition to the geopolitical impact on US markets, which will open for the first time today under the new government, several key macroeconomic data releases are expected from other jurisdictions.

While there is little scheduled in the Asian time zone, attention will shift to UK markets with the European open, as key employment data is due. The Claimant Count is anticipated to rise by 10k, with Average Earnings expected to jump to 5.6%, while the Unemployment Rate is forecast to remain steady at 4.3%.

With the return of US traders to their desks at the New York open, the focus will remain firmly on updates from the new government. Although Canadian CPI data is due earlier in the day, tariff-related commentary is expected to dominate market movements for the CAD, as has already been observed.

The post General Market Analysis – 21/01/25 first appeared on IC Markets | Official Blog.

The post Ex-Dividend 21/1/2025 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 1.26%, Shanghai Composite up 0.41%, Hang Seng up 2.5% ASX up 0.45%
• Commodities : Gold at $2747.35 (-0.06%), Silver at $31.25 (0.38%), Brent Oil at $80.69 (0.19%), WTI Oil at $77.4 (0.03%)
• Rates : US 10-year yield at 4.629, UK 10-year yield at 4.6555, Germany 10-year yield at 2.503

News & Data:

• (USD) Building Permits  1.48M vs 1.46M expected
• (USD) Housing Starts  1.50M vs 1.33M expected

Markets Update:

Asia-Pacific markets saw broad gains on Monday as investors awaited clarity on the policies of the incoming U.S. administration. Hong Kong’s Hang Seng Index surged 2.41%—its highest since Dec. 31—driven by consumer cyclicals and educational services. Mainland China’s CSI 300 rose 0.86% after the People’s Bank of China kept its benchmark lending rates unchanged, with the 1-year LPR at 3.1% and the 5-year at 3.6%. The offshore yuan strengthened slightly to 7.3345 per dollar, while the onshore yuan traded at 7.323.

Japan’s Nikkei 225 climbed 1.19%, while the Topix added 1.16%. South Korea’s Kospi dipped 0.18%, but the Kosdaq gained 0.48%. Australia’s S&P/ASX 200 advanced 0.46%. In Malaysia, December exports surged 16.9% year over year, far surpassing Reuters’ 8.8% forecast, while imports grew 11.9%. Hong Kong is set to release its unemployment figures later in the day.

Several Asian central banks are scheduled to meet this week. Malaysia’s central bank is expected to maintain its 3% policy rate on Wednesday. The Bank of Japan will hold its policy meeting from Jan. 23-24, with Governor Kazuo Ueda signaling a potential rate hike. Singapore’s Monetary Authority is set to convene on Friday.

In the U.S., major indices posted their first weekly gains of 2024. The Dow Jones rose 334.70 points, the S&P 500 gained 1%, and the Nasdaq advanced 1.51%. Meanwhile, Trump and Xi Jinping discussed trade, TikTok, and fentanyl on Friday, with Trump describing the talks as “very good.” U.S. markets will remain closed on Monday.

Upcoming Events: 

• 03:30 PM GMT – CAD BOC Business Outlook Survey

The post Monday 20th January 2025: Asia-Pacific Markets Gain Ahead of Trump’s Inauguration first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 20 January 2025

What happened in the Asia session?

With no major news events scheduled during this session, financial markets were relatively calm and they could continue to remain that way as we head into the latter part of what will be a short trading day.

What does it mean for the Europe & US sessions?

With U.S. banks and financial markets closed in observance of Martin Luther King Jr. Day on Monday, trading activity and volume are likely to taper off significantly following the end of the European trading hours.

The Dollar Index (DXY)

Key news events today

Martin Luther King Jr. Day (All Day)

What can we expect from DXY today?

With U.S. banks and financial markets closed in observance of Martin Luther King Jr. Day on Monday, trading activity and volume are likely to taper off significantly following the end of the European trading hours.

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 Bearish

Gold (XAU)

Key news events today

Martin Luther King Jr. Day (All Day)

What can we expect from Gold today?

With U.S. banks and financial markets closed in observance of Martin Luther King Jr. Day on Monday, trading activity and volume are likely to taper off significantly following the end of the European trading hours.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie rebounded 0.8% last week to gain nearly 50 pips as it closed at 0.6190 last Friday. This currency pair gapped slightly higher to open at 0.6196 and should edge higher as the day progresses.

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 Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

After falling for six straight weeks, the Kiwi found its footing around 0.5557 to jump as much as 1.9% before closing at 0.5580 last Friday. This currency pair gapped higher to open at 0.5591 and it could continue to grind higher.

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 Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

The yen has strengthened over the last week causing USD/JPY to tumble over 1.7% at its lowest point before closing at 156.25 on Friday. As markets reopened this morning, this currency pair slid lower towards the 156 level.

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 Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

After declining for five straight weeks, the Euro stabilized around 1.0228 to notch a weekly gain of 0.4% as it closed at 1.0270 on Friday. This currency pair remained lifted as markets re-opened on Monday and was rising towards the 1.0300 mark.

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 Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

The franc strengthened marginally to break a five-week streak of higher gains for the USD/CHF. After hitting a high of 0.9195 last week, this currency pair closed at 0.9139 on Friday.

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?

The pound was one of the worst-performing major currencies as Cable dived over 3.2% since the beginning of 2025. This currency pair found its footing around 1.2160 as markets re-opened this morning and it could edge higher as the day progresses.

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 Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

The Loonie remained under intense overhead pressures as USD/CAD rose 0.4% last week to close at 1.4476 on Friday. This currency pair gapped lower this morning to open at 1.4455 but it should remain elevated as the day progresses.

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

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Crude oil prices settled lower last Thursday and Friday but they managed to register a fourth successive week of higher gains as WTI oil closed at $77.39 per barrel. This benchmark rose nearly 2.2% last week to gain over 10% since the third week of December; it was hovering around $77.55 as markets reopened this morning.

Next 24 Hours Bias

Medium Bearish

The post IC Markets Europe Fundamental Forecast | 20 January 2025 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

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

Pivot: 109.59
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci projection, indicating a potential area where selling pressures could intensify.

1st support: 107.46
Supporting reasons: Identified as a pullback support, indicating a potential level where price could find support once more.

1st resistance: 111.96
Supporting reasons: Identified as a swing-high resistance that aligns with the 78.6% Fibonacci projection, 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: 1.0332
Supporting reasons: Identified as an overlap resistance that aligns with the 61.8% Fibonacci retracement,  indicating a potential area where selling pressures could intensify

1st support: 1.0175

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

1st resistance: 1.0464
Supporting reasons:  Identified as a pullback 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 reversal off the pivot to fall towards the 1st support.

Pivot: 161.48

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

1st support: 158.69

Supporting reasons: Identified as an overlap support that aligns with the 161.8% Fibonacci extension, indicating a potential level where price could find support.

1st resistance: 164.75
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: 0.8445
Supporting reasons: Identified as a swing high resistance, indicating a potential area where selling pressures could intensify

1st support: 0.8360

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 again.

1st resistance: 0.8512
Supporting reasons: Identified as a swing high resistance that aligns close to the 127.2% Fibonacci extension, indicating a potential area that could halt any further upward movement.

GBP/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: 1.2364
Supporting reasons: Identified as an overlap resistance that aligns with the 38.2% Fibonacci retracement, indicating a potential area where selling pressures could intensify.

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: 1.2531
Supporting reasons: Identified as an overlap resistance that aligns close to the 61.8% 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: 194.71
Supporting reasons: Identified as a pullback resistance,  indicating a potential area where selling pressures could intensify

1st support: 189.12
Supporting reasons: Identified as a swing low support, indicating a potential level where price could find support.

1st resistance: 199.64
Supporting reasons: Identified as a swing high 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 reversal off the pivot to fall towards the 1st support.

Pivot: 0.9195
Supporting reasons: Identified as a multi swing high resistance that aligns with the 78.6% Fibonacci extension,  indicating a potential area where selling pressures could intensify

1st support: 0.9016
Supporting reasons: Identified as an overlap support, indicating a potential level where price could find support once again.

1st resistance: 0.9284
Supporting reasons: Identified as a resistance that aligns with the 100% Fibonacci projection, 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 reversal off the pivot to fall towards the 1st support.

Pivot: 156.29
Supporting reasons: Identified as a pullback resistance,  indicating a potential area where selling pressures could intensify

1st support: 153.48
Supporting reasons: Identified as a pullback support that aligns close to the 50% Fibonacci retracement, indicating a potential level where price could find support once more.

1st resistance: 160.21
Supporting reasons: Identified as a pullback 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: 1.4447

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

1st support: 1.4323
Supporting reasons: Identified as a multi-swing-low support, indicating a key level where the price could stabilize once more.

1st resistance: 1.4602
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 rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6250

Supporting reasons: Identified as a pullback resistance that aligns close to a 61.8% Fibonacci retracement, indicating a potential level where selling pressures could intensify. The presence of the red Ichimoku Cloud and the bearish channel add further significance to the strength of the bearish momentum.

1st support: 0.6144
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once again.

1st resistance: 0.6301
Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% 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 rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.5653

Supporting reasons: Identified as a pullback resistance, indicating a potential level where selling pressures could intensify. The presence of the red Ichimoku Cloud adds further significance to the strength of the bearish momentum.

1st support: 0.5547
Supporting reasons: Identified as a swing-low support, suggesting a potential area where the price could stabilize once more.

1st resistance: 0.5758
Supporting reasons: Identified as an overlap resistance that aligns close to a 23.6% Fibonacci retracement, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

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: 43,330.76

Supporting reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement, indicating a potential level where selling pressures could intensify.

1st support: 41,777.16

Supporting reasons: Identified as a multi-swing-low support that aligns with a 50% Fibonacci retracement, indicating a potential level where the price could stabilize once again.

1st resistance: 44,327.75

Supporting reasons: Identified as a pullback resistance that aligns with 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 potentially make a bullish continuation to rise towards the 1st resistance.

Pivot: 20,427.00
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to resume the uptrend.

1st support: 19,670.10

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

1st resistance: 21,357.43
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: Neutral

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

Pivot: 6,041.80
Supporting reasons: Identified as an overlap resistance, indicating a potential level where selling pressures could intensify.

1st support: 5,820.50

Supporting reasons: Identified as a swing-low 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: Bearish
Overall momentum of the chart: Neutral

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

Pivot: 106,612.64

Supporting reasons: Identified as a swing-high that aligns close to the all-time high, indicating a potential level where selling pressures could intensify.

1st support: 91,742.32
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 125,920.84
Supporting reasons: Identified as a resistance that aligns with a 61.8% Fibonacci projection, 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: 2,920.51

Supporting reasons: Identified as an overlap 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: 2,223.09
Supporting reasons: Identified as a swing-low support, indicating a potential level where the price could stabilize once again.

1st resistance: 3,540.71
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: Bullish

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

Pivot: 80.90
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify.

1st support: 78.08
Supporting reasons: Identified as an overlap support that aligns close to a 23.6 Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 83.46
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 continuation towards the 1st support.

Pivot: 2717.-04
Supporting reasons: Identified as an overlap resistance  indicating a potential area where selling pressures could intensify

1st support: 2,633.49

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: 2,789.99

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 Monday 20th January 2025: Technical Outlook and Review first appeared on IC Markets | Official Blog.