January 5 foreign exchange market watch tide: EUR, GBP and JPY technical analysis
Currency: EUR/USD
Resistance 2: 1.0700
Resistance 1: 1.0650
Spot price: 1.0626
Support bit 1: 1.0550
Support bit 2: 1.0500
On Wednesday (January 5), the U.S. dollar index fell, and the euro rose 0.53% once morest the U.S. dollar to close at 1.0604, the best intraday hit was 1.0635. The minutes of the December meeting of the Federal Reserve Board of Governors on the same day provided no surprises or new information on the scale of the expected rate hike in February. The content of the minutes mainly showed that the Federal Reserve raised interest rates by 50 basis points last month, and Fed officials agreed to slow down the pace of interest rate hikes, which will allow them to continue to increase credit costs and control inflation in a gradual manner, aiming to limit risks to economic growth. Fed funds futures traders see a 67 percent chance the Fed will continue to slow the pace of rate hikes to 25 basis points in February. The weakening of the U.S. dollar temporarily held back the sharp drop in the euro in the previous trading day. Just from the daily chart, the EUR/USD exchange rate is still hovering around 1.06, the middle track of the Bollinger Band, but the technical indicators still fail to lift the downward trend. If the U.S. non-agricultural data is strong this Friday, we still need to be careful of the trend risk of further downward testing of the euro once morest the dollar.
Currency: GBP/USD
Resistance 2: 1.2200
Resistance 1: 1.2130
Spot price: 1.2055
Support bit 1: 1.2000
Support 2: 1.1950
On Wednesday (January 4), the pound rose 0.74% once morest the U.S. dollar, reaching an intraday high of 1.2087 and closing at 1.2055. GBP/USD’s losses in the previous session were a bit excessive and not particularly justified, driven by speculative flows in thin trade. On Wednesday, the dollar eased and the pound returned to a more realistic level as the minutes of the Federal Reserve’s December meeting released nothing new. But a gloomy mood over Britain’s economic outlook prevailed, with the British Chambers of Commerce (BCC) saying on Wednesday that British businesses were pessimistic regarding their outlook to 2023 as they faced the possibility of a surge in energy bills and continued post-Brexit financial crisis. Trade is difficult. Therefore, GBP/USD will not get any better positive factors to support its upward trend for the time being. From the perspective of technical graphics, on the daily level chart, GBP/USD has fallen below the middle track of the Bollinger Bands, and technical indicators tend to swing downward. If the exchange rate cannot return to above the 1.2130 level of the Bollinger Band, the pound will not be able to reverse its downward trend once morest the dollar in the short term, and once it falls below the 1.19-1.1880 support area, the downward retracement will increase. Only by breaking through the resistance levels of 1.2130 and 1.2180 above can it be expected to return to the upward trajectory.
Currency: USD/JPY
Resistance 2: 135.00
Resistance 1: 134.50
Spot price: 133.83
Support bit 1: 133.15
Support bit 2: 132.40
On Wednesday (January 4), although the minutes of the December meeting released by the Federal Reserve prompted the dollar to weaken, the dollar rebounded once morest the yen with the help of bargain hunting around 130.00, rebounding nearly 200 basis points within the day, the highest It touched 132.71 and last closed around 132.62. Then there will be US non-agricultural data coming out this Friday, and the quality of the data is expected to have a certain disturbance in the foreign exchange market. Observing from the daily chart, various technical indicators have entered a serious oversold state, and the bulls and shorts will see-saw fiercely between 130.00-135.00. If 130 falls completely, the USD/JPY will continue on the road of returning to the median value.But in the short term, we should mainly pay attention to the trend rhythm of the repeated rebound and consolidation of the dollar once morest the yen
Wang Gang, Guangdong Branch, Bank of China
Opinions are personal and do not represent those of the organization
