This week won’t feature the sort of hot and heavy data docket that we got last week. That will only continue next week when we get to the US CPI report, which arguably is still the most important data point for markets. As for the remainder of this week, the focus looks set to turn towards what Fed policymakers have to say instead.

It is now time to see what the others have to say after Powell said that a March move isn’t the base case. Will they follow up with a similar view? Or are we going to see a dance between more hawkish and dovish commentary? For today, here is the agenda as outlined by Adam earlier.

This article was written by Justin Low at www.forexlive.com.

According to Reuters, a quant hedge fund trader in southern China said that „our line was unplugged“. Adding that orders to sell stocks on the fund’s broking platform were rejected. In a similar case, a Shanghai-based quant fund manager said that they could not go through with sell orders today as the broker’s trading system would „decline orders“.

Adding to the story is a hedge fund manager in northern China claiming that his firm could tweak positions but wasn’t able to reduce holdings by much, due to „guidance“ by regulators. It isn’t clear how widespread this directive by Chinese authorities is and how many hedge funds are directly impacted as a result.

If we’re already reaching this point, it goes without saying how desperate the times are at the moment. I mean, to start targeting private funds? Sheesh.

There is no doubt that the exodus out of Chinese equities is looking really, really ugly. But this isn’t going to inspire much confidence, especially if local authorities are not taking the right steps to actually get to the root of the problem in China.

This article was written by Justin Low at www.forexlive.com.

• The Fed left interest rates unchanged as
  expected while dropping the tightening bias in the statement but adding a
  slight pushback against a March rate
  cut.
• Fed Chair Powell stressed
  that they want to see more evidence of inflation falling back to target and
  that a rate cut in March is not their base case.
• The latest US GDP beat
  expectations by a big margin.
• The US PCE came
  mostly in line with expectations with the Core 3-month and 6-month annualised
  rates falling below the Fed’s 2% target.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  surprised to the upside with the new orders index, which is considered a
  leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
  expectations across the board with the employment sub-index erasing the prior
  drop and prices paid jumping above 60.
• The US Consumer
  Confidence report came in line with expectations but
  the labour market details improved considerably.
• The market now expects the first rate cut in May.

CAD

• The BoC left interest rates unchanged at
  5.00% as expected and dropped the language about being prepared to hike if
  needed.
• The latest Canadian CPI beat expectations across the board with
  the underlying inflation measures remaining elevated, which should give the BoC
  a reason to wait for more data before considering rate cuts.
• On the labour market side, the latest report missed
  expectations although wage growth spiked to the highest level since 2021.
• The Canadian PMIs improved in
  January although they remain both in contractionary territory.
• The market expects the BoC to start
  cutting rates in May.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD bounced
on the 50% Fibonacci retracement level
and rallied all the way up to the recent high following the strong US NFP
report. The sellers stepped in around the high with a defined risk above it to
position for a drop into new lows. The buyers, on the other hand, will want to
see the price breaking higher to increase the bullish bets into the next resistance at
1.3620.

USDCAD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that from a risk
management perspective, the buyers will have a better risk to reward setup
around the 1.3460 level where we can find the confluence with the
50% Fibonacci retracement level and the 21 moving average. The
sellers, on the other hand, will want to see the price breaking below the
support zone to increase the bearish bets into the 1.3360 level.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is now right at the resistance. It will be interesting to see what
happens here in the US session as a break above the level should see the rally extending
to new highs while a strong rejection is likely to take us back to the 1.3460
level.

Upcoming Events

This week is basically empty on the data front with just
a couple of key economic releases on the agenda. On Thursday, we will see the
latest US Jobless Claims figures while on Friday we get the Canadian labour
market report.

This article was written by FL Contributors at www.forexlive.com.

The dollar is now trading more mixed but overall little changed against the rest of the major currencies bloc:

There are still a couple of key technical developments to be wary about this week though. So, while the moves today are light, it doesn’t mean that they don’t hold much significance.

1. EUR/USD broke below its 100-day moving average of 1.0783, eyes December low of 1.0723;
2. GBP/USD broke below its 200-day moving average of 1.2560, frees up space towards 1.2500;
3. USD/JPY contests the highs for the year near 148.80 amid post-NFP rebound in yields;
4. USD/CAD tests January high of 1.3541 with 100-day moving average of 1.3555 nearby;
5. AUD/USD hugs 0.6500 again post-RBA but could eye further downside after break of 100-day moving average of 0.6531.

The overall mood in broader markets seems more tentative so far today. US futures are now flattish and that is resulting in European stocks being little changed on the day as well. As for the bond market, the selling is taking a slight breather for now. 10-year yields in the US are down 1.6 bps to 4.148% but off earlier lows of 4.123% at least.

This article was written by Justin Low at www.forexlive.com.

• Prior -0.3%; revised to +0.3%

On the year, Eurozone retail sales fell by 0.8% and that arguably owes much to the lackluster performance by Germany. As for the December month, retail food sales were seen down 1.6% on the month while non-food retail sales were down 1.0% on the month.

This article was written by Justin Low at www.forexlive.com.