<p style=““ class=“text-align-justify“>This is consistent with the other state readings seen <a target=“_blank“ href=“https://www.forexlive.com/news/bavaria-december-cpi-92-vs-109-yy-prior-20230103/“ target=“_blank“ rel=“follow“>here</a> and as mentioned then, it would seem like we might get something along the lines of 8.4% to 8.7% for the national reading later today instead of the 9.1% estimated.</p>

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

<p class=“MsoNormal“>UPCOMING
EVENTS:</p><p class=“MsoNormal“>Wednesday:
US ISM Manufacturing PMI, FOMC Minutes.</p><p class=“MsoNormal“>Friday: US
NFP, US ISM Services PMI.</p><p class=“MsoNormal“>Welcome to
2023 everyone! If 2022 was a nice year in terms of trading opportunities,
this year is going to be even better, so get ready. Let’s first start from
where we left and continue from there…</p><p class=“MsoNormal“>Inflation is
showing signs of moderating. The last two <a target=“_blank“ href=“https://www.forexlive.com/news/us-november-cpi-71-yy-vs-73-expected-20221213/“ target=“_blank“ rel=“follow“>US
CPI reports missed expectations</a>, and since the CPI is a lagging indicator
and leading indicators were already pointing to a slowdown in the inflation
rate, we can expect the disinflationary trend to continue. </p><p class=“MsoNormal“>The <a target=“_blank“ href=“https://www.forexlive.com/news/us-november-non-farm-payrolls-263k-vs-200k-expected-20221202/“ target=“_blank“ rel=“follow“>labour
market</a> is one of the most lagging indicators and it kept on
showing strength throughout the 2022, which disappointed the Fed as they wanted
to see cracks in the data and a pickup in unemployment. In fact, they keep
complaining about the “extremely tight labour market” and this isn’t giving
them much confidence in letting go from their tightening process. </p><p class=“MsoNormal“>There were
expectations that the Fed would be less hawkish in its last FOMC meeting in
December as the CPI data missed expectations two times in a row, BUT the Fed
was more hawkish than expected in 3 key things:</p><p class=“MsoListParagraph“>· Following
the miss in the CPI report, Fed members had the chance to revise the Dot Plot
until Tuesday evening, so that is after the CPI report, BUT they chose not
to do it.</p><p class=“MsoListParagraph“>· The <a target=“_blank“ href=“https://www.forexlive.com/centralbank/fomc-dot-plot-and-central-tendencies-from-dec-2022-meeting-eoy-2023-48-20221214/“ target=“_blank“ rel=“follow“>Dot
Plot</a> showed an overwhelming consensus from the Fed members in hiking rates
to 5% or higher and remaining higher for longer as no cuts are expected
for 2023 and a 4.1% rate is expected in 2024. </p><p class=“MsoListParagraph“>· <a target=“_blank“ href=“https://www.forexlive.com/centralbank/powell-opening-statement-we-have-more-work-to-do-20221214/“ target=“_blank“ rel=“follow“>Fed
Chair Powell sounded resolute</a> in keeping at it and pushed back against
expectations for rate cuts in 2023. </p><p class=“MsoNormal“>As mentioned
earlier, the Fed won’t have the confidence in letting go until they see
unemployment picking up. The issue here is that they forecast unemployment
to rise to 4.6% in 2023 with no cuts expected. </p><p class=“MsoNormal“>This means
that they will pause hikes somewhere in the 5% area and likely stay there
unless unemployment deviates from their forecasts in which case it would be
too late as the domino effect takes hold. In the chart below you can see
how the Fed always underestimated the pain in the labour market.</p><p class=“MsoNormal“>This points
to a deep recession coupled with a possible overtightening from the Fed. So, the 2023
playbook, in my opinion, would be again to stay defensive as I expect the safe
haven currencies (USD, CHF <a target=“_blank“ href=“https://www.forexlive.com/centralbank/boj-is-considering-raising-its-inflation-outlook-thisd-pave-the-way-for-a-policy-pivot-20230101/“ target=“_blank“ rel=“follow“>and
this time also JPY</a>) to be preferred, the stock market and commodities to
fall further and the bond market to switch into a bull market. </p><p class=“MsoNormal“>On a side
note, the long US Dollar was the most crowded trade in 2022 and in such
instances, we can generally see huge unwinding once the narrative shifts. This
happened in the past months as the market looked forward to slowing
inflation and earlier than expected “Fed pivot”. </p><p class=“MsoNormal“>The Fed
ended this narrative, and the US Dollar should come back. In fact, the US
Dollar positioning went to the highest net short since July 2021 and lately
specs trimmed their net short positions. The long US Dollar trade is no longer
overcrowded, which is something you want to see if you want to go long again. </p><p class=“MsoNormal“>Technically,
in the DXY (US Dollar Index) chart below you can see a falling wedge pattern forming
(or an ending diagonal if you’re an elliottician). This is a reversal
pattern and signals a loss of momentum. Generally, the first target is the
top of the pattern, which would be in the 108 area, but all else being equal,
we should see it going even higher. This week we may see another spike
downwards if the market takes bad data as good news, but I expect that to be
faded eventually. </p><p class=“MsoNormal“>Wednesday: The US ISM Manufacturing PMI is expected to
dip further into the contractionary territory from 49 to 48.5. The trend is
expected to continue as the Fed keeps on tightening monetary conditions and the
recession worsens. Prices paid sub-index is something to keep an eye on as
it generally a leading indicator for inflation. </p><p class=“MsoNormal“>The FOMC
Minutes should just be a reminder for the market that the Fed is not on their
side, and they just want to get inflation back to their target. They also want
to break the market mentality of the “Fed Put”.</p><p class=“MsoNormal“>Friday: I expect
the US NFP to be the main market mover from now on. Even more than the CPI.
The report is expected to show 200K jobs added, down from the previous 263K but
still a solid number, and the unemployment rate to stay unchanged at 3.7%. Good
data should be bad for risk assets, but I expect also bad data to be bad for
risk assets as the risks shift to the overtightening and a deep recession
rather than the Fed pausing earlier or even cutting anytime soon. </p><p class=“MsoNormal“>The average
hourly earnings are expected to come at 5% Y/Y, down from the prior 5.1% and at
0.4% M/M, down from the prior 0.6%. If wages beat expectations again, I expect
risk assets to suffer as it will make the Fed even more uncomfortable. A miss
would be a welcome news, but the overtightening narrative coupled with the
recession should come first in the market’s mind. </p><p class=“MsoNormal“>The US ISM
Services PMI is expected to dip to 55 from the prior 56.5 reading. The services
sector has been showing resilience throughout the 2022 and worst part is that
the prices paid sub-index hasn’t come down as fast as its manufacturing
counterpart. </p><p class=“MsoNormal“>This is
something that keeps the “higher inflation for longer” narrative alive as the
inflation rate may come down but not enough for the Fed to achieve their target. Although I
expect the NFP to be much more important, keep an eye on this report as well as
it may exacerbate or reverse the NFP reaction depending on the outcome. </p><p class=“MsoNormal“>This article
was written by Giuseppe Dellamotta.</p>

This article was written by ForexLive at www.forexlive.com.

<p>Technical analysis of Bitcoin evaluates the crypto king by assessing previous prices and volume,. Technical analysts don’t analyze a security’s inherent worth, but instead utilize charts and other tools to uncover trends.</p><p>Technical analysis also uses patterns to predict future price changes. These patterns may be bullish, bearish, or neutral, indicating a price increase, decrease, or consolidation. <a target=“_blank“ href=“https://www.forexlive.com/Education/the-head-and-shoulders-pattern-20221209/“>Head-and-shoulders pattern</a>, <a target=“_blank“ href=“https://www.forexlive.com/Education/how-to-trade-by-triangle-strategy-20220120/“>triangles</a>, flags and pennants are <a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>typical chart patterns</a>.</p><p>Many times, in technical analysis we’ve also got ‚key levels‘, or key price levels: Important price level is a chart point where the price has found support or resistance and/or it is expected, in a probability of more than 50% (and hardly more than 85%), that these price points will expedite new and inrcreased market participation. On the mechanical under the hood, there are buy and sell orders that are typically waiting above and below key levels. So, these levels may be used to determine entry and exit locations for trading.</p><p>In the follow technical analysis vodthese procedures to analyze Bitcoin technically, according to key levels.</p><ul><li>A daily candle closing below $15500 would start a new chapter for the bears (more decline for BTCUSD) but in the meantime…</li><li>The decentralized digital currency seems to be at an interesting spot for early speculative traders or buyers that can be well paid later in terms of the high reward vs. risk ratio. </li><li>The video shows trade ideas with 2.6 and over 6 reward vs. risk ratios for new bulls. </li><li>Bitcoin above $18255 would mark another „confirmation“ for the bull case.</li></ul><p>Last but not least, after a terrible 2022 for Bitcoin, there are still strong market influencers that may think that BTC is done with the dip and may be interested to start a new year with a new increased price sentiment. While this is not technical analysis, it is also something to keep an eye out for.</p><p>Trade BTCUSD at your own risk and do visit <a target=“_blank“ href=“www.forexlive.com“>ForexLive.com</a> for additional perspectives.</p>

This article was written by Itai Levitan at www.forexlive.com.

<p class=“MsoNormal“>Bitcoin has
added 1.4% in the last 24 hours, reaching the 16.7K level. It is a new attempt
to test the 50-day moving average on a general lull and an effort by the bulls
to paint a more optimistic technical picture with less strength while liquidity
remains depressed.</p><p class=“MsoNormal“>Bitcoin Technical
Analysis</p><p class=“MsoNormal“>This tactic
is already successful, as the total capitalisation exceeds 800 billion (+1.6%
in 24 hours).</p><p class=“MsoNormal“>The current
dynamic looks like an attempt to draw a line under a bearish 2022. We also note
that the December lows were higher than the November lows. But to argue for a
reversal, it is more prudent to wait for a renewal of the local highs rather
than relying only on the waning declines.</p><p class=“MsoNormal“>Closing the
day above the 50-day average (around 16750) might give new momentum to the
upside, and consolidation above 17K might be notable news in the quiet
information flow and serve as a decoy for the bulls.</p><p class=“MsoNormal“>At the same
time, we recall that since July 2022, overcoming the 50-day average served as a
trigger for selling on impressive volumes, and bitcoin soon renewed lows.</p><p class=“MsoNormal“>This article was written <a target=“_blank“ href=“https://www.fxpro.com/“ target=“_blank“ rel=“follow“>by FxPro</a>’s Senior Market Analyst Alex
Kuptsikevich.</p>

This article was written by FxPro FXPro at www.forexlive.com.

<ul><li>Prior 46.2</li></ul><p style=““ class=“text-align-justify“>The downturn in Germany’s important manufacturing sector eases in December, with an improvement in supply conditions helping to alleviate some of the pain from price pressures. That said, new orders were down for a ninth consecutive month as the outlook remains dim despite manufacturers being less pessimistic towards the end of the year. S&P Global notes that:</p><p style=““ class=“text-align-justify“>“Some of the gloom surrounding the German manufacturing sector has been lifted, with December’s PMI survey showing the downturn in factory output levels easing, and less concern towards the year-ahead outlook. </p><p style=““ class=“text-align-justify“>“The survey signalled better availability of materials and with it an easing of the decline in production. Still, rapidly falling new orders remains an issue for many manufacturers, particularly intermediate goods producers (i.e. makers of components for other businesses), with high stocks being just one of the factors weighing on demand. </p><p style=““ class=“text-align-justify“>“With expectations remaining pessimistic, it suggests that in companies‘ minds the downside risks to future production continue to outweigh any growth opportunities. The outlook has, however, improved compared to the situation a few months ago, with concerns towards gas prices and supplies having subsided somewhat. </p><p style=““ class=“text-align-justify“>“On the price front, we’re seeing further evidence of disinflationary forces in the manufacturing PMI survey. Although still historically elevated, the rate of factory gate price inflation has more than halved from its peak in the spring of last year, as supply chain bottlenecks ease and firms face greater difficulty passing on cost increases to customers.“</p>

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

<ul><li>Prior 47.1</li></ul><p style=““ class=“text-align-justify“>The downturn in the euro area manufacturing sector eases towards the end of last year, as supply conditions stabilise and inflation pressures cool off. That at least points to some hope that any recession will be less pronounced than feared but it is still too early to call this any sort of turning point for Europe’s economic prospects. S&P Global notes that:</p><p style=““ class=“text-align-justify“>“A second successive monthly cooling in the rate of loss of factory output brings some cheer for the beleaguered manufacturing sector as we start the new year. The number of optimists regarding the year ahead has also now exceeded pessimists for the first time since August, hinting at a steady improvement in business confidence. </p><p style=““ class=“text-align-justify“>“Prospects have brightened amid signs of healing supply chains and a marked softening of inflationary pressures, as well as a calming of concerns over the region’s energy crisis, thanks in part to government assistance. Hence the supply chain and <a target=“_blank“ href=“https://www.forexlive.com/terms/i/inflation/“ target=“_blank“ id=“ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa_2″ class=“terms__main-term“>inflation</a> headwinds facing businesses have moderated from the heightened state of alarm seen in the autumn. </p><p style=““ class=“text-align-justify“>“The brighter news is tempered, however, by the ongoing weakness of demand, with inflows of new orders continuing to fall at a far faster rate than companies are reducing output, suggesting that manufacturers will have to cut production sharply further in coming months unless demand revives soon. With the global economic backdrop darkening and eurozone interest rates rising again in December, risks to the demand outlook remain skewed to the downside. </p><p style=““ class=“text-align-justify“>“As for the year ahead, in addition to watching for potential fiscal and monetary policy changes, high on the list of issues for manufacturers to watch as we head into 2023 will be the impact on supply chains and commodity prices from the changing response to COVID-19 in China, as well as the possibility of sharply changing energy prices amid the changing geopolitical situation, with the Ukraine-Russia war remaining the key threat to stability in the region.”</p>

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

<ul><li>Prior 48.3</li></ul><p style=““ class=“text-align-justify“>This just reaffirms another contraction in France’s manufacturing sector, though the drop in output is the slowest in the past seven months. However, employment conditions declined for the first time since January 2021 and there was a slight acceleration in output charge inflation. S&P Global notes that:</p><p style=““ class=“text-align-justify“>“France’s manufacturing downturn continued into December as the effects of inflation, slowing economic activity and high energy costs weighed on the performance of the sector. </p><p style=““ class=“text-align-justify“>“However, the strength of the downturn continued to ease, with output and new orders falling at their slowest rates since May and June respectively. An improvement in business confidence also provides tentative signs that the industrial sector recession may not be as severe as first feared. </p><p style=““ class=“text-align-justify“>“Inflation remains a key risk to the performance of the manufacturing sector, with high prices deterring clients from making new orders. The fact that energy costs thus far haven’t surged to the levels some were initially expecting has been a boost to the sector, although whether things take a turn for the worst this remains to be seen.“</p>

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

<p>Apple is ending the year as the largest capitalized stock in the US. It closed the year with a market capitalization of $2.066T, and that makes it the only company above the $2T level. </p><p>That is the good news. The not so good news is its peak end of day market capitalization reached $2.973T back on January 3rd, 2022. On that day the market capitalization reached an intraday high of over $3T, making it the first US company to reach that milestone, but backed off into the close, and after another try on January 4th, the capitalization never returned to the lofty milestone again. From the high capitalization to the end of 2022 level, the company lost $907B.</p><p>The chart below shows the high capitalization levels of the top 20 companies vs the EOY 2022 levels, and the dollar change in capitalization.</p><p>The magnitude of that $907B dollar decline was not the worst decline from the peak. That distinction goes to Amazon whose peak market capitalization reached 1888B on July 8, 2021 and closed 2022 at $856B for a cool -$1.031T decline. </p><p>Ironically (or maybe not0, that peak in Amazon’s market capitalization coincided roughly with the day that Jeff Bezos turned the helm over to the company’s cloud-computing boss Andy Jassy. </p><p>Bezos said at the time, “We chose that date because it’s sentimental for me, the day Amazon was incorporated in 1994, exactly 27 years ago.”</p><p>The date will now have a less sentimental distinction as being within 3 days of the highest capitalization for the retail behemoth.</p><p>From a percentage basis, the biggest loser of the top 20 in market capitalization goes to Meta Platform which has seen Mark Zuckerberg’s companies stock lose -70.33% of its market capitalization as it shifted to its metaverse initiative. Meta shares reached a high stock price on September 21, 2021 and a high market capitalization of 1.078T on that day. However, that capitalization has now declined to $319.88B (or -$758.12B).</p><p>The next biggest loser from a % capitalization perspective is Tesla which fell -68.61% from its January 3, 2022 high watermark. 2022 saw the leader in EV market struggle with supply issues, a China slowdown, increased competition and the knock on effect from CEO’s Musk’s purchase of Twitter. Musk lost over $120B in net worth in 2022 as a result of decline in Tesla stock. He exasperated the decline in the stock by selling close to $23B of his shares to finance the purchase of Twitter. </p><p>So how did the stocks of the top 20 capitalized companies fare in 2022?</p><p>Tesla and Meta had the biggest 2022 stock declines of -65.03% an -64.22% respectively. That was followed by Nvidia which fell -50.31% and Amazon which fell -49.61%. Alphabet (Google) rounded out the top 5 with a decline of -38.67%</p><p>Despite the sharp declines in the major indices in 2022 which saw the S&P fall -19.44%, there were 5 of the top 20 largest cap stocks whose stock rose in 2022. </p><p>The top 5 % stock winners were led by:</p><ul><li>Exxon Mobile whose stock rose 80.26%. </li><li>Chevron, another gas and oil company rose by 52.95%. </li><li>Pharma company Eli Lilly increased 32.45%, </li><li>UnitedHealth rose 5.58%, and </li><li>Johnson and Johnson – also in the pharma space rose 3.26%. </li></ul>

This article was written by Greg Michalowski at www.forexlive.com.

<p>December PMIs from China’s National Bureau of Statistics (NBS) and the China Federation of Logistics and Purchasing (CFLP).</p><p> Manufacturing 47.0 </p><ul><li>prior 48.0</li></ul><p>Services 41.6 </p><ul><li>prior 46.7</li></ul><p>Composite 42.6</p><ul><li>prior 47.1</li></ul><p>Languishing with the renewed COVID-19 outbreak as China moved rapidly towards reopening. While widespread lockdowns are a thing of the past self-imposed isolation and illness have seen impacts on the Chinese economy as workers stay home and others (at the margin) avoid going out and about. Check out the Services PMI, 41.6 is deeply contractionary. Eating out, shopping, personal services, and more – all suffering.</p><p>While this set of results will not be a positive for China trades, China-proxy trades (AUD for example), oil and other commodities, for traders and markets it will not be a surprise. We’ve all been seeing how the virus is spreading in China, despite the official Chinese media downplaying it, and how that is hitting economic activity. China’s people deserve better, hopefully it’ll come good for them soon. </p><p>-</p><p>As a note, major forex centres in Asia will all be closed on Monday. </p><ul><li>Japan, Singapore, Hong Kong, Australia and New Zealand markets are all closed.</li></ul><p>China is also out on Monday.</p><p>-</p><p>Happy New Year to all – catch you on Tuesday morning Asia time!</p>

This article was written by Eamonn Sheridan at www.forexlive.com.

<p>The 2022 year is in the books and the final rankings of the strongest to the weakest of the major currencies is showing the USD as the strongest and the JPY as the weakest. </p><p>The central bank fundamentals drove both the USD and the JPY to their respective positions. </p><p>The Federal Reserve hiked rates the fastest and the most of all the major countries. Overall, the Federal Reserve hiked rates by 4.25% from 0.25% at the end of 2021 to 4.5% (high target) at the end of 2022. </p><p>The Bank of Japan did not hike once in 2022, choosing instead to maintain their steady rate policy in the face of a tick up in inflation. As a result, their currency was hit hard for most of the year with the USDJPY reaching the highest level going back to July 1990 at it’s peak on October 21, 2022. </p><p>At the high the USDJPY had move up 32.02% for the year. The last 2+ months did see the USDJPY pair correct more than 50% of the years trading range, with the USDJPY ending the year still up 13.91% but well off the highs. </p><p>Catalysts for the decline in the USDJPY (rise in the JPY) other than overbought technical conditions and some technical tilts including a break below the 100 and 200 day MAs, include: </p><ul><li>Softening of US inflation, </li><li>More restrictive Fed policy which shifted the bias for the economy lower going into 2023 (at least from the market traders), </li><li>Lower US stocks</li></ul><p>The Bank of Japan did their part, by hiking the ceiling yield for the 10 year bond to 0.5% from 0.25% in December (a small but meaningful gesture and shift). </p><p>Overall, the respective central banks did the following in 2022:</p><ul><li>Federal Reserve +4.25%</li><li>Bank of Canada, +4.00%</li><li>Reserve Bank of New Zealand 3.25%</li><li>Bank of England 3.25%</li><li>Reserve Bank of Australia 3.00%</li><li>ECB 2.5%</li><li>SNB +1.75%</li><li>Bank of Japan 0.0%</li></ul><p>The next strongest currency behind the US was the CHF. Although the SNB raised rates by 1.75% – less than all but the Bank of Japan, they tended to benefit from safe haven flows in 2022 (and not being part of the EU or GBP). They had a bit of the best of the rest.</p><p>On the weak side, the next weakest of the majors was the GBP. The GBP suffered from the impact of the Ukraine War and its proximity to the EU nations (and trade reliance). They also suffered from political uncertainty with 3 separate PMs in 2022. Fiscal blunders from Liz Truss’s 40 or so day’s as Prime Minister also led to sharp selling in September. </p><p>The combination had investors shunning the pound. </p><p>The GBPUSD move to a low of 1.0352 on September 26th before retracing 61.8% into December helped by a settling of the government issues, and a calming from the anxiety from gas/oil. A weaker USD into year end also helped the GBPUSD recover.</p><p>The GBPUSD settled the year right around the 50% midpoint of the 2022 trading range at 1.20499. Nevertheless, the USD gained 10.7% vs the GBP in 2022. </p><p>The EUR was the next strongest behind the CHF despite the trouble from bordering Ukraine. A relatively mild winter and stockpiling of natural gas helped the EURUSD into year end. The ECB increased their hawkish tilt at the December meeting which has helped to keep the gains from the November run higher. </p><p>The AUD, CAD and the NZD had gains and losses vs the major currencies in 2022. Some ups and some downs vs the majors earns the distinction of being „mixed“ in 2022.</p><p>Below are the gainers and the losers of the major pairs. NOTE if the USDJPY was up 13.91%, I simply inversed the JPYUSD for simplicity purposes. </p>

This article was written by Greg Michalowski at www.forexlive.com.