<p>The major US stock indices are ending Friday with solid gains. For the week the Nasdaq is closing marginally higher for the 3rd week in a row but the S&P and Dow closed the week lower. </p><p>The final numbers are showing:</p><ul><li>Dow Industrial Average rose 330.93 points or 1.00% at 33375.50</li><li>S&P index rose 73.74 points or 1.89% at 3972.60</li><li>NASDAQ index rose 288.18 points or 2.66% at 11140.44</li><li>Russell 2000 rose 30.99 points or 1.69% at 1867.33</li></ul><p>For the trading week:</p><ul><li>Dow Industrial Average fell -2.7%</li><li>S&P index fell -0.66%</li><li>NASDAQ index gained 0.55%</li><li>Russell 2000 fell -1.0439%</li></ul>

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

<p>As the trading day works toward the close, the S&P ticked briefly above its 200 day moving average at 3968.82. The high price reach 3970.15. </p><p>Recall from earlier this week, the price closed above the 200 day moving average on Monday and Tuesday, but stalled on Wednesday and fell sharply. The price reached down into 3885.54 yesterday, before starting to rebound in trading today. The low price today stalled against the 50% midpoint of the range since the mid August high. That level comes in at 3897.68. The low price today reached 3897.86 just above that midpoint level.</p><p>The current price is trading back below the 200 day moving average at 3962.58. We’ll see what the next 20 minutes brings.</p><p><a target=“_blank“ href=“https://www.forexlive.com/terms/i/inflation/“ class=“terms__main-term“ id=“ad51a5a2-1afc-4f42-9e62-ea6faf6f90fa“ target=“_blank“>Inflation</a></p>

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

<p>The price of <a target=“_blank“ href=“https://www.forexlive.com/terms/b/bitcoin/“ class=“terms__main-term“ id=“40c895b3-a119-446c-9ead-2735a79a3f80″ target=“_blank“>bitcoin</a> just extended to a intraday high of $21,995 just short of the natural resistance at 22,000. </p><p>Looking at the daily chart the price moved above the high from Wednesday at $21,646 it also extended above the high from November which was at $21,473. Those levels will be close risk levels now. Stay above is the best case scenario for the buyers. </p><p>The next target is at the $22,000 level. Move above that level and the next major target comes against the September high at $22,781.</p><p>The last 4 months have seen the price trade between 15,479 and $22,781. On January 13, the price moved above its 200 day moving average for the first time since the end of December 2021. Bullish.</p><p>There is certainly is plenty of room to roam. The question is does the market have the speculative players it once had, given all the negative headlines, and the sharp declines from the 2021 high up near $69000? Burn me once, shame on you. Burn me twice, shame on me. </p><p>Nevertheless, from the end of year 2022, the price is now up 32.77%. There is nothing like FOMO to get the players back to the table. </p><p>To the moon!</p>

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

<p style=““ class=“text-align-justify“>As is the case with every Lunar New Year, there will be a week-long break for Chinese markets. As such, that will impact liquidity conditions somewhat during Asia trading. Other markets will not be impacted, so expect the usual day-to-day in Europe and North America.</p><p style=““ class=“text-align-justify“>To those celebrating, I wish you and your family a healthy, prosperous and Happy Lunar New Year! 恭禧发财~</p>

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

<ul><li>We have eradicated deflation during my tenure at least</li><li>Economic growth has also been regained since 2013</li><li>Accommodative monetary policy has helped to change the Japanese economic structure</li><li style=““ class=“text-align-justify“>But unfortunately, we still haven’t achieved 2% inflation target in a sustainable manner; that is the only regret I have</li></ul><p style=““ class=“text-align-justify“>Given such a defeated remark, I think that essentially seals the deal that we should not expect any major policy changes to follow by the BOJ until we see Kuroda step down in April.</p>

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

<ul><li>Japanese economy is still recovering</li><li>Labour market is tightening, we expect wages to rise further</li><li>That will help us to meet 2% inflation target in a sustainable, stable manner</li><li>But expects inflation to start declining from February to below 2% next year</li><li>That is why BOJ is maintaining more accommodative policy</li></ul><p style=““ class=“text-align-justify“>This fits with the narrative that the central bank has put out earlier this week with their latest policy decision. On the headline, he is referring to the tweak in the yield curve control policy – defending the move as being one to address market functionality instead.</p>

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

<ul><li>Fiscal policy shouldn’t force monetary policy to do more</li><li>ECB does not target an exchange rate (when asked about EUR/USD moving to 1.20)</li></ul><p style=““ class=“text-align-justify“>Some token remarks by Lagarde to start things off. Nothing that we haven’t heard of already as of late from the ECB.</p>

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

<p style=““ class=“text-align-justify“>There isn’t much in terms of headlines driving the move but perhaps the bond market is one that is worth paying attention to with 10-year Treasury yields now up 3.8 bps to 3.431%, sitting at the highs for the day. That is underpinning yen pairs at the moment, with USD/JPY in particular moving back up to retest its 200-hour moving average (blue line):</p><p style=““ class=“text-align-justify“>Other major currencies are still sitting within their earlier ranges, so this is very much just a yen move for the time being.</p><p style=““ class=“text-align-justify“>Keep below the 200-hour moving average and the near-term bias stays more neutral but push back above and buyers will capture some form of near-term control at least. That said, there are bigger resistance levels to contend with as highlighted <a target=“_blank“ href=“https://www.forexlive.com/news/dollar-holds-more-mixed-so-far-in-european-trading-20230120/“ target=“_blank“ rel=“follow“>here</a>.</p><p style=““ class=“text-align-justify“>The post-BOJ volatility is still something that traders are dealing with and we have BOJ governor Kuroda (alongside ECB president Lagarde) speaking in a panel at Davos coming up.</p>

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

<p style=““ class=“text-align-justify“>When asked on why the ECB is failing to convinced the market about its resolve to raise rates at a quicker pace, Lagarde said that „I would advise market participants to revise their positions“. (h/t @ LiveSquawk)</p><p style=““ class=“text-align-justify“>The added pushback here is weighing further on the market mood with equities down at the lows for the day. European indices are down slightly over 1% and S&P 500 futures are down 29 points, or 0.7%, at the moment. 10-year German bund yields are also up roughly 7 bps on the day now to 2.07%:</p>

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

<ul><li>We will stay the course with rate hikes</li><li>Inflation expectations are not de-anchoring</li><li>We have to avoid the case of that happening</li></ul><p style=““ class=“text-align-justify“>The euro briefly hit the highs for the day on the remarks above, with EUR/USD moving up to 1.0838 before settling back down to 1.0815 now – still up 0.2% on the day though. The slight jump comes as we see euro area bond yields also nudge higher on the day. 10-year German bund yields are up 4 bps to 2.03% currently.</p>

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