Key Highlights

Dollar Gains:
Significant monthly increase, influenced by strong U.S. data and Fed rate cut
speculations.

Eurozone’s
Economic Stance: Stagnant growth in Q4 and ECB’s tight monetary policy
amid rate cut expectations.

Technical
Analysis Insights: Bearish momentum for EUR/USD highlighted by key technical
indicators, with pivotal points at $1.07 support and $1.09 resistance levels.

Market
Snapshot

The dollar
is heading for its most substantial monthly increase since September, as the
EUR/USD has trended lower since the year’s start, falling 2% and currently just
above the $1.08 level.

The dollars
gain against major currencies this month is attributed to adjusted market
expectations regarding the pace of Federal Reserve rate cuts, influenced by
strong U.S. economic data and
central banker comments. Economic indicators, such as job numbers and consumer
spending, have highlighted the resilience of the U.S. economy, contributing to
the strengthening of the dollar.

Economic
Drivers

Euro Area
Growth Stagnates: The Euro Area avoided recession in Q4 with flat growth,
outperforming expectations of a -0.1% contraction after a -0.1% decline in Q3.

Germany
Avoids Technical Recession: Q3 GDP revisions allowed Germany to narrowly escape
a technical recession, with Q3 GDP adjusted to flat from -0.1%. Q4 GDP showed a
contraction of 0.3%, in line with forecasts.

European
Central Bank Policy Meeting: The ECB’s latest meeting emphasized continued
commitment to tightening monetary policy to address inflation concerns. This
stance is generally supportive of the euro but also raises questions about
economic growth sustainability in the face of higher borrowing costs.

ECB Rate Cut
Expectations: Market expectations suggest a 75% chance the European Central
Bank will start cutting rates at its April 11th meeting, potentially reducing
the Deposit Facility rate to 2.50% by year-end from the current 4%.

US Economic
Data: The US has released a series of economic reports indicating strong
economic performance, including job growth and retail sales. Such data supports
the case of higher for long interest rates by the Federal Reserve,
strengthening the dollar against the euro.

FED Rate Cut
Expectations: Traders await the Federal Reserve’s decision, hoping for signals
on when rate cuts may begin. Financial
markets see a 50/50 chance of a rate cut in March, with a cut fully priced
in for the May 1st meeting. A hawkish surprise from the Fed could boost the
USD, negatively impacting the EUR/USD.

Technical
Overview and Key Levels

The EUR/USD
pair has displayed a bearish trend since the beginning of the year,
characterized by a structured decline on lower timeframes and navigating within
a downward trend channel. Notably, the currency pair breached the 45-day
exponential moving average (EMA) channel on the daily chart and is now nearing
the 200-day EMA support level. A critical juncture for the Euro lies ahead as
it approaches the $1.0750 to $1.0700 support zone, marked by the December low
and the 200-day EMA channel.

Key
resistance is firmly established at the $1.09 level, which has effectively
rejected upward movements three times during January, reinforcing the bearish
outlook as long as the pair remains below this threshold. Short-term resistance
is identified at $1.0850, where a break above could potentially halt or delay
the ongoing decline. On the contrary, a drop below the $1.08 mark could accelerate
the bearish momentum, paving the way towards the key support area above $1.07.

EURUSD 4Hour
Chart

Looking
Ahead

Influence of
Monetary Policy Divergence: Short-term trends for the EUR/USD will be shaped by
Eurozone inflation figures, the health of the US labour market, and Federal
Reserve policy decisions, with significant potential impacts from diverging
monetary policies between the ECB and the Fed. A hawkish stance from the Fed,
coupled with softer Eurozone inflation figures, might tilt the monetary policy
divergence in favour of the U.S. dollar.

Federal
Reserve’s Upcoming Decision: The Fed is anticipated to keep U.S. interest rates
steady, potentially signalling future cuts by altering its language on
considering further hikes. The outcome of the Fed meeting is expected to
significantly influence the EUR/USD rate, depending on the perceived likelihood
of a March rate cut.

Pivotal US
Jobs Report: Friday’s US Jobs Report is crucial, with the unemployment rate
anticipated to slightly increase to 3.8% and average hourly earnings expected
to grow by 4.1% year-over-year.

The EUR/USD
remains at the mercy of central bank policies, economic data releases, and
global market sentiment. Investors and
traders should monitor these developments along with any possible reaction
at the key technical levels that could shape the market dynamics in the short term.

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

• Prior 5.25%
• Bank rate vote 6-2-1 vs 8-1-0 expected
• Statement details to follow..

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

USD

• 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 Job Openings surprised to the upside
  although the hiring and quit rates remain below pre-pandemic levels.
• The latest US PMIs beat expectations by a
  big margin for both the Manufacturing and Services measures.
• The US Retail Sales beat expectations
  across the board.
• 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.

GBP

• The BoE left interest rates
  unchanged as expected at the last meeting with no dovish language as they
  reaffirmed that they will keep rates high for sufficiently long to return to
  the 2% target.
• The latest employment report showed
  job losses in December and lower than expected wage growth.
• The UK CPI beat expectations across
  the board, which is going to reinforce the BoE’s neutral stance.
• The latest UK PMIs showed the
  Manufacturing sector improving but remaining in contraction while the Services
  sector continues to expand.
• The latest UK Retail Sales missed
  expectations across the board by a big margin as consumer spending remains
  weak.
• The market expects the BoE to start
  cutting rates in May.

GBPUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that GBPUSD keeps trading inside the range
between the 1.2610 support and 1.2800 resistance. The price is currently
approaching the support level where we can expect the buyers to step in with a
defined risk below the level to position for another rally into the resistance.
The sellers, on the other hand, will want to see the price breaking lower to
invalidate the bullish setup and position for a drop into the next support
around the 1.25 handle.

GBPUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
yesterday rallied into the downward trendline and got rejected as the sellers
stepped in to position for a drop into the support. The momentum then picked up
as the Fed resulted a bit more hawkish than expected and today, we can expect
some action around the support as we get the BoE rate decision and some key US
data.

GBPUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a steep downward trendline defining the current bearish impulse. If we do
see a bounce from the support, we can expect even more buyers piling in on a
break above the trendline as a confirmation for a change in momentum.

Upcoming Events

Today we have the BoE rate
decision where the central bank is expected to keep everything unchanged and
later on, we will see the latest US Jobless Claims figures and the ISM
Manufacturing PMI. Tomorrow, we conclude the week with the US NFP report.

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

Heroes of Mavia, a groundbreaking Web3 AAA mobile base builder strategy game, is now available on iOS and Android app stores. This launch marks a new era in gaming, merging the thrill of strategy gameplay with the innovative aspects of Web3 technology.

After a successful private beta period of three months, which attracted over 350,000 waitlisted enthusiasts and showcased impressive engagement statistics such as 12k daily and 45k monthly active users, Heroes of Mavia is set to captivate the global gaming community. The game boasts a daily average playtime of 24 minutes and a remarkable 42% day 7 retention rate, indicating its compelling gameplay and engaging content.

Coinciding with this eagerly awaited launch, Heroes of Mavia introduces the „Mavia Pioneer Airdrop Program – Turbocharged.“ This unique program offers early adopters, who download the game before the $MAVIA token launch on February 6th, an opportunity to participate in the $MAVIA airdrop, thereby immersing them in the world of Web3 gaming rewards.

The Heroes of Mavia community has experienced rapid growth, with its Twitter and Discord channels gaining 45,000 new followers and members in just two weeks, highlighting the game’s burgeoning popularity.

Heroes of Mavia is committed to bridging the gap between traditional gaming (Web2) and the new era of Web3 gaming. Each player is equipped with an in-built on-chain non-custodial wallet, facilitating the minting, purchasing, and trading of unique in-game items (NFTs). This feature not only enhances the gaming experience but also opens doors to the dynamic world of Web3.

The game’s recent partnership with Kick.com solidifies Heroes of Mavia’s position in the Web2 streaming world, broadening its appeal and influence within the gaming community.

Distinctively, Heroes of Mavia’s innovative Web3 model is built for sustainable growth, steering clear of the hyperinflation issues common in many play-to-earn projects. This approach promises a balanced and enriching experience for all players, whether they are long-time Web3 enthusiasts or new entrants to this exciting domain.

About Heroes of Mavia

Heroes of Mavia (https://www.mavia.com/) is a AAA mobile Web3 strategy game available on iOS and Android app stores globally. The game is backed by prominent investors such as Binance Labs, Genblock Capital, Delphi Digital, Mechanism Capital, Bitkraft, Animoca Brands among others. The native Heroes of Mavia tokens $MAVIA is set to launch on February 6th 2024.

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

This was already expected after the report from last week here:

• OPEC+ reportedly likely to wait several weeks before deciding on oil output policy

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

GBP/USD is trading at the lows for the day amid a firmer dollar, though the pound is also lagging slightly against the rest of the major currencies bloc. The pair is down 0.4% to 1.2628 but remains stuck in a consolidative range in the bigger picture:

That could very well change in the aftermath of the BOE meeting later today. While the central bank is expected to keep rates unchanged, there will be plenty of focus and scrutiny on the statement language and Bailey’s press conference.

I shared some food for thought earlier here: The central bank spotlight continues with the BOE today

Going back to GBP/USD, there has been some consolidation around 1.2600 to 1.2800 as of late. And eventually, something’s gotta give.

A more dovish BOE today could put in motion a breakdown of the above range. And that will tee up a drive towards the 200-day moving average (blue line) next with sellers eyeing the December lows near 1.2500 potentially as well.

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

• Inflation figures have mostly brought positive surprises recently
• Does not want to put a figure on what „slightly lower“ means
• Monetary policy has played its part in bringing inflation down
• Euro area growth prospects have deteriorated in the meantime
• Growth could even be slightly below 0.8%, as projected in December
• Full transcript

All of the language here is to tee up rate cuts that are now likely to come in either April or June. He’s alluding to softer inflation and weaker growth. And those are the two key ingredients to start the recipe of easing monetary policy in the months ahead.

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

NASDAQ 100 futures technical analysis before the FOMC meeting today

ForexLive.com, January 31, 2024

NQ technical analysis video

The NASDAQ 100 futures market has been in a trading range and just crossed down its value area low at 17500, which I also mentioned is an important price level to watch in my previous video, and if we CLOSE 2 CONSECUTIVE days below it, then bears regain control. This has not happened yet. The market may decline till an area of a potential double support level formed by a trend line and the bottom standard deviation of the value area. WATCH 17025 TO 17250 for a possibly reversal up.

FOMC Meeting

The Federal Open Market Committee (FOMC) is meeting today to discuss interest rates.While a ’snoozer; is expected, meaning that it may not change anything in the market yet, this type of an event is always a wildcard simply due to a word or two that may come in play with Jerome Powell.

Earnings Results influencing NQ till end of this week

Earnings results have been a major factor in the recent selloff in the NASDAQ 100 futures market. Google and AMD both reported disappointing earnings this week, and their stocks have fallen. Other tech stocks are also under pressure, as investors worry about the impact of rising interest rates on corporate profits.

1. AMD is declining apx 7%, GOOG is declining apx 5.5%
2. MSFT is declining apx 1.5% but may surprise a bit a turn greenish till the end of the week
3. We stll have major earnings reports by META, APPL and AMZN, till the end of the week

Unemployment Report on Friday, 02 Feb 2024

The Bureau of Labor Statistics will release the January unemployment report on Friday. The market is expecting the unemployment rate to remain at 3.9%. However, a weaker-than-expected report could trigger a selloff in the stock market.

The NASDAQ 100 futures market is facing a number of headwinds, including disappointing earnings results, rising interest rates, and the FOMC meeting. However, I am staying contrarian and still believe that there is a good chance for the market to reach my target of 18,000. Traders should stay adaptive to the market and be prepared to adjust their trading strategies accordingly. ALWAYS TRADE AT YOUR OWN RISK.

Additional Resources

• NASDAQ 100 Futures Technical Analysis
• NASDAQ 100 Futures Chart
• Google Earnings
• AMD Earnings
• FOMC Meeting
• Unemployment Report

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

When most people
hear about Forex trading, they imagine a bustling currency exchange office with
streams of people constantly exchanging one currency for another.

In the digital age,
however, the reality of Forex trading stretches far beyond these physical
spaces. It’s an expansive world where the uninitiated may feel like sailors
entering choppy seas without a map. Yet, for those who take the time to learn
the ropes, these waters hold the potential for fascinating journeys and
rewarding destinations.

Charting a Course Through Dynamic Forex Markets

Navigating the Forex
market requires understanding its unique characteristics – it’s about knowing
various currency pairs, leveraging positions for maximum potential, and
tracking market hours that span the globe.

Moreover,
geopolitical events can send ripples across the market, influencing currency
values and opening windows of opportunity for the astute trader. To ride these
waves, one must become adept at reading technical indicators and making timely
decisions, sometimes with the help of automated trading tools that work around
the clock.

While Forex trading
may seem unpredictable, a trader who masters the art of technical and
fundamental analysis can anticipate market trends. Access to real-time global
news, an understanding of market sentiment and a solid grasp on economic
calendars can arm a trader with necessary insights.

Traders who equip
themselves with comprehensive market knowledge stand to navigate the Forex
waves with confidence and precision, transforming seemingly random fluctuations
into strategic trading decisions.

Exploring Opportunities in Metal Trading

Forex trading often
involves more than just currencies. Many traders also find allure in the world
of precious metals. Assets like gold, silver and platinum can offer a variety
of trading opportunities. Economic indicators such as inflation rates or employment data often reflect
in the fluctuating prices of these metals.

Thus, incorporating
them into a diversified trading portfolio might serve both as a buffer against
inflation and a play on market sentiment. Interestingly, metal commodities also
exhibit seasonal trends, which seasoned traders might leverage to their advantage.

Notably, trading in
metals can complement currency trades, offering a way to hedge against currency
risks. Furthermore, recognizing correlations between currencies and commodities
such as gold or oil, often referred to as ‚commodity currencies‘, can open up a
new dimension in trading strategies.

By understanding
this dynamic interplay, traders can craft a multi-faceted approach to the
market, considering both currency and commodity trends for a more robust
investment portfolio.

Diverse Account Options for Customized Trading
Strategies

The trading
experience can vary significantly based on the type of account one chooses.
Novice traders might benefit from demo accounts where they can practice without
risk, while experienced traders may prefer accounts with options for higher
leverage.

Some platforms offer
VIP services suited to high-volume traders, providing additional tools and
resources to those willing to delve deeper into the trading realm. The key is
to match your trading style with the right account type, ensuring that the
benefits of leverage and margin requirements are balanced against your risk
tolerance.

Savvy traders often
take a tailored approach to Forex trading by carefully selecting account
features that best suit their trading style. From accounts designed for those
who prefer extensive analysis and manual trading to those optimized for
automated trading systems, the choice heavily influences the trader’s journey.

Identifying personal
goals and risk tolerance is paramount in constructing a suitable trading
environment that promotes both growth and security.

Global Markets at Your Fingertips: Navigating
International Trading Opportunities

The modern trader is
no longer confined to their local economy – they can tap into international
trading opportunities that span the globe. By participating in these global
markets, traders can introduce themselves to new currencies and the risks and
benefits associated with them.

Seasoned traders
often find exotic currency pairs appealing due to their potential for high
volatility and large swings, which can translate to substantial profits if
navigated wisely. To thrive in this diverse marketplace, understanding
cross-border partnerships and regulations becomes crucial.

Diving into
international markets can be enriching, as exposure to diverse economies can
offer a broader perspective on global finance. Successful traders pay close
attention to international economic reports, central bank
announcements and shifts in trade relationships to seize trading opportunities
whenever they arise.

Hence, an astute
approach to these markets will involve staying abreast of a complex web of
international developments that drive currency values on a global stage.

Balancing Risk and Reward in CFD Trading

Among the
instruments available to Forex traders are Contracts for Difference (CFDs),
which allow participants to speculate on the price movements of currencies,
indices, commodities and more without the need to own the underlying asset.

Though CFDs can
amplify gains, they also increase the risks, which makes risk management tools
indispensable in these trades. By understanding when to take long or short
positions, and employing strategies to minimize exposure, traders can balance
the risk and reward inherent in CFD trading and strive for successful market
engagements.

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

The JOLTS job openings yesterday here showed that markets are susceptible to data releases even as we await the Fed policy decision later today. It is jobs week in the US after all and this builds up towards the non-farm payrolls report on Friday. For today, there is the ADP employment data that will be released.

More often than not, the data here feels like going to the roulette table. It isn’t the best, or even a good, indicator of what to expect on Friday. However, it is still a release that traders tend to react towards and that will make it an appetiser before the Fed later.

In December, the ADP employment change showed an increase of 164k and that was above estimates of 145k. For the January release, it is expected to show an increase of 145k.

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