Japanese
Candlesticks have been a crucial tool for Forex traders for many years. These
charting patterns offer valuable insights into market trends and price
movement, enabling traders to make well-informed decisions. Our article will
provide a comprehensive guide to understanding Japanese Candlesticks, including
the various common patterns and their practical application in Forex trading
strategies.

Fundamentals of Candlesticks

Prior to
going into the world of Japanese Candlesticks, it is needed to grasp their
historical background and inception. Candlestick charting has its roots in
Japan, dating back to the 18th century. It gained widespread recognition thanks
to the contributions of financial analyst Steve Nison.

The idea
behind candlestick patterns is to visually illustrate price movements during a
particular timeframe. Every candlestick holds crucial data regarding the
opening, closing, high, and low prices of a trading session.

A
candlestick is made up of three main parts: the body, upper shadow (wick), and
lower shadow (wick). The body shows the range between the opening and closing
prices, while the shadows indicate the high and low prices. Through careful
analysis of these elements, traders can acquire valuable insights into market
sentiment and possible price reversals.

Reversal
patterns can indicate a shift in trend direction, while continuation patterns
indicate a brief consolidation or retracement before the trend continues.
Through precise identification of these patterns, traders can make necessary
adjustments to their trading strategies.

Types of Common Candlestick
Patterns

There
are two main categories of Japanese candlestick patterns: single candlestick
patterns and multiple candlestick patterns. Traders should be aware of both
bullish and bearish patterns that may signal potential buying or selling
opportunities.

Therefore,
we put together a selection of the most popular candlestick patterns that we
believe will be valuable to you in forex trading. These patterns can
effectively indicate price reversals and breakout points in the market.

Single Candlestick Patterns

Single
candlestick patterns provide quick indications about the market sentiment. Some
notable examples include:

• Doji: Doji is well-known for its ability to balance between buyers and
  sellers, resulting in a candlestick that has an almost coincident open and
  close. A small, horizontal line on the chart represents the moment of
  market indecision, indicating a Doji’s appearance.
• Hammer: A hammer candlestick is a unique pattern that technical analysts
  use to indicate a possible bullish reversal in the trading of a financial
  security. A bullish reversal pattern formed by a small body and a long
  lower shadow. Its dependability becomes apparent when it emerges following
  a long period of decline and lines up with established price support
  levels.
• Shooting Star: A shooting star candlestick is a price pattern that occurs when the
  price of a security opens, rises, and then falls back down to a level
  close to the opening price. Shooting star candlestick patterns indicate a
  potential shift in price direction, suggesting a possible bearish trend.
  Shooting star candlesticks consist of a compact body, an extended upper
  tail, and a brief lower tail.

Multi-Candlestick Patterns

Multi-candlestick
patterns are formed by a combination of two or more consecutive candlesticks.
These patterns offer valuable insights into market reversals and continuations.
Examples of popular multi-candlestick patterns include:

• Engulfing Pattern: A bullish engulfing candlestick is a type of candlestick pattern
  characterized by a green candlestick that opens lower than the previous
  day’s close and closes higher than the previous day’s opening. One way to
  identify a potential trend reversal is by observing a small red
  candlestick followed by a larger green candlestick the next day. A
  reversal pattern where the second candle completely engulfs the prior
  candle.
• Three White Soldiers: This candlestick pattern is commonly used by traders to identify
  potential trend reversals or the continuation of an existing uptrend. A
  series of three candlesticks with minimal shadows at the top or bottom
  close at progressively higher levels, creating a distinct pattern.
• Evening Star: The Evening Star is a candlestick pattern that indicates a potential
  bearish reversal. It is formed by three candles: a large bullish
  candlestick, followed by a small-bodied candle, and finally a bearish
  candle. Evening Star patterns indicate that a price uptrend is approaching
  its conclusion. Contrary to the Evening Star, the Morning Star pattern is
  considered a bullish reversal candlestick pattern.

Applying Candlestick Patterns in Forex
Trading

Utilizing
Japanese Candlestick patterns in Forex trading can significantly enhance your
trading strategy. However, it’s essential to understand how to effectively
apply these patterns to maximize their benefits and mitigate risks.

• Timing Trades with Candlestick Patterns

One of the primary advantages of candlestick patterns is
their ability to help traders identify potential trade setups and market
reversals. By mastering the timing of trades using candlestick patterns,
traders can improve their entry and exit points, leading to more profitable
trades.

To effectively time trades, it’s crucial to combine
candlestick patterns with other technical indicators and price action analysis.
For example, if you spot a Hammer candlestick pattern forming after a prolonged
downtrend, you may wait for confirmation from other indicators, such as a
bullish divergence in the RSI or a bullish engulfing pattern on higher
timeframes, before entering a long position.

• Recognizing Price Levels

Another valuable aspect of candlestick patterns is their
ability to identify important support and resistance levels on the price chart.
By analyzing candlestick patterns near these key levels, traders can anticipate
potential reversals or breakouts, providing valuable trading opportunities.

For instance, if you observe a Doji pattern forming near a
significant support level on the EUR/USD chart, it could indicate indecision in
the market and a potential reversal in the downtrend. However, it’s essential
to wait for confirmation from other technical indicators or price action
signals before entering a trade to ensure higher probability setups.A personal
anecdote underscores the significance of patience when trading with Japanese
Candlestick patterns. Once, I noticed a Doji pattern forming on a major
currency pair, signaling potential market indecision and a reversal. While I
was tempted to enter a trade immediately, I exercised caution and waited for
confirmation from other technical indicators.

Ultimately,
my patience paid off as the Doji pattern was followed by a prolonged bearish
candle, indicating a continuation of the downtrend. By resisting the urge to
rush into a trade and carefully analyzing the market conditions, I avoided a
potentially costly mistake.

• Risk Management Using Candlestick Patterns

Effective risk management is crucial for long-term success
in Forex trading. While candlestick patterns can offer valuable insights into
market sentiment and potential price movements, they should always be used in
conjunction with proper risk management techniques.

Traders can manage risks using candlestick patterns by
setting stop-loss orders based on the pattern’s reliability and their risk
tolerance. For example, if you enter a trade based on a bullish engulfing
pattern, you may place your stop-loss below the low of the engulfing candle to
limit potential losses if the trade goes against you.

While
candlestick patterns provide valuable insights into market sentiment and price
movements, it’s essential to consider the broader market context when making
trading decisions. Factors such as economic news, geopolitical events, and
market sentiment can influence the reliability of candlestick patterns.

Ignoring
the larger market context may result in misleading signals and potential
financial losses. Therefore, traders should always assess candlestick patterns
in conjunction with other technical indicators, fundamental analysis, and
market trends to make well-rounded trading decisions.

In
conclusion, mastering the application of Japanese Candlestick patterns in Forex
trading requires a combination of technical analysis skills, risk management
strategies, and patience. By timing trades effectively, recognizing important
price levels, and considering the broader market context, traders can harness
the power of candlestick patterns to improve their trading performance and
achieve consistent profitability.

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

It’s a slight drop compared to December with it being the 25th straight month below the 50-year average of 98. There are lingering concerns surrounding the economy and inflation but small business owners are hoping for a soft landing still.

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 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.
• On the labour market side, the latest report beat
  expectations but we saw a contraction in full-time employment and a fall in
  wage growth.
• The Canadian PMIs improved in
  January although they remain both in contractionary territory.
• The market expects the BoC to start
  cutting rates in June.

USDCAD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that USDCAD remains
stuck in a big range between the 50% Fibonacci retracement level and
the resistance around
the 1.3540 level. There’s not much to do here other than waiting for a breakout
but in the meantime, traders can “play the range” by buying at support and
selling at resistance.

USDCAD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the pair recently
bounced on the 61.8% Fibonacci retracement level of the entire US NFP rally.
The sellers will want to see the price breaking lower to increase the bearish
bets into the 50% Fibonacci retracement level. The buyers, on the other hand,
will keep on stepping in around the 61.8% Fibonacci retracement level to
position for a rally into the 1.3540 resistance targeting a break above it.

USDCAD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the price
has been diverging with
the MACD
falling into the 61.8% Fibonacci retracement level. This is generally a sign of
weakening momentum often followed by pullbacks or reversals. In this case, it
might be a signal of an impending reversal, but the price will need to break
above the 1.35 handle to confirm it. In the meantime, we could have another
smaller range here.

Upcoming Events

Today we have the main event of the week, that is,
the US CPI report. On Thursday we will see latest US Jobless Claims figures and
the US Retail Sales. Finally, on Friday, we conclude the week with the US PPI
data and the University of Michigan Consumer Sentiment survey.

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

Registration is now live for Finance Magnates African Summit 2024 (FMAS:24), the year’s largest professional event bridging the B2B and B2C space. The landmark event is returning for its second year this May 27-29, helping connect regional and local providers with global brokers, brands, and much more.

2024 looms as a key year for Africa, boasting an impressive resume of companies, startups, and overall potential. These factors have led to an enormous amount of hype and interest from the online trading industry, culminating in the hosting of several notable events, including FMAS:24.

Register Today for FMAS:24 to Unlock Africa’s Potential!

Following last year’s inaugural event, FMAS has quickly developed itself into a household name as one of Africa’s largest events. The marquee event returns to Sandton City, a growing financial hub in South Africa. FMAS:24 will once again be held at the prestigious Sandton Convention Centre in Johannesburg.

This year’s event is expected to also draw a sizable attendance, including leading talent, the biggest local providers and names, and many other noteworthy experts yet again from around the world. Attendees can expect to take a deep dive into multiple verticals represented at length, such as the online trading, payments, digital assets, and fintech space.

With only a few months to go until the doors of this event swing open, the time to reserve your seat is now and can be done by accessing the following link.

What to Expect from FMAS:24?

FMAS:24 is a can’t miss event that starts with professionalism and includes a diverse range of individuals available for doing business with. Attendees can expect to network, engage, and connect face-to-face with the following participants:

• Forex/CFD Brokers
• Institutional Brokers
• Affiliates & IBs
• Traders & Investors
• Educators & Market Experts
• Fintech & Payments Brands
• Crypto & Digital Assets Businesses
• Technology & Liquidity Providers
• Press/Media
• Regulators
• Start-ups
• Investors/VCs

In terms of content, FMAS:24 has got you covered featuring a robust slate of panel discussions, webinars, workshops, keynote speeches, and much more. These informative sessions provide the ideal forum and platform for traders and industry professionals to learn and gain valuable insights into new trading techniques, technologies, and trends in Africa and beyond.

Look for the event to attract upwards of 2,000+ attendees, 70+ exhibitors, and 50+ speakers, making FMAS:24 one of the largest events in Africa in 2024. The summit kicks off with its annual Networking Blitz Party.

This premier networking party in South Africa represents an opportunity to engage and meet top-level leaders, speakers, and the biggest brands across multiple industries. Furthermore, the Blitz Party will showcase all the luxury that Sandton as well as everything that South Africa has to offer.

Prospective attendees can also explore last year’s event highlights, which featured parties, sessions, and many other things. This year will be no different, with the event providing no shortage of entertainment and networking opportunities for all attendees.

Stay tuned over the next month for more updates on FMAS:24, including the rollout of the detailed agenda, and more!

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

Amega is a global brokerage firm that has been
quickly rising within the world of finance.

Since
its inception, Amega’s goal has been to make trading simple and accessible to
traders of all levels, from beginner to professional. It accomplishes this by
introducing innovative technologies and providing streamlined services and
simple solutions to ensure a smooth experience from the moment of registration
to the closing of a trading position.

Regulation
– Security and transparency:

With a business
model that makes sure the client comes first, Amega has built a reputation
based on transparency and respect for regulation in order to ensure that the
rights of its investors are always protected. For the time being, Amega is
authorized, licensed, and regulated by the Mauritius Financial Services
Commission, under investment license No. GB22200548, however, it is working
towards acquiring additional licenses that will help solidify it as one of the
most trustworthy brokerage firms in the world.

Amega takes great
pride in making sure that client data, as well as their funds, are secured
behind multiple layers of protection and works only with reputable payment
solutions that are known for their safety and speed of execution.

Ensuring
equal treatment:

In an effort to
make trading more fair for all investors, Amega has abolished dated notions
such as VIP accounts, which promote better services only for clients who can
afford higher investments. Instead, Amega focuses on offering the same
excellent market conditions to all clients, regardless of the amount of their
investment

Promoting
freedom in trading strategies:

Amega
always measures its success by the success of its investors. As such, it firmly
believes that every trader should have access to the tools and strategies that
can afford them a better chance of fulfilling their potential. For this reason,
Amega encourages investors to use any trading strategy they believe can provide
them with an edge in the markets, including scalping, hedging, and even trading
robots (Expert Advisors).

By not imposing
limitations or bans on trading strategies, Amega offers a trading environment
where anyone can thrive.

Constant
Evolution:

As
a client-driven brokerage firm, Amega constantly evolves in order to add more
diversity to its extensive portfolio of tradable assets, as well as
implementing new technologies, features, and incentives to keep traders
motivated and allow them to reach beyond their limitations. Some of these
features include:

Loyalty
Cashback Program:

Amega
offers volume-based cashback for every single trade regardless of
the market direction. This initiative allows traders to better manage their
risk, compensate for spreads, and enhance their potential profitability. The
rewards earned from the Loyalty program can be withdrawn as physical cash once
the minimum withdrawal amount required is reached.

Amega
Bonus:

When
it comes to enhancing the equity of its investors, Amega offers an optional bonus of up to 150% of the deposit amount.

Contests:

Amega
periodically holds competitions in both the live markets and on demo accounts
to provide traders with the opportunity to test their skills and strategies and
the incentive to improve on them. These contests most often offer rewards in
the form of cash prizes or additional bonuses.

Global
Payment Solutions:

Amega
offers a diverse array of payment solutions and processors that cater to
clients from all over the world. These include a number of different methods
that can be used for deposits and withdrawals, including:

• Bank cards
• Wire Transfers
• E-Wallets
• QR Codes
• Crypto-Fiat.

These
methods offer fast and secure transactions from anywhere in the world.

Diverse
Accounts for every need:

Amega
offers three different account types that offer something different and cover
the needs of even the most demanding traders.

• Standard Account: The primary
  account type that offers excellent market conditions and benefits such as
  Cashback and the option of a deposit bonus,
• Raw Account: Offers ECN
  conditions, including spreads starting from 0 pips. A highly requested account
  type that is generally a fan-favorite. Deposit bonus is optional.
• Islamic Account: A swap-free
  account that is unique in its simplicity. There are no requirements for proof
  of religion or long waiting periods. With Amega, Islamic accounts can be
  created with just a few clicks. Also offers an optional deposit bonus.

Asset
Classes offered:

Amega
offers a number of tradable assets, making sure to add even more options as
demand rises.

Tradable
asset classes include:

• Forex (Currency Pairs)
• Stocks
• Indices
• Precious Metals
• Energies
• (Agricultural) Commodities

Outreach:

Since
the beginning, Amega has been active in many expos and trade fairs around the
world, including places like Thailand, Vietnam, and South Africa.

Amega
has also had the honor of hosting a number of successful seminars and webinars
with some of the biggest names in the industry from these countries.

The
ongoing relationship with some of the leading experts in the trading world is a
testament to the way Amega approaches its responsibility to investors and the
high quality of services it provides.

Market
updates and educational material

Amega wants
to make sure every client meets his full potential as an investor. This is why
it releases various articles and educational emails from the official “Amega
Geek” that help provide insight into the markets and serve as a base for
understanding various aspects of trading. Amega always encourages its clients
to learn about trading in their own ways and practice their skills and
strategies on a Demo account before jumping into the live markets.

Support:

Amega
has a dedicated support team that is ready to assist with any questions via
live chat, email, or call. They even offer a callback service, as well as a
comprehensive Help Center, which includes an evolving library of helpful
articles that cover everything from registration to actual trading. The
implementation of an automated assistant in the live chat ensures 24/7 support
in multiple languages.

Partnership:

Amega’s
award-winning Partnership Program offers custom conditions
tailor-made to the needs of each individual IB or affiliate, as well as one of
the most generous reward schemes in the market.

By
understanding the importance of a good IB/affiliate, Amega aims to create
long-lasting and mutually beneficial partnerships.

The
partnership program is separated into two types:

• The Revenue Share (RS) program
  which offers rewards based on the volume generated by referrals from their
  trades

and,

• The Cost Per Action (CPA) Program,
  which offers rewards based on the number of referrals who are onboarded.

Awards:

Amega
has had the distinct honor of receiving numerous awards that reflect its
outstanding services, as well as the constant improvement it undergoes. These
awards include:

• Rising Star in Forex (by World
  Business Outlook)
• Most Transparent Broker (by the
  Forex Broker Alliance)
• Best IB program (World Finance
  Awards)
• Best Islamic Account (World Forex
  Awards)

Conclusion:

Amega is constantly proving its commitment to
excellence through actions that speak louder than words.

By
providing a safe and transparent trading environment for investors of all
levels, constant upgrades that keep it at the top of its game, excellent market
conditions, and services that bring out the highest potential in its clients,
Amega has become a perfect example of what a broker should be.

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

Last
Friday, the Dow Jones diverged with the other major indices as the market
finished the day negative. Overall, the path of least resistance remains to the
upside given the pickup in economic data with even the leading indicators
turning around. There are still risks on the inflation front though, but the
market looks confident that even if we see some short-term reacceleration, the
Fed will just keep rates steady and if the economy is able to support them,
then it might be even better. Nonetheless, a hot CPI report could provide a
pullback, so that would be something to watch out for.

Dow Jones Technical
Analysis – Daily Timeframe

On the
daily chart, we can see that the Dow Jones is now at a key trendline, and
this is where we can expect the buyers to step in with a defined risk below the
trendline to position for new highs. The sellers, on the other hand, will want
to see the price breaking lower to invalidate the bullish setup and position
for a pullback into the 37777 support.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price has been breaking resistances and retesting them before going up in a
perfect textbook manner. We can also notice that the price is now retesting one
of those resistances now
turned support where we can also find the red 21 moving average for confluence. This
is where we will likely find the buyers bidding up the price while the sellers
will want to wait for a break to the downside to confirm the pullback into the
37777 support.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the Dow Jones consolidating between the
38550 support and the 38800 resistance. This looks like a market primed for a
big move as soon as we get a breakout on either side.

Upcoming Events

This week is relatively light on the data front with the
US CPI report being the main highlight. We start tomorrow with the release of
the US CPI where the market will want to see if there are indeed signs of a
reacceleration or not. On Thursday, we will get the latest US Jobless Claims
figures, while on Friday we conclude the week with the US PPI and the
University of Michigan Consumer Sentiment survey.

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

With the focus being on big US data this week, Treasuries will continue to stay under the spotlight once again. The rebound in 10-year yields since the non-farm payrolls is now turning the attention back to the January ceiling near 4.20%. For today, 10-year yields are down slightly by 1 bps to 4.175% but all eyes are on the US CPI data tomorrow.

That could be what bond sellers are looking for in raising the bar above the highlighted level of 4.20%. If so, that will have spillover impact to broader markets surely on the week.

Just keep in mind that the inflation numbers tomorrow isn’t the only big US data on the agenda this week. There will still be retail sales on Thursday, followed by producer prices and the University of Michigan consumer sentiment survey on Friday as well.

If yields are to turn lower and back away from the 4.20% mark towards 4% and below again, that should drag the dollar down along with it. As for risk trades, the S&P 500 is hoping for that to solidify a clear break above 5,000 from last week.

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

The upcoming week will be packed with economic events, but it will start with bank holidays in Japan and China due to the National Foundation Day and the Spring Festival, respectively.

On Tuesday, New Zealand will release its inflation expectations quarter-on-quarter (q/q) data. Last month, two-year ahead inflation expectations declined to 2.76%. While this remains above the Reserve Bank of New Zealand’s (RBNZ) 2% target, short-term expectations have seen a more pronounced drop, but long-term expectations (5 years ahead) have been much stickier. The continued strength in domestic inflation remains a concern for the RBNZ so the bank will closely monitor this survey to assess if the downward trend continues.

The focal point of the week will be the U.S. inflation data. Expectations suggest a 0.3% increase in core CPI month-on-month (m/m), compared to the previous 0.3%; a 0.2% rise in CPI m/m, down from the prior 0.3%; and a projected drop in CPI year-on-year (y/y) to 2.9% from 3.4%. While inflation in the U.S. appears to be moving in the desired direction overall and it will likely reach the Fed’s target of 2% eventually, concerns remain over the high levels of core inflation which ended the year at 3.9% from 5.7% at the start.

Although headline inflation is seeing a slowdown, attributable in part to declining gasoline prices and only moderated price increases for groceries, core inflation — which excludes food and energy prices — remains uncomfortably high for the Fed. The market has pushed back its expectations for rate cuts from March to May and this can shift even further depending on future data, for example to June.

The U.K. inflation data expected Wednesday will provide further insights into future monetary policy decisions by the Bank of England (BoE). At the previous meeting, the Bank surprised with a more hawkish stance, noting that while there are indications of decreasing inflation, it remains way above target and more time is needed to see progress. Some analysts speculate that the tightening cycle has ended, but rate cuts won’t happen very soon. The current market expectation is for rate cuts to start in August.

Projections for this week’s data are for headline inflation to increase to 4.2% from 4.0% y/y while core inflation is expected to rise to 5.2% from 5.1%. Although expectations are for the inflation downtrend to resume in the future, the BoE is currently fighting with persistent inflationary pressures.

On Thursday, Australia will get the employment change and unemployment rate data. At the last meeting the Reserve Bank of Australia (RBA) kept rates unchanged and stressed that: „The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks, and a further increase in interest rates cannot be ruled out.“

Inflation levels remain concerning, but many analysts argue that the tightening cycle ended. However, rate cuts are off the table for the near future.

The latest data suggests that the labor market in Australia is cooling down with supply and demand being more balanced. Analysts point out that the data for November and December was influenced by seasonal patterns, but going forward the labor market should see some softening. Westpac analysts expect an employment change of +15K for January, which would be a below-trend pace of growth.

The unemployment rate is likely to rise from 3.9% to 4.0%. Westpac argues that January is the most seasonal time of the year for the labor market and since the reopening from COVID-19 there were two dynamics that played an important role during this time in previous years: One is the fact that individuals found it easier to change jobs leading in an increase in „marginally attached workers“ after the holidays who were previously unemployed; and the second is the recovery of tourism which led to more workers taking time off over the holidays.

„January’s data should hence be interpreted carefully, given the risk that one–off dynamics may cause large swings in hours worked or unemployment,“ the Westpac analysts said.

Later on Thursday, we expect the U.S. retail sales data m/m. Last month, retail sales figures printed above expectations, but for this week’s release analysts anticipate a drop in core retail sales from 0.4% to 0.1% and a drop in retail sales from 0.6% to -0.2%.

Preliminary credit card spending data suggests a rise in January spending levels, but analysts from Wells Fargo expect a spending moderation as the year progresses due to softening in the labor market. „The unique factors of excess liquidity and easy access to cheap credit are tales of the past in the story of consumption,“ they said.

This article was written by Gina Constantin at www.forexlive.com.

Today is pretty much a placeholder as traders are all waiting on the US CPI data tomorrow. That is a good enough reason for price action to trend more sideways to start the week. And that is precisely what we’re getting so far today. The dollar is keeping steadier but the changes on the day are leaving a lot to be desired.

EUR/USD is still cornered by key technical levels just under 1.0800 as outlined here. Meanwhile, USD/JPY is holding just above 149.00 but not really finding much conviction to race towards 150.00 yet. Then, GBP/USD is trading back up to its recent consolidation range of 1.2600 to 1.2800 and awaiting its next move.

As for the commodity currencies, USD/CAD saw a test of its January highs rejected last week and is now holding just under its 200-day moving average of 1.3475. And AUD/USD is trading in and around the 0.6500 mark with topside limited by its own 100-day moving average at 0.6535 for now.

In other markets, US futures are flattish and not offering much help on the day. As for Treasuries, 10-year yields are down just 1 bps to 4.177% and still holding below the key technical line near 4.20%.

There’s some poking and prodding overall, so it is now up to the US CPI data to deliver the next set of hints for markets.

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

UPCOMING EVENTS:

• Tuesday:
  Japan
  PPI, UK Labour Market report, Switzerland CPI, German ZEW, US NFIB Small
  Business Optimism Index, US CPI.
• Wednesday:
  UK CPI,
  Eurozone Industrial Production.
• Thursday:
  Japan
  GDP, Australia Labour Market report, UK GDP, UK Industrial Production,
  Switzerland PPI, US Retail Sales, US Jobless Claims, US Industrial
  Production, US NAHB Housing Market Index, New Zealand Manufacturing PMI,
  PBoC MLF.
• Friday:
  UK
  Retail Sales, Switzerland Industrial Production, US PPI, US Housing Starts
  and Building Permits, US University of Michigan Consumer Sentiment.

Tuesday

The UK Unemployment Rate is expected to
tick higher to 4.0% vs. 3.9% prior.
The markets are likely to focus on wage growth with the Average Earnings
ex-Bonus seen at 6.0% vs. 6.6% prior, while the Average Earnings including
Bonus expected at 5.7% vs. 6.0% prior. The data will influence the market’s
pricing with a miss bringing rate cuts forward.

The Switzerland CPI Y/Y is expected at
1.6% vs. 1.7% prior. The inflation rate has been is the SNB’s 0-2% target
range since last summer and although the central bank expects a short term
increase, Chairman
Jordan said that their base case
scenario is that inflation should average below 2% this year.

The US CPI Y/Y is expected at 3.0% vs.
3.4% prior, while the M/M measure is seen at 0.2% vs. 0.2% prior. The Core CPI
Y/Y is expected at 3.8% vs. 3.9% prior, while the M/M reading is seen at 0.3%
vs. 0.3% prior. This is going to be the most important report for the week and,
as it’s been the case for the prior releases, it will influence the market’s
pricing with a miss bringing rate cuts forward and a beat pushing them backword.

Wednesday

The UK CPI Y/Y is expected at 4.2% vs.
4.0% prior, while the M/M reading is seen at -0.3% vs. 0.4% prior. The Core CPI
Y/Y is expected at 5.2% vs. 5.1% prior. The last
report surprised to the upside which
prompted a hawkish repricing in interest rates expectations. The BoE is
particularly focused on services inflation, so that would be the most important
metric to watch for. Again, a downside surprise should bring rate cuts
forward, while another upward surprise is likely to push them backword.

Thursday

The Australian Unemployment Rate is
expected to tick higher to 4.0% vs. 3.9% prior with 30K jobs added in January
vs. -65.1K in December. The last
report surprised to the downside with a
hefty contraction in full-time employment. Citing RBA’s Governor Bullock, the
central bank is “very, very focused” on employment but unless we get some
notable surprise, it’s unlikely to change much for the RBA.

The US Retail Sales M/M are expected at
-0.1% vs. 0.6% prior, while the ex-Autos M/M measure is seen at 0.3% vs. 0.4%
prior. The last
report surprised to the upside with the
Control Group coming in at a strong 0.8% vs. a previous positively revised 0.5%
reading. US Retail Sales have been strong for several months, but they are
expected to be weaker in January due to negative weather effects.

The US Jobless Claims continue to be one
of the most important releases every week as it’s a timelier indicator on the
state of the labour market. Initial Claims keep on hovering around cycle
lows, while Continuing Claims remain firm around cycle highs. This week the
consensus sees Initial Claims at 220K vs. 218K prior,
while Continuing Claims are seen at 1878K vs. 1871K prior.

The PBoC is expected to keep the MLF rate
unchanged at 2.50%. The central bank surprised
recently by cutting the RRR by 50bps vs. 25 bps expected and sparked a rally in
the stock market (although most of the gains were
erased in the following weeks). The PBoC will have an opportunity to surprise
the markets again with a cut and this time trigger a more sustained and
positive reaction.

Friday

The US PPI Y/Y is expected at 0.7% vs.
1.0% prior, while the M/M measure is seen at 0.1% vs. -0.1% prior. The Core PPI
Y/Y is expected at 1.6% vs. 1.8% prior, while the M/M reading is seen at 0.1%
vs. 0.0% prior. This report is unlikely to be that much market moving given
that the focus will be on the US CPI on Tuesday.

This article was written by Giuseppe Dellamotta at www.forexlive.com.