Brad Alexander
FX Large Limited
Last week we looked at the fallout on all US Stock Indices after Jerome Powell indicated no interest rate cuts in the near future.
This is a good opportunity to buy the dip, as we say, and investors may be doing that right now.
Price action bounced off support but you may want to wait for more confirmation.
We have a lot of economic news this week but the most important will be the CPI reports from Canada and the UK.
If inflation is lower, towards the goal of 2%, the central banks will be more inclined to lower interest rates, and vice versa.
This gives us some counter-trend entry opportunities as strength on CAD is mixed against all other currencies.
For example, if the news drives price action on NZDCAD higher, we may have an opportunity to go short.
The opposite can be said for USDCAD.
The news may affect GBP in the same way but we only have a couple of trend trading opportunities with most pairs in consolidation.
We see price action on GBPUSD at this upper trend line in a bearish channel and the stochastic oscillator overbought and moving down.
Price action on GBPUSD is clearly in a downtrend on the back of USD strength.
This may change based on Powell’s comments.
Speaking of the Bank of England, if CPI is lower than expected, there may be an opportunity to lower interest rates and drive the FTSE100 lower.
While we may offer market commentary based on fundamental or technical analysis, we do not offer trading advice and cannot be held liable for any decisions taken by viewers and readers of our material.
Recommended Content
Editors’ Picks
EUR/USD turns south to near 1.0350 as risk sentiment sours
EUR/USD is back in the red at around 1.0350 in the European trading hours on Thursday. The pair erased gains amid a resurgent US Dollar demand and worsening market mood. Investors stay cautious at the onset of 2025, awaiting the US jobs data for fresh incentives.
GBP/USD battles 1.2500 amid cautious markets
GBP/USD reverses gains and holds steady near 1.2500 in the European session on Thursday. Persistent US Dollar demand and a risk-averse market environment remain a drag on the pair. Traders await the return of full markets before placing fresh bets to begin 2025.
Gold price appreciates due to a potential central bank purchases this year
Gold price rises for the third consecutive session on Thursday, following a more than 27% increase in 2024, marking its best performance since 2010. This upward momentum has been driven by US monetary easing, persistent geopolitical tensions, and record central bank purchases.
These three narratives could fuel crypto in 2025, experts say
Crypto market experienced higher adoption and inflow of institutional capital in 2024. Experts predict the trends to look forward to in 2025, as the market matures and the Bitcoin bull run continues.
Three Fundamentals: Year-end flows, Jobless Claims and ISM Manufacturing PMI stand out Premium
Money managers may adjust their portfolios ahead of the year-end. Weekly US Jobless Claims serve as the first meaningful release in 2025. The ISM Manufacturing PMI provides an initial indication ahead of Nonfarm Payrolls.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.