MARKET OVERVIEW
Markets are on watch for the FED’s rate decision later this week. Trump has called for an immediate rate cut, although markets widely expect the FOMC to hold rates this month. Will Trump’s demand influence the FED to reconsider its stance? Traders relying on data-driven forex trading should closely monitor this decision.
There are differing views among analysts, largely due to the market’s current focus on how Trump’s inflationary policies might impact the economy.
Dollar prices rose after Trump announced plans to impose tariffs on Colombia, following the country’s refusal to allow U.S. military planes carrying deported migrants to land. Concerns about tariffs have resurfaced, with fears that their implementation could weigh on precious metals and significantly impact other currencies. If Trump fulfills his promise to impose broad international tariffs, it could have a lasting effect on global markets, impacting cross-currency trading opportunities.
In addition to the FED decision on Thursday, other significant events are lined up for this week.
- On Tuesday, SNB Chairman Jordan is expected to outline the central bank’s direction for the Franc, alongside the U.S. CB Consumer Confidence report.
Wednesday will see Australia’s CPI release, the BOE Governor’s speech, and the Bank of Canada’s rate decision. - Thursday includes the Eurozone monetary policy statement with the ECB press conference, as well as the U.S. Advance GDP and unemployment data.
- Finally, on Friday, the European CPI, Canadian GDP, U.S. Core PCE Price Index, and Employment Cost Index will be released.
GOLD
Gold prices are currently experiencing increased selling momentum, as indicated by the MACD. However, the RSI suggests a potential turnaround before momentum normalizes. Overall, price action remains very bullish, with the previous swing low still holding as key support. Traders using long-term forex plans should consider gold as a hedge against dollar volatility.
If Trump proceeds with inflationary policies, analysts and markets may turn to gold as a hedge against Dollar risks. While gold prices are expected to rise in the long term, there could be a near-term dip as analysts purchase Dollars before the anticipated price surge. Trump’s unpredictability is expected to heighten market volatility, potentially altering overall trends.
SILVER
Silver prices remain consolidated and are likely to stay in this range until a catalyst prompts a directional move. Silver prices are being kept low for now, potentially serving as a hedge against gold once it reaches overpriced levels. As silver approaches historic highs, another bullish run is anticipated.
The RSI indicates oversold conditions, while the MACD suggests a possible continuation of selling volume. Overall price action remains bullish, as the consolidation respects bullish structures, with 29.9000 acting as effective support. Scalping bots for forex can help traders capitalize on short-term movements in silver.
DXY
The Dollar is seeing increased bullish movement ahead of the FED rate decision. While the RSI signals overbought conditions, the MACD reflects growing bullish volume, suggesting a continuation. However, overall price action remains bearish, with 107.834 serving as strong resistance.
Fundamentally, the Dollar is expected to strengthen further as tariff concerns resurface, creating new cross-currency trading opportunities.
GBPUSD
The Pound has gained significantly, breaking above its previous swing high and shifting overall momentum, as previously anticipated. Prices have reached 1.24754, exceeding initial expectations. The MACD indicates a potential turnaround, while the RSI shows overbought conditions, suggesting a normalization of prices soon.
While more short-term buying is expected, the Pound is fundamentally poised for weakness in the long term. Traders using best brokers for MetaTrader can access advanced tools to manage GBP volatility.
AUDUSD
The Australian Dollar opened with a price gap, suggesting a possible return to fill it. However, if prices fail to reach 0.63407, a decline is likely. The RSI is recovering from oversold conditions, signaling a momentum shift, while the MACD reflects growing buying volume.
Overall, price action remains bullish. However, a move below the upper boundary of the previous consolidation zone would signal a return to bearish momentum. Implementing data-driven forex trading strategies can help navigate these fluctuations.
NZDUSD
The Kiwi Dollar is declining, with the RSI recovering from oversold conditions and signaling a shift in momentum similar to the Aussie Dollar. The MACD shows rising bearish volume. If prices fall below 0.56859, a continuation under the consolidation zone’s upper boundary is expected, signaling a broader return to bearish momentum. Scalping bots for forex may help capture short-term profit opportunities in the NZD market.
EURUSD
Euro prices have returned below 1.04672, with the MACD crossing to suggest growing bearish volume. However, the RSI indicates oversold conditions without a clear directional bias. While short-term buying may occur due to bullish momentum, a break below the previous swing low would confirm a bearish shift. Cross-currency trading strategies should consider the broader implications of a weakening Euro.
USDJPY
On Friday, the BOJ raised interest rates by 25 basis points to 0.5%, marking the highest short-term borrowing costs in 16 years. The central bank projected inflation reaching its 2% target in the latter half of its forecast period, suggesting potential further rate hikes.
However, BOJ Governor Kazuo Ueda provided little guidance on the timing or pace of future increases. The Yen remains consolidated, partly due to Trump’s unpredictability. The Yen is expected to strengthen due to bullish market structure, but a break above the swing high could lead to increased Dollar buying.
Both the MACD and RSI lack clear direction, reflecting the current consolidation. Best brokers for MetaTrader can help traders make informed decisions in uncertain markets.
USDCHF
The Franc remains below 0.90743, despite the Dollar’s recent gains. The MACD hints at a bullish move but lacks volume, while the RSI has yet to show a clear directional bias. Price action remains stable, potentially serving as a hedge against other assets. Long-term forex plans should account for potential reversals in USDCHF.
USDCAD
The Canadian Dollar is expected to weaken further after Trump threatened tariffs on Colombia. If Trump follows through, the likelihood of imposing tariffs on Canada, Mexico, and China by February 1 increases significantly. This would weaken the CAD further while strengthening the Dollar.
The MACD reflects increasing volume, while the RSI is quickly normalizing, indicating a potential momentum shift. Although the market opened with a gap—suggesting an order fill—overall, the market remains bullish in the long term. Data-driven forex trading strategies can provide a structured approach to managing this volatility.
COT REPORT ANALYSIS
- AUD – WEAK (4/5)
- GBP – WEAK (5/5)
- CAD – WEAK (4/5)
- EUR – WEAK (5/5)
- JPY – WEAK (3/5)
- CHF – WEAK (5/5)
- USD – STRONG (4/5)
- NZD – WEAK (4/5)
- GOLD – STRONG (5/5)
- SILVER – STRONG (5/5)