Daily F.X. Analysis, January 24 – Manufacturing PMI Figures In Focus! 

On the forex front, the U.S. Dollar Index slipped 0.1% on the day to 97.50. The EUR/USD gained 0.1% to 1.1095. The European Central Bank is expected to keep its monetary policy unchanged (deposit facility rate at -0.50% expected). 

Besides, the U.S. government bonds were steady, as the benchmark U.S. 10-year Treasury yield settled unchanged at 1.768%. The House Price Index for November declined to 0.2% from the expectations of 0.3% and weighed on the U.S. dollar. Let's monitor the ka

Economic Calendar - Manufacturing PMI Figures In Focus

BTC/USD - Daily Analysis 

The BTC/USD has stayed with a bearish since the week began. Losses after losses have been incurred where the bearish influence has pushed its way thought crucial several support zones, including $8,800, $8,500 and $8,450. 

The BTC/USD is trading at $8,304 after continuing the decline below Thursday’s support, nearly $8,450. Looking back at the trend last week, Bitcoin surged from levels around $7,700 to highs close to $9,200. 

BTC/USD - Daily Technical Levels

Support    Resistance 

8,544.55      8,761.56

8,450.08     8,884.1

8,233.07     9,101.11

Pivot Point 8,667.09

BTC/USD – Daily Forecast

Bitcoin traded in line with our expectations as the bearish bias lead its prices toward an 8,294 level. The leading crypto pair is now facing strong resistance around 8,438, while support prevails around 8,270. A bearish breakout of this level can also extend the selling trend until 8,125, which marks resistance to become a support level. The 20 and 50 periods of EMA are suggesting odds of the bearish trend in the BTC/USD.

EUR/USD – Eyes on Manufacturing PMI Figures 

The EUR/USD prices closed at 1.10542 after placing a high of 1.11087 and a low of 1.10363. Overall the movement of EUR/USD remained strongly bearish that day.

On Thursday, EUR/USD remained on the back foot against the US dollar after European Central Bank kept its rates unchanged and gave signals that the loose monetary policy would continue until the end of this year.

The ECB launched its first “strategic review” since 2003 to assess its formulation of price stability, which means to check whether the inflation target set by ECB was still appropriate.

 ECB said that the Net asset purchases, which is a part of the quantitative easing program that started in November 2019 with a monthly rate of 20B euros, will continue to run as long as necessary.

Christine Lagarde, the ECB President, said that lower interest rates would continue to be maintained until the inflation outlook reaches a level close but below 2% target.

The Strategic Review launched by ECB will be concluded at the end of 2020 and will include the tool kit of monetary policy, economic & monetary analyses, and quantitative formulation of price stability and communication practices.

The European Central Bank in the tenure of Mario Draghi cut its interest rates in September 2019 by ten basis points and introduces a quantitative easing program to stimulate the Eurozone economy and achieve the inflation target set by the bank.

Lagarde, on Thursday, said in a press conference that risks to the Eurozone economy tilted to the downside. But she also narrated that some of the uncertainty surrounding international trade has decreased, and due to this, the downside pressure on the euro area growth outlook has decreased to some extent.

After the speech of Lagarde, the EUR/USD pair dropped to its lowest level since 2nd December at 1.10363 amid the hints that monetary policy will remain loose till the end of the year. On the data front, at17:45 GMT, the Main Refinancing Rate from ECB remains unchanged at 0.0%. At 19:55 GMT, the Consumer Confidence from the Eurozone for January remained flat with the expectations of -8.

And from the American side, the unemployment claims for last week dropped to 211K against the expected 214K and supported the US dollar. However, at 20:00 GMT, the Leading Index for December fell to -0.3% from expected-0.2% and weighed on the US dollar.

EUR/USD - Daily Technical Levels

Support Resistance 

1.1025        1.1098

1.10994     1.1140

1.10952     1.1170

Pivot Point: 1.1067

EUR/USD – Daily Forecast

As anticipated earlier, the EUR/USD has violated the double bottom area of 1.1070 and has to lead the direct currency pair towards the 1.1030 level. In the daily timeframe, the EUR/USD has closed bearish engulfing candles along with a 50 EMA bearish crossover, which signals the odds of further selling trend in the EUR/USD. 

Besides, the EUR/USD has also violated the upward trendline, which supported the pair around 1.1070, and now the same level is likely to work as a resistance. On the lower side, the EUR/USD can go after 1.0990 today.

GBP/USD - Descending Triangle Breakout

The GBP/USD closed at 1.31207 after placing a high of 1.31507 and a low of 1.30969. Overall the movement of GBP/USD pair remained bearish throughout the day.

Finally, this time for real, Brexit is happening officially. Boris Johnson’s Brexit deal became law on Thursday after clearing all the hurdles in the UK parliament and receiving royal assent. Queen gave approval to Brexit in a short announcement and made the Brexit Bill as a law.

On Wednesday night after more than three years of disputes on how, when, and if Brexit would go ahead, the revised Brexit deal of PM Boris Johnson got approval in the UK’s Parliament. However, the bill yet requires to be signed by the European Union, but it could be done in the time between the UK is set to leave the EU on 31st January. The consent vote in the EU parliament would take place on 29 January.

Apart from Brexit concerns, the Bank of England is scheduled to hold its first monetary meeting on 30th January. There are various opinions in the market regarding the expectations of traders about a rate cut from the Bank of England in the upcoming session.

The stronger than expected wage growth figures on Tuesday have trimmed the BoE’s rate cut expectations this week. Moreover, the PMI data to be released on Friday will be the focus of attention for Pound traders in order to anticipate the BoE’s decision.

Ahead BoE’s meeting and in the absence of any significant economic data from the United Kingdom, the GBP/USD pair’s movement was dragged by the uncertainty that how will Brexit trade negotiations go between UK & EU.

The fact that the UK will definitely be leaving the European Union on 31st January clicked traders with the reality of Brexit, which will weigh on the UK’s economy. Leaving the single market and customs union will clearly cause some dislocation in Britain’s economy. The pair GBP/USD suffered on Thursday on the back of Brexit reality check by traders.

GBP/USD - Daily Technical Levels

Support Resistance 

1.3092     1.3147

1.3067     1.3177

1.3038     1.3201

Pivot Point: 1.3122

GBP/USD – Daily Forecast

On the 4 hour timeframe, the GBP/USD has violated the double top pattern, which was extending support around 1.3111. At the same time, the GBP/USD has closed Doji candles above 1.3111 resistance become support area, which is now likely to extend bullish bias until 1.3180 at first. Continuation of upward trend can lead the GBP/USD pair towards 1.3260 as well, but the pair has to breach above 1.3180 resistance area first. The GBP/USD may find support at 1.3035. 

All the best for today.