Daily F.X. Analysis, January 27 – German Ifo Business Climate In Highlights!
By Eaglefx On January 27, 2020 in Daily Market Analysis
On the forex front, the U.S. Dollar Index gained 0.2% on the day to 97.85. The Japanese yen strengthened for a four straight session, as the spread of the deadly coronavirus weighed on market sentiment. USD/JPY dipped 0.2% to 109.28.
Later today, December U.S. new home sales will be reported (up to an annualized rate of 731,000 units expected). European stocks rebounded, with the Stoxx Europe 600 Index gaining 0.9%. Germany's DAX rose 1.4%, the U.K.'s FTSE 100 added 1.0%, and France's CAC was up 0.9%.
Economic Calendar - German Ifo Business Climate Ahead
BTC/USD - Daily Analysis
As the weekly close surrounded, the BTC/USD price reached above $8,500 after using the previous day trading in the $8,200 to $8,300 limit. At the time of writing, bulls are trying to drive through the $8,500 to $8,650 resistance zone to inch near a daily lower high at $8,800.
On the 6-hour timeframe, the MACD (moving average convergence divergence) has exhibited a bull crossover, and the histogram has shifted into the positive, bestowing a sharp uptick in momentum.
In case, the BTC/USD prices can develop above $8,650 and cross above $8,800 from resistance; the exchange rate could surge to $9,100, which follows up with the top arm of the Bollinger Band tool.
BTC/USD - Daily Technical Levels
Support Resistance
8177.32 8464.35
8055.53 8629.59
7768.5 8916.62
Pivot Point 8342.56
BTC/USD – Daily Forecast
The BTC/USD is trading with a bullish bias above a strong support level of 8,600 with resistance around 8,685 level. On the higher, bullish breakout of 8,685 can lead the BTC/USD prices towards 8,833.
EUR/USD – Eyes on Manufacturing PMI Figures
The EUR/USD closed at 1.10255 after placing a high of 1.10617 and a low of 1.10196. Overall the movement of EUR/USD pair remained bearish throughout the day.
The EUR/USD dropped near the 8th week lowest level of 1.10196 on Friday on the back of broad-based U.S. dollar strength and weaker than expected Services PMI from Eurozone.
At 13:15 GMT, the French Flash Services PMI for January came in as 51.7 against the expectations of 52.2 and weighed on the single currency. However, the Manufacturing PMI from France exceeded the expectation of 50.6 and came in as 51.0 in January and supported Euro.
At 13:30 GMT, the German Flash Manufacturing PMI came in as 45.2 against the expectations of 44.5. The German Flash Services PMI for January exceeded the expectations of 53.0 and came in as 54.2 to support Euro currency.
At 14:00 GMT, the Flash Manufacturing PMI from the whole bloc for January came in as 47.8 in comparison of forecasted 46.9. The Flash Services PMI from entire bloc fell short of expected 52.9 and came in as 52.2.
The Belgian Business Climate from the National Bank of Belgian for January showed a decline by 2.0 against the expected decline by 3.0 and supported the single currency Euro.
Though the Manufacturing PMI from the whole bloc and France & Germany came in favor of Euro, the Services PMI remained disappointed. Better than expected, PMI from Germany indicated growth in the German Manufacturing and Services sector. However, the fact that Manufacturing PMI came in less than 50.0 from Germany, it means that the manufacturing sector contracted in January but less than expectations.
Weaker than expected Services PMI from the whole bloc weighed on Euro currency, and hence, EUR/USD started to move in a downward direction. On the other hand, during a panel discussion at World Economic Forum on Friday, the President of European Central Bank, Christine Lagarde, said that ECB noted a really minor change in inflation.
However, the pair EUR/USD fell to near its eight week's lowest level after the U.S. Treasury Secretary Steven Mnuchin argued over Ms. Lagarde's view on energy transition. According to Lagarde, central banks should lead to making economic modeling that could forecast the cost of protecting the environment.
She said that companies, rating agencies, and banks should do medium-term forecasting instead of quarterly forecasts and should start thinking in terms of 30 years out. However, Mnuchin argued that forecasting the cost of protecting the environment was not possible. He said that it would result in a tax on hard-working people. This weighed on single currency Euro against U.S. dollar, and hence, pair EUR/USD dropped at the ending day of the week.
EUR/USD - Daily Technical Levels
Support Resistance
1.1019 1.1035
1.1012 1.1044
1.1003 1.10 51
Pivot Point: 1.1028
EUR/USD – Daily Forecast
Bearish bias for EUR/USD is still dominant in the market as the pair has closed below 1.10750 double bottom level. Now, this level is likely to work as a resistance for the EUR/USD pair. Today, the pair is likely to keep the bearish momentum below 1.1035 level with immediate support around 1.1005 and 1.0995.
GBP/USD - Descending Triangle Breakout
The GBP/USD closed at 1.30705 after placing a high of 1.31724 and a low of 1.30564. Overall the movement of GBP/USD pair remained bearish throughout the day.
At 14:30 GMT, the Flash Manufacturing PMI from Great Britain for January came in as 49.8 against the forecasted 48.8. Britain's Flash Services PMI for January exceeded the expectations of 51.1 and came in as 52.9, which supported British Pound.
On the back of stronger than expected figures of PMI from the United Kingdom, the Sterling jumped to its highest level since January 7. The pair rose near 1.3173 level on Friday due to robust economic data from the British side.
The Traders got fresh clues after the release of stronger than expected PIMI that Bank of England would not go for another rate cut in its next meeting. This gave strength to Sterling against the U.S. dollar and moved GBP/USD on the bullish trend.
However, the bullish trend did not last for long, and the pair GBP/USD started to fell due to the strength of the U.S. dollar across the board. The U.S. dollar had a buying interest in the market on Friday due to an increase in prices of Dollar Index, which was above 98 level on Friday.
The strength of Dollar was gained by the surprising expansion of the U.S. Services sector in January. At 19:45 GMT, the Flash Services PMI from the United States came in as 53.2 against the expected 52.9. The strong U.S. dollar weighed on GBP/USD pair and dragged its prices for 2nd consecutive day on Friday.
GBP/USD - Daily Technical Levels
Support Resistance
1.3028 1.3146
1.2984 1.322
1.2865 1.3338
Pivot Point 1.3102
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.