Forex Signals Brief for Jan 28: Markets Begin to Stutter

US Wrap

US markets had a wild day, to say the least, with most of the action in stocks and the USD.

We of course had the FOMC, which remained very much on the dovish side of things. As we’ve been saying for some time, they are now all out of bullets while the printing press keeps on running hot.

But it wasn’t the FOMC that really impacted the Dollar today – it was a big turn in equities. There were are few key NASDAQ names, that took a beating, led by Facebook which said that it is losing users. While there is also plenty of attention on the small-cap names that are running hot including Gamestop which is charging and blowing up shorts in the process.

At the same time, the falls led to a spike in the VIX, a key measure of market volatility, with the index now up to 37, which is a similar level to what we saw pre-election. 

Politics remains a key theme at the moment, as Biden appears to be trying to run the country through executive orders. Interestingly he previously suggested, “You Can’t Legislate By Executive Orders Unless You’re A Dictator”. Biden has now issued 37 executive orders in under a week. To put that in context, President Trump signed four, Obama signed five, George W. Bush signed none, and Bill Clinton signed one in their first week.

As we’ve said before, if your economic policies center on destroying jobs and raising taxes all by executive order, markets and capital in general, will be the ones that cast the final vote.

The Data Agenda

Today’s focus is on some data out of the US, with most interest still being on jobless claims.

I suspect we are not going to see much downward pressure on this number in the near future. While we are starting to see some US states open up, namely NY and California, the jobs outlook is looking decidedly worse.

At the same time, US GDP is expected to come in at 4% over Q4, which suggests the economy has stabilised somewhat. We also get home sales data out of the US. 

Forex Signal Update

The FX Leaders Team finished with 3 wins from 4 trades as the majors all performed strongly for us.

Make sure you follow our live signals as volatility is on the rise this week.

EUR/GBP – Active Signal

The EUR/GBP is trending lower and we are short here looking for the lows to be tested once again.

USD – Watching

The Greenback has been the one to watch this week and we can see that the US Dollar Index jumped yesterday.

Cryptocurrency Update

BTC was soft yesterday and I remain quite bearish on it in the short term.

I am fully expecting a test of this $30,000 support level as we can see the descending triangle pattern is building momentum. Is today the day for a breakdown?