1. Home
  2. /News
  3. /Forex Signals Brief January 8: Will the CPI Keep the USD Rally Going?

Forex Signals Brief January 8: Will the CPI Keep the USD Rally Going?

Skerdian Meta•Monday, January 8, 2024•3 min read

Last week was expected to be quieter than it was, being the first week of the year, but markets were already agitated so they started the year in full force. The final services PMI numbers from Europe were revised higher for December, but that didn’t help the Euro much, as core inflation posted another decline for December, giving the ECB little room to hide. So, markets are already anticipating several rate cuts from them this year.

However, all the attention was on the USD and the labour market, with several jobs reports from the US. It started with a soft JOLTS job openings report which fell to the lowest levels in 2 years, to be followed by positive ADP and unemployment claims on Thursday. However the Non-Farm Payrolls (NFP) and the unemployment rate from the US were more mixed, but they did lean on the positive side, which kept the USD bullish for most 0f the week.

This Week’s Market Expectations

While last week markets were mostly focused on the employment reports from the US, this week the attention will be on the CPI (consumer price index) reports, particularly from the US. Today the Swiss CPI is expected to show another decline in December at -0.1%, coming from a -0.2% decline in November. The retail sales from the Eurozone and Switzerland are also expected to be negative, with the Eurozone number expected at -0.3%.

Monday:

  • Swiss Consumer Price Index (CPI) for December.
  • Eurozone Retail Sales for November.
  • Sentix Investor Confidence for January.
  • Japanese Tokyo Consumer Price Index (CPI) for December.

Tuesday:

  • Energy Information Administration (EIA) Short-Term Energy Outlook (STEO).
  • German Industrial Output for November.

Wednesday:

  • CNN Republican Debate.
  • Chinese Consumer Price Index (CPI) and Producer Price Index (PPI) for December.

Thursday:

  • U.S. Consumer Price Index (CPI) for December.
  • U.S. Initial Jobless Claims for the week ending January 5th.

Friday:

  • UK Gross Domestic Product (GDP) for November.
  • U.S. Producer Price Index (PPI) Final Demand for December.

Last week markets were quite volatile, with the USD making a bullish reversal and pushing higher for most of the week, however, this wasn’t straightforward and there were periods of retreating lower and risk assets moving higher. As a result of this volatility, we opened many trading signals, with the total number being 29 forex signals. Early in the week, we got caught on the wrong side as the USD retreated but adjusted later in the week and made up for it.

The 20 SMA Holds As Support for Gold

Last week we saw a reversal lower in Gold, as the USD started to make a comeback, although the trend remains optimistic overall. US Treasury yields reversed hgiher, contributing to a stronger US Dollar which was the reason for the decrease in XAU/USD. However, the slide was halted at the 20 SMA (gray) on the daily chart. This week we have the CPI inflation numbers from the US, which will decide whether Gold breaks below the 20 SMA or if it will resume the uptrend.

XAU/USD – Daily chart

Is the Retreat in EUR/USD Over?

EUR/USD stayed solid until the end of last year, as the USD continued to fall as a result of dovish Fed rhetoric, while buyers pushed the price over 1.11. The ECB’s unwillingness to announce rate cuts aided the bullish case in this pair. With the new year, however, there was a turnaround, and this pair was under pressure for the majority of the week.

USD/JPY – 240 minute chart 

Cryptocurrency Update

Bitcoin COntinues trading Around $44,000

Last year, the cryptocurrency market prospered and became a safe refuge for international assets. Early last year, comments that the SEC would approve a Bitcoin EFT boosted sentiment even further, and cryptocurrencies continued to surge until the end of the year. However, on Wednesday, BTC fell to $40,000 lows following comments that the SEC might refuse the ETF, but this proved to be a rumour, and the slide was halted at the 50 daily SMA (yellow). Eventually, we saw a reversal and a return above $44,000 where this pair continues to trade.

BTC/USD – Daily Chart 

Ethereum Retesting the 50 Daily SMA

This year, ETH/USD has reached new highs, proving that the trend has been favorable all year, with moving averages continuing to push the lows higher. Buyers returned this week after a brief retreat, but they were unable to break through last week’s high of $2,500, and we witnessed a decline to $2,127 on Wednesday, but the price reversed back up yesterday, with the 50 SMA (yellow) functioning as support on the daily chart.

Ethereum – Daily Chart
  • ETH Buy Signal
  • Entry Price: $1,947.38
  • Stop Loss: $1,490
  • Take Profit: $2,500
Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
img
Forex Brief March 19: BOJ and Fed Set to Drive Forex and Stock Market Volatility!
15 hours ago
img
Gold Hits Record $3,037 as Traders Bet on Fed and Geopolitical Risks
18 hours ago
img
Will Gold Price Hit $4,000 by Late 2025? Silver Lags but Gains Momentum
2 days ago
Comments
0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments

Add 3442

Add 3440

XM

Best Forex Brokers