Forex Signals Brief January 26: Holding the Breath for the US PCE Inflation
Yesterday started with the German Ifo Business Climate indicator which posted another deterioration, indicating that businesses are suffering in the Eurozone overall. It was a signal ahead of the ECB meeting, which held interest rates unchanged, however, markets took Lagarde’s comments in the press conference as a bearish signal.
The European Central Bank concluded the week for central banks, following the BOJ and Bank of Canada meetings earlier. The ECB maintained the Refinancing Rate at 4.50% as expected. According to the official statement released at the same time, the ECB tried to push back against market expectations for a rate decrease in the first half of 2023, but that was also predicted, which sent the Euro down.
Today’s Market Expectations
The day started with an inflation report and will end with one, so we expect volatility. The Tokyo CPI YoY from Japan is expected to show another slowdown to 1.9% this month from 2.1% previously. This will be the second 2-point decline after the decline from 2.3% to 2.1% in December. Bank of Japan is looking at this report and will be less inclined to change the policy.
Later in the European session, we have the GfK Consumer Confidence from the UK and the German GfK Consumer Climate, both of which are expected to show a slight improvement but remain negative. However, after yesterday’s miss in the German German Ifo Business Climate, the chances are that we might see a miss in the report from Germany today.
The US PCE inflation report will be released in the US session and is the most important report for the week. The headline number is predicted to remain unchanged on an annualized basis at 2.6%, while the PCE MoM is expected to increase by 0.2% in December, up from 0.1% in November. The Core PCE YoY is forecast to slow to 3.0% vs. 3.2% in November, while the core PCE MoM is expected to be 0.2% vs. 0.1% previously.
BTC/USD – Daily Chart
The 100 SMA Holds Again for Ethereum
ETHEREUM has been bearish too after turning lower from above $2,700 following the introduction of BTC ETFs, although the general trend remains bullish since it is not making lower lows yet. The price fell below the 20 daily SMA (gray) yesterday, but it is still above the 50 SMA (yellow), which remains the ultimate support indicator during deeper pullbacks like this one. We’re hoping to open another long-term buy ETH signal near the 50 SMA, but we’ll see how the price movement plays out there.
Ethereum – Daily Chart
- ETH Buy Signal
- Entry Price: $2,290
- Stop Loss: $2,590
- Take Profit: $1,750
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