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22.01.2024 Market Report


EUR/USD extends its gains on the second successive day, trading around 1.0910 during the early European hours on Monday. The pair receives upward support on an improved risk appetite sentiment ahead of the ECB’s January monetary policy meeting scheduled to be released on Thursday.


GBP/USD kicks off the new week on a positive note, trading near 1.2722 during the early Monday. The rebound of the major pair is bolstered by the risk-on environment. However, the rising tension in the Red Sea might boost safe-haven asset demand and cap the upside of the pair.


On Friday’s session, the USD/JPY was observed to be mildly gaining, currently trading at 148.25, and will close a 2% winning week. Dominating the daily chart, bullish sentiments prevail, with the bulls firmly holding their stance but seem to be taking a breather. Next week, the bulls might get further momentum if the Bank of Japan (BoJ) does not give additional clues on its monetary policy plans.


The AUD/USD pair consolidates around the 0.6600 mark during the early Asian session on Monday. The pair benefits from a risk rally in global markets. However, the escalating geopolitical tension in the Middle East might lift the safe-haven US Dollar (USD) and might cap the upside of the AUD/USD. The pair currently trades around 0.6595, losing 0.03% on the day.


The NZD/USD pair gains momentum during the early Asian trading hours on Monday. The uptick of the pair is supported by the modest decline of the US Dollar (USD). The highlight this week will be New Zealand’s Consumer Price Index (CPI) for the fourth quarter (Q4) due on Wednesday. The pair currently trades around 0.6131, gaining 0.30% on the day. 


USD/CAD grapples to snap a two-day losing streak with starting the week trading higher near 1.3430 during the Asian hours on Monday. The lower Crude oil prices are putting pressure on the Canadian Dollar (CAD), which in turn, underpins the USD/CAD pair. Additionally, the US Dollar could potentially find support due to its safe-haven status, particularly amid concerns regarding maritime trade in the Red Sea. Both the US and the UK are looking to escalate their campaign without inciting a broader conflict with Iran, leading to more ships diverting away from the Suez Canal and the Red Sea.


USD/CHF could extend its winning streak that began on January 11, trading near 0.8680 during the Asian hours on Monday. However, the US Dollar (USD) could receive downward pressure as the market participants expect that the US Federal Reserve (Fed) might implement more significant policy rate reductions in 2024 compared to other major central banks worldwide.


Oil prices struggled to push ahead on Monday as economic headwinds pressured the global oil demand outlook and offset geopolitical concerns in the Middle East and an attack on a Russian fuel export terminal over the weekend.


Gold kicks off the new week on a weaker note and stalls a two-day-old recovery trend from the vicinity of the $2,000 psychological mark. Reduced bets for an early interest rate cut by the Fed, along with a generally positive risk tone, prompt fresh selling around the XAU/USD price.

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