Forex Today: Chinese data could lend support to the risk complex

Pablo Piovano FXStreet

The US Dollar maintained its bearish tone unchanged and extended its weekly corrective decline on the back of shrinking yields, while investors remained focused on fundamentals and the Fed’s decision in January.

Here is what you need to know on Friday, January 17:

The US Dollar Index (DXY) added to the ongoing multi-day retracement on Thursday, breaking below the 109.00 support zone once again amid further weakness in US yields across the curve. A busy docket on Friday will feature Housing Starts, Building Permits, Industrial and Manufacturing Production, as well as Net Long-term TIC Flows.

EUR/USD gave it a go to the 1.0300 region, although the move fizzled out soon afterwards, eventually ending the day with marginal gains. The EMU’s Current Account results and the final Inflation Rate will take centre stage along with the speech by the ECB’s Cipollone.

GBP/USD advanced for the fourth day in a row, managing well to keep business well above the 1.2200 yardstick. UK Retail Sales will be at the centre of the debate across the Channel at the end of the week.

Further repricing of rate hikes by the BoJ lent support to the Japanese yen and sparked a deeper retracement in USD/JPY, this time approaching the 155.00 mark. The weekly Foreign Bond Investment figures will be only due.

Surprisingly, AUD/USD traded on the defensive on Thursday, briefly breaking below the 0.6200 support despite the inconclusive Dollar and a solid jobs report in Oz. Focus should remain on the slew of Chinese data due on Friday.

Alleviating geopolitical concerns following the Israel-Hamas ceasefire weighed on crude oil prices and dragged prices of WTI to the vicinity of the $77.00 mark per barrel.

Gold prices extended further their uptick, regaining the $2,700 mark per troy ounce and beyond on the back of the Dollar’s irresolute price action and declining US yields across the board. Silver prices, in the meantime, rose to five-week highs in levels just shy of the $31.00 mark per ounce.

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

EUR/USD holds lower ground near 1.1850 ahead of EU/ US data

EUR/USD remains in the negative territory for the fourth successive session, trading around 1.1850 in European trading on Friday. A broadly cautious market environment paired with modest US Dollar demand undermines the pair ahead of the Eurozone GDP second estimate and the critical US CPI data.

GBP/USD keeps losses around 1.3600, awaits US CPI for fresh impetus

GBP/USD holds moderate losses at around 1.3600 in the European session on Friday, though it lacks bearish conviction. The US Dollar remains supported amid softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold trims intraday gains to $5,000 as US inflation data loom

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains heading into the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.