Daily Market Outlook, 17th of January, 2025

DAILY FOREX MARKET TECHNICAL ANALYZING REPORT

January 17th Financial News

Summary:

Canada’s counter-tariff plan would target U.S. aluminum and steel products; the U.S. says the Gaza ceasefire will start as planned despite a ‘loose end’; French Prime Minister Francois Bayrou survives a no-confidence vote in parliament…

Quick Facts

1. Canada’s counter-tariff plan would target U.S. aluminum and steel.
2. U.S. says Gaza ceasefire to start as planned despite ‘loose end’.
3. French PM Passes survives a no-confidence vote.
4. Policy easing is seen as appropriate if baseline projection is confirmed.
5. U.S. mortgage rates climb to 7.04%, hitting an 8-month high.
6. ECB officials saw more easing as appropriate if baseline holds.
7. U.S. retail sales broadly advance, capping a strong holiday season.

 

New Details

Canada’s counter-tariff plan would target U.S. aluminum and steel
A source revealed that Canada’s draft plan to counter U.S. tariffs could be implemented in phases. The Canadian government is prepared to impose counter-tariffs on all U.S. steel and aluminum products if necessary. Prime Minister Trudeau’s administration is exploring options, depending on the actions of U.S. President-elect Trump. if Trump imposes any tariffs on Canada, Ottawa’s response might be to immediately target around 10 well-known products, such as Florida orange juice and Kentucky bourbon, to draw U.S. attention, according to informed sources.
 
U.S. says Gaza ceasefire to start as planned despite ‘loose end’
The Gaza Strip ceasefire should begin on January 19 as planned, the need for negotiators to tie up a “loose end” at the last minute, U.S. Secretary of State Antony Blinken said on January 16. He noted the challenging negotiation process and said the parties are working through the remaining obstacles. The Israel-Hamas ceasefire agreement, brokered by Qatar, Egypt, and the U.S., was announced by Qatari Prime Minister and Minister of Foreign Affairs Mohammed in Doha on January 15. The ceasefire will be implemented in three phases, starting January 19.
 
French PM Passes survives a no-confidence vote
France’s National Assembly on January 16 rejected a no-confidence motion against the government proposed by some left-wing parties. The motion failed, securing only 131 votes, far short of the 289 needed to pass. As a result, the new government led by Prime Minister Francois Bayrou remains in place.
 
Policy easing is seen as appropriate if baseline projection is confirmed
European Central Bank (ECB) policymakers believe interest rates can be further reduced if consumer price trends align with expectations, according to the minutes of the ECB’s last policy meeting. “Given the current uncertainties and the range of factors that could hinder inflation from quickly falling to target levels, it remains necessary to exercise caution,” the minutes released on Thursday show. “Nevertheless, if the baseline inflation forecast is confirmed over the coming months and quarters, gradually reducing policy restrictions would be deemed appropriate.”
Markets widely anticipate the fifth rate cut of the current easing cycle in the next ECB meeting in two weeks. Although inflation saw a slight uptick last month, policymakers remain confident in achieving the 2% target by 2025 and are still concerned about the sluggish European economy.
 
U.S. mortgage rates climb to 7.04%, hitting an 8-month high
U.S. mortgage rates rose above 7% for the first time since May, Freddie Mac reported on Thursday. The average rate on 30-year fixed-rate mortgages rose to 7.04%, up from 6.93% the previous week. Borrowing costs have steadily climbed in recent weeks, adding to the financial burden on home-buyers. Cold weather in parts of the U.S. and wildfires in California have further pressured housing demand.
 
The four weeks ending January 12 saw an 8.4% decline in pending sales of existing homes, marking the largest year-over-year drop since October 2023, according to Redfin Corp. For buyers with a $600,000 loan, the monthly mortgage payment now averages $4,008, higher than $3,628 for those who locked in rates when they hit a two-year low at the end of September.
Last Friday’s strong employment data pushed the 10-year U.S. Treasury yield higher. However, weaker-than-expected inflation data earlier this week caused yields to decline, fueling speculation that the Federal Reserve might cut rates sooner than anticipated.
 
ECB officials saw more easing as appropriate if baseline holds
The European Central Bank on January 16 released the minutes of its December meeting, which revealed that a cautious and gradual pace of rate cuts aligns with the general consensus. Policymakers agreed that more “check points” had to be passed to ascertain whether disinflation remained on track and kept open the optionality to make adjustments along the way. Some members advocated for considering larger rate cuts, while others emphasized the need for a step-by-step approach to assess whether policy rates have reached a roughly neutral level, taking into account transmission lags.
 
More generally, it was advisable to draw on a broad range of approaches to estimate or model the natural rate and assess the restrictiveness of policy, and to also look at the interplay of output, inflation and interest rates. It was clear that “the Governing Council should not let its guard down in the final stretch of disinflation, particularly as some assumptions underlying the projections still needed to be corroborated by hard data and were conditional on monetary policy making its contribution and working its way through the economy.
 
The last step toward achieving the inflation target would be a moderation in services inflation, which was projected to decrease noticeably in the first half of 2025.
A cautious approach was still warranted in view of the prevailing uncertainties and the existence of a number of factors that could hamper a rapid decline in inflation to target. Nevertheless, if the baseline projection for inflation was confirmed over the next few months and quarters, a gradual dialing-back of policy restrictiveness was seen as appropriate.
 
U.S. retail sales broadly advance, capping a strong holiday season
U.S. retail sales rose 0.4% month-on-month in December, while the November figure was revised upward to a 0.8% increase, the U.S. Department of Commerce reported on Thursday. Excluding automobiles and gasoline, retail sales grew by 0.3%.
 
Of the 13 categories in the report, 10 saw sales growth, including furniture and sporting goods stores. Auto sales increased by 0.7% in December, following strong growth in the previous two months. This was boosted by President-elect Donald Trump’s threat to end electric vehicle tax credits, declining interest rates, and manufacturers stepping up incentives. Gas station revenues also rose, reflecting higher fuel prices.
 
The data indicates that consumers performed well during the holiday season, benefiting from wage growth outpacing inflation. Although core inflation eased last month, Americans are still grappling with high living costs. Some retailers are reportedly considering price increases to offset potential tariff hikes following Trump’s inauguration next week. This could distort future retail data, as the reported growth may reflect higher prices rather than increased sales activity, given that the data is not adjusted for inflation.

 

Today’s Focus

UTC+8 15:00 U.K. Retail Sales MoM (Dec)
UTC+8 19:00 ECB Executive Board Member Cipollone Speaks
UTC+8 21:30 U.S. Annual New Housing Starts (SA) (Dec)
UTC+8 22:15 U.S. Industrial Output MoM (Dec)

EUR/USD Technical Analysis Report with Fundamental Overview

Daily Market Analysis Report

EUR/USD Overview:
The EUR/USD pair traded within a range today, reaching a high of 1.03146 and a low of 1.02617, before closing at 1.02992. The close near the day’s high indicates some bullish momentum, but the pair remains close to the pivot point of 1.02918, suggesting market indecision.

Technical Overview:
The price is currently hovering around the pivot point, a key level to watch for any decisive breakout. If the EUR/USD moves above the pivot point of 1.02918, it could signal the start of a bullish trend. In this scenario, the next resistance levels to watch are at 1.03446 (R1) and 1.03967 (R2). A sustained break above R1 could open up further upside potential, especially if the market sentiment shifts more bullish with positive economic data.

On the other hand, if the price falls below the pivot point of 1.02918, it could indicate bearish pressure. In this case, the next support levels to monitor are at 1.02490 (S1) and 1.02055 (S2). A decline below S1 could trigger a deeper move toward S2, confirming a bearish sentiment and a shift in market dynamics.

Fundamental Analysis:
The Euro saw mild gains against the US Dollar, driven by [mention relevant fundamental factors, e.g., “encouraging economic data from the Eurozone, such as improved business sentiment”]. In contrast, the US Dollar faced headwinds due to [mention relevant US developments, e.g., “weaker-than-expected economic indicators or dovish comments from the Federal Reserve”].

External factors such as [mention any geopolitical events or market news] also contributed to the cautious market environment.

Market Sentiment:
The market sentiment for the EUR/USD pair is currently balanced between bearish and neutral, with traders showing caution amid a lack of strong directional cues. The proximity to the pivot point highlights this indecision, as participants await further economic data.

Key Takeaways:

  • If the market moves above the pivot point (1.02918), watch for a potential move towards R1 at 1.03446 and possibly R2 at 1.03967, signaling a bullish trend.
  • If the market moves below the pivot point, consider potential downside targets at S1 (1.02490) and S2 (1.02055), indicating a bearish shift in market sentiment.

With the EUR/USD pair still hovering around the pivot level, the next few trading sessions will be critical in determining the market’s next move. Traders should watch for any breakouts or fundamental shifts that could indicate a stronger directional bias. Keeping an eye on upcoming economic reports and central bank announcements will be crucial in anticipating potential price movements.

Disclaimer: This content is for informational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making any trading decisions.


GBP/USD Technical Analysis Report with Fundamental Overview


Daily Market Analysis Report

GBP/USD Overview:
The GBP/USD pair traded within a range today, reaching a high of 1.22586 and a low of 1.21746, before closing at 1.22203. The close near the pivot point of 1.22178 indicates market indecision, with the pair consolidating within this range as traders await clearer signals.

Technical Overview:
The pivot point for GBP/USD is at 1.22178, which serves as a key level to determine the next market move. If the price moves above the pivot point, it could signal bullish sentiment and a potential move toward resistance levels. The next resistance to watch is at 1.22586 (R1), followed by a higher level at 1.23000 (R2). A sustained breakout above R1 could open the path for further upside momentum, suggesting a continuation of the bullish trend.

Alternatively, if the price moves below the pivot point at 1.22178, it could suggest bearish sentiment. In this case, the next support levels to monitor are at 1.21746 (S1) and 1.21200 (S2). A move below S1 would likely confirm a bearish shift, potentially triggering a deeper move toward S2.

Fundamental Analysis:
The British Pound showed modest gains against the US Dollar, supported by [mention relevant fundamental factors, e.g., “strong UK manufacturing data” or “positive Brexit developments”]. However, the US Dollar remained resilient amid [mention relevant US factors, e.g., “mixed economic reports” or “Federal Reserve comments”].

The market is also sensitive to upcoming data releases, including [mention any relevant upcoming events], which could influence the direction of GBP/USD in the near term.

Market Sentiment:
The sentiment around GBP/USD is currently balanced between neutral and slightly bullish. The pair’s consolidation near the pivot point reflects uncertainty, with traders awaiting clearer signals from either technical breakouts or key economic data.

Key Takeaways:

  • If the market moves above the pivot point (1.22178), watch for potential moves toward resistance at 1.22586 (R1) and 1.23000 (R2), signaling a potential bullish trend.
  • If the market moves below the pivot point, consider downside targets at 1.21746 (S1) and 1.21200 (S2), indicating a bearish sentiment.

The next few trading sessions are crucial in determining whether the pair will break above the pivot and extend higher, or if bearish pressure will drive the pair lower. Traders should monitor key economic events and market sentiment closely for potential direction changes.

Disclaimer: This content is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a financial advisor before making any trading decisions.


USD/JPY Technical Analysis Report with Fundamental Overview


Daily Market Analysis Report

USD/JPY Overview:
The JPY/USD pair traded within a narrow range today, reaching a high of 156.548 and a low of 155.097, before closing at 155.179. The close near the pivot point of 155.608 indicates market indecision, suggesting that traders are cautious while awaiting further market direction.

Technical Overview:
The pivot point for JPY/USD is at 155.608, which serves as a key level for determining the market’s next move. If the price moves above the pivot point, it could indicate bullish sentiment, with the next resistance levels to watch being at 156.548 (R1) and 157.000 (R2). A break above R1 could suggest a further upward move, confirming the continuation of the bullish trend.

On the other hand, if the price moves below the pivot point at 155.608, it could indicate bearish pressure. The next support levels to monitor are at 155.097 (S1) and 154.500 (S2). A fall below S1 would reinforce the bearish sentiment, and a deeper decline toward S2 could signal further downside potential.

Fundamental Analysis:
The Japanese Yen saw slight weakness against the US Dollar, driven by [mention relevant fundamental factors, e.g., “mixed Japanese economic data” or “Bank of Japan’s stance on monetary policy”]. Meanwhile, the US Dollar experienced some strength due to [mention US-related factors, e.g., “stronger-than-expected economic data” or “hawkish Federal Reserve rhetoric”].

Geopolitical factors such as [mention any ongoing events or news] are also influencing the market sentiment, contributing to the cautious outlook.

Market Sentiment:
The market sentiment for JPY/USD is currently balanced between neutral and slightly bearish, as the pair consolidates near the pivot point. Traders are waiting for a definitive breakout in either direction, which will likely be influenced by upcoming economic data or further developments in global markets.

Key Takeaways:

  • If the market moves above the pivot point (155.608), watch for potential resistance at 156.548 (R1) and possibly 157.000 (R2), signaling bullish momentum.
  • If the market moves below the pivot point, consider support levels at 155.097 (S1) and 154.500 (S2), suggesting further bearish potential.

With the JPY/USD pair hovering around the pivot point, the next few sessions will be critical to determining whether the pair will break higher or lower. Traders should keep an eye on global economic events and market sentiment to anticipate potential shifts in direction.

Disclaimer: This content is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a financial advisor before making any trading decisions.


AUD/USD Technical Analysis Report with Fundamental Overview


Daily Market Analysis Report

AUD/USD Overview:
The AUD/USD pair traded within a narrow range today, reaching a high of 0.62455 and a low of 0.61918, before closing at 0.62089. The close near the pivot point of 0.62154 indicates a neutral market sentiment, with traders awaiting further direction from economic data or market events.

Technical Overview:
The pivot point for AUD/USD is at 0.62154, which serves as a crucial level to determine the next market move. If the price moves above the pivot point, it could indicate a shift toward bullish sentiment, with the next resistance levels to monitor at 0.62455 (R1) and 0.62700 (R2). A break above R1 would suggest a continuation of the upward trend, signaling further buying interest.

Alternatively, if the price moves below the pivot point at 0.62154, it could point to bearish pressure. In this case, support levels at 0.61918 (S1) and 0.61650 (S2) would be key to watch. A decline below S1 could signal a deeper bearish move, potentially pushing the price toward S2.

Fundamental Analysis:
The Australian Dollar saw slight weakness against the US Dollar, driven by [mention relevant fundamental factors, e.g., “soft commodity prices” or “mixed Australian economic data”]. Meanwhile, the US Dollar was relatively strong due to [mention US-related factors, e.g., “hawkish comments from the Federal Reserve” or “positive US employment data”].

Global factors, such as [mention geopolitical events or market developments], are also influencing the pair, contributing to a cautious outlook in the market.

Market Sentiment:
The sentiment surrounding AUD/USD is neutral at the moment, with the pair consolidating near the pivot point. This reflects market indecision, as traders await clearer direction from upcoming economic reports or geopolitical events.

Key Takeaways:

  • If the market moves above the pivot point (0.62154), watch for resistance at 0.62455 (R1) and 0.62700 (R2), signaling potential for a bullish move.
  • If the market moves below the pivot point, consider support at 0.61918 (S1) and 0.61650 (S2), indicating a bearish shift.

With the AUD/USD pair hovering around the pivot point, the next few sessions will be key to determining the market’s direction. Traders should monitor economic developments, central bank updates, and global sentiment to gauge the likely direction of the pair.

Disclaimer: This content is for informational purposes only and should not be construed as financial advice. Always conduct your own research or consult with a financial advisor before making any trading decisions.


Crude Oil Technical Analysis Report with Fundamental Overview

Daily Market Analysis Report

Crude Oil Overview:
Crude Oil prices traded within a range today, reaching a high of 79.4 and a low of 77.11, before closing at 77.91. The close near the pivot point of 78.14 suggests that the market is currently in a neutral phase, with traders awaiting further signals from global economic and geopolitical events to guide price movement.

Technical Overview:
The pivot point for Crude Oil is at 78.14, which serves as a key level to watch for potential market direction. If the price moves above the pivot point, it could indicate bullish sentiment, with the next resistance levels to monitor at 79.4 (R1) and 80.00 (R2). A breakout above R1 could signal further upside momentum, with the possibility of pushing prices toward R2.

Alternatively, if the price moves below the pivot point at 78.14, it could indicate bearish pressure. In this case, the next support levels to watch are at 77.11 (S1) and 76.50 (S2). A move below S1 could reinforce a bearish outlook, potentially driving the price lower toward S2.

Fundamental Analysis:
Crude Oil prices have been under pressure recently due to [mention relevant fundamental factors, e.g., “concerns about global demand due to slowing economic growth in major economies” or “oversupply in the market due to increased production from key players”]. At the same time, there may be support from [mention factors supporting prices, e.g., “tightening supply conditions from OPEC+ or geopolitical tensions affecting supply”].

Geopolitical factors and upcoming energy inventory reports, such as the [mention relevant reports like “EIA Crude Oil Stocks” or “API inventory report”], will be crucial in influencing price action in the coming sessions.

Market Sentiment:
The market sentiment for Crude Oil is currently balanced between neutral and slightly bearish. The price action remains trapped near the pivot point, with a lack of clear directional momentum. Traders are awaiting fresh catalysts, such as economic data releases or geopolitical developments, to determine the next significant move.

Key Takeaways:

  • If the market moves above the pivot point (78.14), watch for resistance at 79.4 (R1) and possibly 80.00 (R2), indicating a potential bullish move.
  • If the market moves below the pivot point, consider support levels at 77.11 (S1) and 76.50 (S2), signaling a potential bearish move.

With Crude Oil prices near the pivot point, the next few sessions will be critical for determining whether the market will break higher or lower. Traders should stay alert to any developments in global economic conditions, energy inventories, and geopolitical events that could drive the market in either direction.

Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always perform your own research or consult with a qualified financial advisor before making any trading decisions.

 


XAU/USD Technical Analysis Report with Fundamental Overview


Daily Market Analysis Report

XAU/USD (Gold) Overview:
Gold prices traded within a range today, reaching a high of 2724.94 and a low of 2690.22, before closing at 2713.46. The close near the pivot point of 2709.54 indicates a balanced market sentiment, with investors awaiting further direction from economic and geopolitical events that could guide price movement.

Technical Overview:
The pivot point for Gold is at 2709.54, which serves as a critical level to monitor for any potential breakout. If the price moves above the pivot point, it could signal a bullish shift, with the next resistance levels to watch at 2724.94 (R1) and 2740.00 (R2). A sustained move above R1 could suggest further upside potential, as buying interest may increase.

Conversely, if the price moves below the pivot point at 2709.54, it could signal bearish sentiment. In this case, support levels at 2690.22 (S1) and 2675.00 (S2) would be key to watch. A move below S1 would strengthen the bearish outlook, potentially driving the price down to S2.

Fundamental Analysis:
Gold has been under pressure recently due to [mention relevant factors, e.g., “strengthening of the US Dollar amid hawkish Federal Reserve signals” or “rising global bond yields”]. At the same time, there are factors supporting gold, such as [mention factors like “increased geopolitical tensions or ongoing concerns about inflation”].

Economic data, including [mention any relevant data releases, such as “US inflation reports or central bank meetings”], will be crucial in determining the direction of Gold in the upcoming sessions.

Market Sentiment:
The market sentiment for Gold remains neutral to slightly bullish, with price action hovering near the pivot point. This suggests that traders are uncertain about the near-term direction, with key data releases and global events likely to determine whether gold continues to rise or experiences a pullback.

Key Takeaways:

  • If the market moves above the pivot point (2709.54), watch for resistance at 2724.94 (R1) and possibly 2740.00 (R2), signaling a potential bullish breakout.
  • If the market moves below the pivot point, consider support levels at 2690.22 (S1) and 2675.00 (S2), indicating a potential bearish shift.

With Gold trading near the pivot point, the next few trading sessions will be important for determining whether the price breaks above or below this key level. Traders should keep an eye on economic data, central bank statements, and geopolitical events for any signs of a directional move.

Disclaimer: This content is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a financial advisor before making any trading decisions.


Dow Jones Technical Analysis Report with Fundamental Overview

Daily Market Analysis Report

DOW JONES Overview:
The DOW JONES index traded within a range today, reaching a high of 43119.53 and a low of 41850.03, before closing at 42009.88. The close near the pivot point of 42326.48 indicates a relatively balanced market sentiment, with investors awaiting further signals to determine the direction of the index in the near term.

Technical Overview:
The pivot point for the DOW JONES is at 42326.48, which serves as a key level to guide potential market movement. If the price moves above the pivot point, it could suggest a bullish sentiment, with the next resistance levels to watch at 43119.53 (R1) and 43500.00 (R2). A move above R1 would indicate a continuation of the bullish trend, with higher targets likely.

On the other hand, if the price moves below the pivot point at 42326.48, it could indicate bearish pressure. The next support levels to watch are at 41850.03 (S1) and 41500.00 (S2). A break below S1 would confirm a bearish outlook, possibly leading to a deeper pullback toward S2.

Fundamental Analysis:
The DOW JONES index has been influenced by [mention relevant factors, e.g., “strong earnings reports from key US companies” or “concerns over economic growth in the US or global markets”]. Recent developments such as [mention specific events like “Federal Reserve’s monetary policy stance” or “US employment data”] are likely to have contributed to the current market volatility.

Geopolitical events, including [mention relevant news like “international trade tensions” or “global economic indicators”], also continue to shape market sentiment.

Market Sentiment:
The market sentiment for the DOW JONES remains neutral to slightly bullish. Price action near the pivot point indicates indecision, as investors are uncertain about the direction of the index. Traders are awaiting clearer signals from economic reports, central bank announcements, or geopolitical events to gauge the next move.

Key Takeaways:

  • If the market moves above the pivot point (42326.48), watch for resistance at 43119.53 (R1) and possibly 43500.00 (R2), indicating bullish momentum.
  • If the market moves below the pivot point, consider support levels at 41850.03 (S1) and 41500.00 (S2), signaling a potential bearish shift.

With the DOW JONES index close to the pivot point, the next few trading sessions will be key to determining the index’s direction. Investors should stay alert to economic developments, central bank decisions, and geopolitical risks for any indications of a breakout or reversal.

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Disclaimer: This content is for informational purposes only and should not be considered as financial advice. Always perform your own research or consult a financial advisor before making any trading decisions.

Disclaimer: The figures provided are based on current technical analysis and should not be considered financial advice. Always seek guidance from a professional financial advisor before engaging in forex trading.

Notice: The data presented is derived from technical analysis and does not constitute financial advice. For those trading in forex, consulting a qualified financial advisor prior to making investment decisions is strongly recommended.

Caution: The information above reflects ongoing technical analysis and should not be interpreted as financial advice. Forex trading involves high volatility, and without proper knowledge, you risk losing all your capital. It is essential to consult with a financial advisor before investing.

Advisory: The insights shared are the result of technical analysis and are not intended as financial advice. Forex traders should seek advice from professional financial advisors before making any investment decisions. Remember, the forex market is highly volatile, and trading without adequate knowledge can lead to significant losses.

Important: The analysis provided is for informational purposes only and should not be seen as financial advice. Forex trading carries substantial risks, and it is advisable to consult financial advisors before proceeding with any investments. This content is intended solely for Wealth Management Education purposes.