Technical Analytics Report

Daily Analysis Report 27 Jan ‘2022


During the Asian session, the euro fell moderately versus the US dollar, testing the level of 1.1220 for a break and updating local lows from November 26. Although the US Federal Reserve did not report anything specific, the dollar received moderate support from the meeting minutes issued the day before. The current monetary policy stayed unchanged, as expected, but members from the department indicated that the rate hike’s timing is nearing. The quantitative easing program (QE) will almost certainly be completed ahead of schedule, but only by a few weeks. After the end of a cycle of increasing interest rates, the US Federal Reserve will begin to reduce its balance sheet, which presently stands at $9 trillion.


During the morning session, the British pound trades with bearish dynamics against the US dollar, updating local lows from December 29. The instrument tests the 1.3430 level for a break in response to the relatively upbeat minutes of the US Federal Reserve meeting released the day before. As expected, the central bank did not change its monetary policy in January, although an interest rate hike is on the horizon. Furthermore, the department praised the progress of the American economy, citing a considerable improvement in the labor market as an example. Investors will be concentrating their attention on a set of macroeconomic statistics from the United States on the yearly dynamics of GDP for the fourth quarter of 2021. Traders are also looking forward to publishing statistics on the number of Jobless Claims and the volume of Durable Goods Orders in December.


During the Asian session, the New Zealand dollar steadily lost ground against the US dollar. The NZD/USD pair is forming a strong “bearish” trend that began last week, and it is currently testing psychological support at 0.6600, which it last dropped below in November 2020. The New Zealand dollar’s current depreciation is unaffected by recent macroeconomic data released. In yearly terms, the Consumer Price Index increased from 4.9 percent to 5.9 percent in Q4 2021, above analysts’ expectations at the time. Consumer inflation decreased from 2.2 percent to 1.4 percent in the third quarter, although traders had predicted a drop to 1.3 percent. Given the Reserve Bank of New Zealand’s (RBNZ) “hawkish” stance, such numbers may serve as an additional signal to raise interest rates further.


In Asian trading, the US dollar is flat against the Japanese yen, stabilizing between 114.60 and local highs from January 19. The dollar received a new impetus to an uptrend the day before when the US Federal Reserve meeting minutes were released, and the USD/JPY was slightly stabilizing after an active growth the day before. The central bank maintained its monetary policy parameters, citing the country’s general improvement in economic conditions and approaching a “good moment” to begin a cycle of hiking interest rates. Positive macroeconomic data from the United States added more support to the dollar yesterday. New home sales jumped from 11.7 percent to 11.9 percent in December, exceeding analysts’ average predictions. As a result, the data from Japan contributed to the yen’s mild gain. In November, the Coinciding Indicators Index increased from 89.8 to 92.8 points, exceeding 93.6 points. The Leading Economic Index increased from 101.5 to 103.2 points for the same period, while expectations were at 103 points.


Gold prices are sliding during the Asian session, extending a strong “bearish” momentum that began the day before in response to the release of the US Federal Reserve’s meeting minutes. The instrument’s quotes are testing the level of 1814.00 for a break, updating the January 19 local lows. The American regulator did not alter current monetary policy settings but recognized encouraging prospects in the domestic economy, shortly beginning a cycle of interest rate hikes. At the same time, gold demand remains robust amid rising inflationary pressures across the globe, including in the United States, Europe, and Asia. The instrument is also bolstered by the current geopolitical tensions in the region of Eastern Europe.