Yesterday’s Market Outlook
The initial two weeks of 2023 have seen the market adopting the stance it maintained during most of 2022’s fourth quarter. Meantime, the United States dollar re-launched its retreat as risk assets exhibit a bullish strength.
That came after economic data and inflation confirmed further slowdowns. Nonetheless, the previous week saw mixed actions dominating, with the unpredictable data catalyzing choppy price movements in all assets.
The United Kingdom unemployment data and China’s fourth-quarter GDP emerged above estimates – appositive bias or Oil – whereas the United States ESM (Empire Stated Manufacturing) Index dipped. Meanwhile, the BoJ (Bank of England) did not change the policy, which mailed USD-JPY over 300 pips up & down.
United Kingdom consumer inflation slowed but stayed in the double-digit territory. Also, U.S. retail sales demonstrated a higher-than-anticipated dip in December, though cold weather during Christmas contributed.
The lower unemployment claims confirmed that the United States employment industry remains impressive – which will prevent deep recessions.
Market Expectations This Week
This week awaits vital economic data, and analysts expect it to be mixed and negatively affect the markets, though with heightened volatility. ECB’s Lagarde will speak today, whereas December’s United States manufacturing & services and the European manufacturing reports will come tomorrow, showing the performance of these sectors.
Australia and New Zealand will announce CPI inflation numbers early Wednesday before the BoC’s (Bank of Canada) rate decision. In addition, the United States Advance Gross Domestic Product for the fourth quarter of 2022 will arrive on Thursday, plus the heavy-duty goods orders. Meanwhile, the United States Core PCE Index will finalize this week.
FX Signals Update
Last week recorded multiple reversals following two weeks of upside momentum. That emerged as the economic stat triggered choppy price action. Meanwhile, analysts opened several signals while increasing longer-term trading signals.
However, they ended the week at a breakeven level, with 13 winning and 13 losing trading signals. Most of the longer-term signals saw profits.
Still Long on GOLD
XAU maintained a bullish stance since October, and analysts remained positive on Gold in 2023’s first two weeks. Thus, they opened sell signals for Golds as the assets dropped early last week following upswings toward $1,930.
Meanwhile, the 50 Simple Moving Average offered support on the 4hr chart as Gold continued the upside. So, economists are bullish on Gold again, which will persist this week amid high uncertainty.
Has USD/JPY’s Retreat Ended?
USD/JPY has maintained bearishness since October and received homage from the Moving Averages this year. The previous two weeks saw the 100-Simple Moving Average stopping higher retraces on the four-hour chart. Therefore, downtrends may resume this week, and analysts suggest USD-JPY shorts.
The cryptocurrency winter may have ended. Digital coins displayed bearishness since November 2021, surrendering up to 90% from record highs. Nonetheless, the downside may have ended. 2023 has recorded bullishness, with the initial two weeks of the year registering continued uptrends.
BTC Trading Beyond $23K
Bitcoin began turning bullish during January’s first week, following sideways movements since November, and the bellwether crypto recorded price upticks in the past fourteen days.
BTC surged approximately 40% to climb past $23K. Last week recorded a downward retracement, but buyers resurfaced to ensure the ongoing bullish sentiment.
Will ETH Hit $2K Soon?
Ethereum exhibited selling momentum in 2022, but that has changed in the past two weeks, with the leading alt surging past $1.6K. Meanwhile, the four-hour chart Moving Averages supported the alt, and the recent rebound emerged at the 50-Simple Moving Average.