1. Forex Market Insight
The Eurozone’s economic sentiment index fell more than expected in December 2021, while inflation hit another record high, suggesting new pressures on the economy.
Meanwhile, the re-emergence of the Covid-19 epidemic is also forcing governments to tighten restrictive measures.
With the Omicron variant sweeping through Europe and new infections being added on a single day almost daily, growth is likely to take a hit around the start of the year, although governments have largely avoided implementing the kind of restrictive measures that led to economic stagnation a year ago.
The EU Executive Committee’s economic sentiment index fell much more than expected in December 2021, touching its lowest since May. This is a key indicator of the physical health of the eurozone economy.
At the same time, the outlook for the service sector has deteriorated significantly and employment expectations have fallen. In Germany, the eurozone’s largest economy, the hard data already reflects a slowdown in the economy.
(EUR/USD 1-hour chart)
Today, we will pay attention to the suppression strength of the 1.1357-line. If the euro runs steadily below the 1.1357-line, we will pay attention to the support strength of the two positions below 1.1267 and 1.1315.
GBP Intraday Trend Analysis
The British pound climbed to a two-month high last week as investors increased expectations that the Bank of England will raise interest rates as early as next month.
Currency markets are digesting expectations that the BOE will raise interest rates twice, 15 basis points each time, before its March meeting, as well as by 1 percentage point by the end of the year.
During this interval, expectations are growing that the U.K. will not introduce Covid-19 restrictions to hamper economic activity.
(GBP/USD 1-hour chart)
The pound is focused on the 1.3574-line today. If the pound runs below the 1.3574-line, it will pay attention to the support strength of the 1.3522 and 1.3450 positions. If the pound runs above the 1.3574-line, it will pay attention to the suppression of the 1.3669-line.
2. Precious Metals Market Insight
Gold prices bottomed out on Friday, 7th January 2022, as the December non-farm payrolls report continued to blow out and both the dollar index and U.S. stocks posted declines.
However, hawkish expectations from the Federal Reserve continue to weigh on gold prices. This week, focus on the U.S. CPI, retail sales and consumer confidence, China CPI, in addition to many Fed officials’ speeches.
(Gold 1-hour chart)
Gold pays attention to the 1812-line today. If the gold price runs steadily below the 1812-line, then pay attention to the support strength of the two positions of 1784 and 1773. If the gold price breaks above the 1812-line, then it will open up further upward space. At that time, pay attention to the suppression of 1820.
3. Commodities Market Insight
WTI Crude Oil
Oil prices closed lower on Friday, 7th January 2022, as the market weighed supply concerns stemming from unrest in Kazakhstan and production cuts in Libya against a weaker-than-expected U.S. jobs report and its potential impact on Federal Reserve policy. In addition, renewed concerns that a mutated strain of Omicron could still dampen demand.
(Crude oil 1-hour chart)
Oil prices focus on the 80-line today. If the oil price runs below the 80-line, then focus on the support at 78.92 and 76.89. If the oil price breaks above the 80-line, then pay attention to the suppression of the 81.07-line.
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