Forex Analysis – January 19, 2023


Our previous Forex analysis can be viewed here

Technical Analysis

FOREX ANALYSIS: AUDUSD – Clear uptrend

AUDUSD price chart
AUDUSD 1 Hour Chart

As suggested in our last analysis, the AUDUSD has been bullish and has swung higher.

Price is clearly up-trending and is currently forming a swing higher. Price action has formed a bullish channel and the moving averages are bullish and steady, so the uptrend could continue. AUDUSD is currently testing the channel resistance area, so price could be due a retrace move.

Buying opportunities may exist around the dynamic support of the moving averages, around the bullish channel support area and around the horizontal levels at 0.7015, 0.6985, 0.6940 and 0.6925. The AUDUSD could reverse off the bullish channel resistance area.

FOREX ANALYSIS: EURGBP – Market indecision. Potential downtrend?

EURGBP 1 Hour Chart
EURGBP 1 Hour Chart

The EURGBP found support around 0.8775, as suggested in our last chart analysis.

Price has since been bearish and has swung below the recent consolidation area, so EURGBP may start down-trending. The moving averages confirm the potential downside – they are bearish and widening. Price actin may continue being indecisive though.

Selling opportunities could exist around any of the key Fib levels, around the dynamic resistance of the moving averages and around the horizontal levels at 0.8775, 0.8780, 0.8795 and 0.8835. EURGBP may stall or reverse around the recent lows at 0.8740.

FOREX ANALYSIS: EURUSD – Ranging

EURUSD Forex chart
EURUSD 1 Hour Chart

As suggested in our previous analysis, price has been moving sideways.

The EURUSD was up-trending but is now moving within a 100 pip range – 1.0770 and 1.0870. The moving averages confirm the market indecision – they are tight and moving sideways.

Trading opportunities may exist around the support and resistance areas of the range and if EURUSD moves out of the range (break-out trade). A break to the downside could find support around 1.0760, 1.0710 and 1.0680.

FOREX ANALYSIS: GBPUSD – Up-trending

GBPUSD Forex analysis
GBPUSD 1 Hour Chart

Price has been bullish, as suggested in our previous Forex chart analysis.

The GBPUSD is clearly up-trending and is currently forming a swing higher. The moving averages are bullish and steady, so the uptrend may continue.

Long opportunities could exist around the dynamic support of the moving averages, around the support and resistance areas of the previous bullish channel and around any of the horizontal levels at 1.2290, 1.2235 and 1.2165.

Fundamental Analysis

Key Analysis

Today’s Major Scheduled News

1330 UTC – USD – Building Permits
2330 UTC – JPY – Inflation Rate

Interest Rate Analysis

A summary of recent central bank rate changes and statements…

Australia (AUD)

The Reserve Bank of Australia (RBA) has increased rates again by another 0.25%, so rates are now set at 3.10%. The rate increases throughout 2022 have been to tackle rising inflation. The RBA have said that inflation is still too high, so further hikes are expected.

Canada (CAD)

The Bank of Canada (BOC) has hiked the interest rate by another 50bps, increasing the official bank rate to 3.75% – it’s seventh consecutive rate hike. The BOC noted that they will continue with quantitative easing and that economic growth remains strong, although it expects growth to stall for the first half of 2023.

Euro Area (EUR)

The European Central Bank (ECB) has increased it’s rates by 50bps, so the official rate is now at 2.50%. Europe is potentially entering recession. Projected inflation for 2023 is 6.3%.

Japan (JPY)

The Bank of Japan (BOJ) continues to keep interest rates at the record low of -0.10%. The BOJ does not currently plan to increase rates to tackle high inflation, which has been revised to 2.90% from 2.30%.

Switzerland (CHF)

The Swiss National Bank (SNB) have hiked rates by 50bps, bringing the official rate to 1.0% – it’s third rate hike after more than a decade of negative interest rates. The SNB signalled that rates could move higher, so further rate hikes are expected.

United Kingdom (GBP)

The Bank of England (BOE) have increased it’s official bank rate again. This time by 50 bps, so the official rate is now set to 3.50%. The BOE are expecting recession in the UK and forecast that CPI inflation has now peaked.

United States (USD)

The Federal Reserve has raised the official funds rate by an additional 50bps, so the rate is currently now set at 4.50%. The Fed expect rates to peak at 5.1% in 2023.

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