Markets in Details: 22 January 2019

22 January, 2019

News

  • IMF downgraded its global growth estimate to 3.5%, the weakest in over three years, citing rising risks given evidence of slowdown in Europe, worst-than-expected deceleration in China and that further downgrades would be warranted should trade wars escalate.
  • UK will lose two major equity and foreign-exchange market firms due to Brexit. CME Group Inc. will move its London-based $15bn-a-day forex market to Amsterdam and CBOE Global Markets Inc. will shift most of its $8bn-a-day European equities trading division to the Netherlands. These moves, which are subject regulatory approval from the Dutch government, will contribute to tax revenue loss for the UK.

The focus of attention

Markets are expecting to digest the latest employment and wage numbers coming from the UK as well as German economic sentiment and U.S. housing data.

Expected events. All times GMT.

  • 09:30 UK will release the employment report and average earnings numbers.
  • 10:00 Germany will release the ZEW Economic Sentiment reading.
  • 15:00 U.S. will release Existing Home Sales report.

Technical Analysis 

EUR USD appears to be stuck in a fairly narrow trading zone and traders are not convinced of prices going either way. What is positive though is the pair has not moved away from its short-term 50SMA suggesting the selloff seen last week has taken a pause. Expect any move above RSI50 or RSI40 to be the signal for the next bullish or bearish move from here.

After bouncing of support at 1.2833, GBP USD has climbed back to above its 50SMA but does not show a clear bullish or bearish sign similar to EUR USD. If the upwards-looking 50SMA crosses the 200SMA, that would be a bullish development and this may happen with a fundamental catalyst in the short-term.


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