Forex News Analysis by LiteForex

Morning Market Review
2020-01-20

EUR/USD

EUR is relatively stable against USD during today's Asian session and is located near local lows, updated at the end of last week. Last Friday, EUR showed a steady decline, despite the publication of neutral statistics on Consumer Inflation, which fully met market expectations. Consumer Price Index in the euro area in December rose by 0.3% MoM after a decline of 0.3% MoM in November. In annual terms, prices remained at the same rate of growth (+1.3% YoY). Traders almost completely ignored weak statistics from the United States. Industrial Production in the USA in December decreased by 0.3% MoM after an increase of 0.8% MoM in the previous month. Experts expected a decrease of 0.2% MoM. Michigan Consumer Sentiment Index fell slightly from 99.3 to 99.1 points in January, which turned out to be worse than neutral forecasts.

GBP/USD

GBP is showing slight growth against USD during today's Asian session. The instrument adds about 0.09%, testing the psychological support level of 1.3000 for a breakout. In addition to a number of technical factors, the pound is supported by the publication of data from the UK on House Prices. In January, Rightmove House Price Index showed an increase of 2.3% MoM after a decline of 0.9% MoM last month. YoY, the growth of the index accelerated from 0.8% to 2.7%. It is likely that the trading activity on the instrument at the beginning of the week will remain reduced due to the fact that US markets are closed on Monday due to the national holiday. On Tuesday, investors are waiting for the publication of UK labor market data.

AUD/USD

AUD is showing moderate growth against USD during today's Asian session, recovering from a sharp decline at the end of the previous week. The instrument adds about 0.14%, approaching the level of 0.6900. The growth of the pair is mainly due to technical factors. In addition, investors take a lead from weak statistics from the US on Industrial Production and Capacity Utilization, which was ignored last Friday. On January 23, traders expect the publication of the December report on the Australian labor market, but forecasts for it are still very negative. It is expected that employment growth may slow down by more than 2 times, and the Unemployment Rate will again increase from 5.2% to 5.3%.

USD/JPY

USD shows moderate growth against JPY during today's Asian session, continuing the development of a powerful "bullish" impulse of January 6. The instrument adds about 0.05%, testing the level of 110.20 for a breakout. Pressure on JPY is again exerted by weak macroeconomic statistics from Japan. Industrial Production in Japan in November fell by 8.2% YoY after falling by 8.1% YoY in the previous month. However, investors did not expect a significant improvement in the dynamics of the indicator. In monthly terms, the production rate decreased by 1% MoM after a decline of 0.9% MoM in October. Capacity Utilization in November fell by 0.3% after a decrease of 4.5% last month. Investors expected an increase of 0.7%.

XAU/USD

Gold prices are relatively stable during today's Asian session and continue developing uncertain "bullish" trend, trading near weekly highs. Good macroeconomic statistics from China, as well as the conclusion of a trade agreement between the USA and China, put significant pressure on the instrument, as well as on the demand for safe assets in general. Last Friday, China reported a 6% YoY growth in GDP for the Q4 2019, which fully met market expectations. Meanwhile, Industrial Production in December grew by 6.9% YoY, accelerating from the previous value of 6.2% YoY. Analysts expected a slowdown in production growth to 5.9% YoY.

Morning Market Review
2020-01-21

EUR/USD

EUR continues to trade calmly against USD during today's Asian session, trading with a minimum difference from the opening mark. The approach of the Chinese New Year, as well as the markets closed in the USA on Monday due to the celebration of Martin Luther King Jr. Day, also contributed to reducing volatility. At the same time, rather optimistic data from Germany supported EUR. The Producer Price Index in December increased by 0.1% MoM after the zero dynamics of the previous month. In annual terms, the index decreased by 0.2% YoY, correcting from the previous value of –0.7% YoY. The indicator turned out significantly better than expectations, which were calculated at –0.6% YoY. Today, investors expect the publication of ECB Bank Lending Survey, as well as January data on Economic Sentiment from ZEW.

GBP/USD

GBP is trading near zero against USD during today's Asian session, trying to consolidate above the target level of 1.3000 since the beginning of the current trading week. The growth of the instrument yesterday was mainly due to technical factors, while the general market volatility remained reduced, and investors continued to express concern about the upcoming Brexit process. The UK should leave the EU at the end of January, after which the phase of trade negotiations will begin, which is likely to last until December. Today, investors are awaiting the publication of UK employment data for November-December. Analysts predict that Average Earnings will slow down somewhat, and the overall Unemployment Rate will remain at the previous level of 3.8%.

NZD/USD

NZD declines slightly against USD during today's Asian session, located not far from local lows updated last Wednesday. Despite the existing risks, the instrument still cannot consolidate below the support level of 0.6600. The pressure on the pair is exerted by macroeconomic statistics from New Zealand. Business NZ Performance of Services Index in December fell from 53.3 to 51.9 points, which turned out to be worse than the average market expectations. During the day, traders expect the publication of the Global Dairy Trade New Zealand Dairy Price Index. The indicator is expected to decline by 0.3% MoM after rising by 2.8% MoM in the previous month. There will again be little data from the USA today, and therefore a low level of volatility is likely to continue.

USD/JPY

USD is falling against JPY during today's Asian session, retreating from local highs, updated at the end of last week. The instrument loses about 0.17% and is trying to consolidate below 110.00. The reason for the appearance of the "bullish" trend on the yen was the meeting of the Bank of Japan. The Japanese regulator kept the interest rate at –0.10%, noting that it plans to maintain a "soft" monetary policy until a target inflation rate of 2% is reached. In addition, the Bank of Japan raised its forecasts for GDP in the near future, which contributed to the growth of optimism in the market. In the fiscal year 2019–2020, the regulator expects the economy to grow by 0.8% YoY, which is 0.2% higher than previous estimates. Next year, the growth of the Japanese economy may come close to 1%, which is also better than the previous forecast of 0.7% YoY.

XAU/USD

Gold prices are rising during today's Asian session, updating local highs of January 8. The instrument adds about 0.39%, developing a "bullish" momentum formed at the end of last week. The growth of the instrument is facilitated by the continued tension in the Middle East, which was again actively discussed in the market after the Hussite rebel attack in Yemen. In addition, the focus is on the impeachment procedure of Donald Trump, which also helps strengthen the position of gold.

Morning Market Review
2020-01-22

EUR/USD

EUR is trading near zero against USD during today's Asian session, consolidating at new local lows of December 24, updated the day before. Strong macroeconomic statistics from ZEW released on Tuesday had virtually no effect on EUR. German ZEW Current Situation index in January rose from –19.9 to –9.5 points with a forecast of –13.5 points. ZEW Economic Sentiment in Germany for the same period has significantly strengthened from 10.7 to 26.7 points with a forecast of growth of only 15 points. The euro area's ZEW Economic Sentiment index in January also showed strong positive dynamics, rising from 11.2 to 25.6 points, while experts expected a decrease to 5.5 points.

GBP/USD

GBP is declining slightly during today's Asian session, losing about 0.07%. The instrument is corrected after moderate growth yesterday, which, in turn, was caused by relatively positive data on employment in the country. Claimant Count Change in December remained unchanged at 14.9K with a forecast of an increase to 22.6K. Average Earnings Including Bonus in November also kept the previous growth rates (3.2% 3MoY), while experts expected a slowdown to 3.1% 3MoY. The Unemployment Rate remained unchanged at 3.8%. Today, investors are awaiting the publication of data on Public Sector Net Borrowing in the UK for December. In addition, traders are waiting for statistics from the Confederation of British Industrialists on Industrial Orders for January.

AUD/USD

AUD has a "bearish" trend against USD during today's Asian session, updating local lows of December 11. The instrument loses about 0.10%, slightly departing from new lows. Moderate pressure on AUD is exerted by macroeconomic statistics from Australia. Westpac Consumer Confidence in Australia in January decreased by 1.8% after the decline of 1.9% last month. Experts expected a reduction of only 0.8%. Today, traders' attention will be focused on the publication of the US data, as well as on speeches at the World Economic Forum in Davos. Australian statistics will not appear until Thursday, when the December report on the labor market comes out.

USD/JPY

USD shows strong growth against JPY during today's Asian session, recovering the positions lost the previous day, when JPY increased in reaction to the publication of updated forecasts for GDP growth from the Bank of Japan. The instrument adds about 0.18%, testing the level of 110.00 for a breakout. Inflation in Japan remains extremely low, and the regulator is still looking for ways to stimulate the economy. The Bank of Japan emphasizes that monetary policy will remain soft until it reaches target inflation rates, but recognizes the growing risks associated with a protracted period of low interest rates. Today, investors are awaiting the publication of macroeconomic statistics from the US on the dynamics of Retail Sales and Existing Home Sales. Japanese data will appear on Thursday, when the December statistics on the dynamics of Imports and Exports are published.

XAU/USD

Gold prices are decreasing during today's Asian session, losing about 0.35%. The asset returns to the negative trend after controversial trading the day before, when the position of the instrument was supported by the growth of concerns about the spread of coronavirus in China. In addition, investors are responding to continuing uncertainty in the Middle East, fearing the development of new local conflicts. A possible impeachment of Donald Trump also affects the position of the instrument. In turn, support for gold is provided by the approach of the Chinese New Year, as in the pre-holiday period the demand for the precious metal traditionally increases.

Morning Market Review
2020-01-23

EUR/USD

EUR shows a moderate decline against USD during today's Asian session, again returning to the "bearish" trend after a short growth the day before. Ambiguous macroeconomic statistics from the USA put some pressure on USD on Wednesday. Chicago Fed National Activity Index in December showed a decrease from 0.41 to –0.35 points, which turned out to be worse than market expectations of –0.30 points. At the same time, investors were optimistic about Existing Home Sales indicator. The indicator grew by 3.6% MoM in December after the decline by 1.7% MoM a month earlier. The forecast assumed an increase in sales dynamics by only 1.2% MoM. Investors are focused on the ECB decision on the interest rate followed by a press conference. At the moment, no changes are expected in the vector of European monetary policy; however, comments by officials will continue to be very important.

GBP/USD

GBP is trading slightly lower against USD during today's Asian session, correcting after confident growth the day before. GBP reacted positively to reports of the approval of the Brexit bill by the House of Lords. Now the document should be signed by Queen Elizabeth II and be ratified by the European Parliament, after which the UK will officially withdraw from the EU. Starting from February, the parties will resume the active phase of negotiations to form a new free trade agreement, but until then, the UK is obliged to comply with EU laws.

AUD/USD

AUD is showing strong growth against USD during today's Asian session, retreating from local lows of December 11, updated the day before. The instrument adds about 0.35%, testing the level of 0.6880 for a breakout. AUD is supported by strong results on the December report on the Australian labor market. Employment Change s. a. in December grew by 28.9K with a forecast of growth of only 15K. In the previous month, employment growth was 38.5K. At the same time, Part-Time Employment Rate increased by 29.2K, while Full-Time Employment decreased by 0.3K. The December Unemployment Rate unexpectedly dropped from 5.2% to 5.1%. Consumer Inflation Expectations in January rose from 4% to 4.7%, which was significantly higher than market forecasts of 3.8%.

USD/JPY

USD is falling against JPY during today's Asian session, continuing to develop a corrective downward momentum formed two days ago. The instrument is losing about 0.20% and is being traded near 109.50. The development of a downtrend in the pair is almost not hindered by ambiguous macroeconomic statistics from Japan. Japanese Exports went down by 6.3% YoY in December after the decline by 7.9% YoY in the previous month. Experts expected –4.2% YoY. Imports for the same period lost 4.9% after a decrease of 15.7% in November. The indicator also turned out to be significantly worse than forecasts, which assumed a decrease of 3.4% YoY. At the same time, for example, All Industry Activity Index in November increased by 0.9% MoM after falling by 4.8% MoM in October.

XAU/USD

Gold prices are stable during today's Asian session, waiting for new drivers to appear on the market. Demand for risk is balanced by poor macroeconomic statistics and the expectations of new mitigations from leading world regulators. Today, investors are focused on the ECB decision on the interest rate. Despite the fact that no adjustments to the monetary policy are expected from the European regulator, comments by officials can set the tone for trading for the next few days. The first meeting of the US Fed this year is scheduled for January 28-29, but no radical decisions are expected from it either. The US economy shows very good performance, so it is likely that the Fed will maintain a wait-and-see attitude.

Morning Market Review
2020-01-24

EUR/USD

EUR is relatively stable against USD during today's Asian session. The pair is consolidating near the level of 1.1050 after a steady decline the day before, which led to the updating of local lows from December 2, 2019. Pressure on EUR on Thursday was exerted by the speech of the ECB President Christine Lagarde, who noted the success of the European economy, but pointed out the continuing downward risks. According to the official, the weak dynamics of production and trade still impedes more confident growth. At the end of this week, investors expect the publication of statistics on business activity from Europe and the USA, so trading activity is likely to remain increased.

GBP/USD

GBP is weakening against USD, again returning to the "bearish" trend after rising since the beginning of the week. At the moment, the decline is due to technical factors; however, the fundamental reasons for the growth of the instrument are becoming less and less. Optimism regarding the final approval of the Brexit deal is quickly waning, and investors are increasingly worried about the process of working out a new trade agreement between the UK and the EU. Today, investors expect publication of statistics on business activity in the UK and the US. According to current forecasts, the British Manufacturing PMI may grow from 47.5 to 48.9 points, and Services PMI can increase from 50 to 51 points.

NZD/USD

NZD is showing slight growth against USD during today's Asian session, trading near weekly highs, updated the day before. Moderate support for the instrument is provided by statistics on consumer inflation in New Zealand for Q4 2019. In quarterly terms, the index slowed down from 0.7% QoQ to 0.5% QoQ, which was only 0.1% QoQ better than market expectations. The annual data reflected a steady increase from 1.5% YoY to 1.9% YoY against the forecast of 1.8% YoY. In turn, weak Credit Card Spending data is holding back the growth of the instrument. In December, the indicator decreased from 4.4% YoY to 3.4% YoY, while the forecast assumed a decrease to 4.3% YoY.

USD/JPY

USD shows a slight increase against JPY during today's Asian session, correcting after an active decline the day before, which led to the renewal of local lows of January 9. USD is adding about 0.07%, testing the levels of 109.50–109.60 for a breakout. Investors are focused on macroeconomic statistics from Japan today. Jibun Bank Manufacturing PMI in January rose from 48.4 to 49.3 points against the forecast of an increase to only 48.7 points. National Consumer Price Index rose from 0.5% YoY to 0.8% YoY in December, which was twice as good as market expectations. National CPI ex Food and Energy accelerated in December from 0.8% YoY to 0.9% YoY, coming close to an important 1% mark.

XAU/USD

Gold prices are showing a slight decline during today's Asian session, correcting after uncertain growth the day before. Support for the instrument is provided by an increase in the demand for safe assets amid continuing uncertainty. Investors are concerned about the new aggravation of the situation in the Middle East and the unclear prospects for the development of trade relations between the United States and China. The UK also adds uncertainty, which, after Brexit at the end of January, should begin rather lengthy negotiations to develop new terms of trade with the European Union. Finally, coronavirus outbreaks in China ahead of Chinese New Year celebrations also force investors to avoid unnecessary risks.

Morning Market Review
2020-01-27

EUR/USD

EUR shows flat trading during today's Asian session, slightly correcting after an active decline last Friday, when the instrument managed to update local lows of December 2. EUR declined amid the publication of good statistics on business activity from Germany, which was left without due attention. Markit Manufacturing PMI in January rose from 43.7 to 45.2 points against a forecast of 44.5 points. Services PMI over the same period increased from 52.9 to 54.2 points, which also turned out to be better than the expectations of 53 points. Composite PMI in January strengthened from 50.2 to 51.1 points against the forecast of 50.5 points. Today, there are not many interesting statistics expected, therefore it is possible that the pair will continue to develop ambiguous trading dynamics. German Ifo Business Sentiment data are expected to be published today.

GBP/USD

GBP is slightly declining against USD during today's Asian session, developing a "bearish" momentum formed the day before. The instrument loses about 0.15%, testing for the level of 1.3050 for a breakdown. UK macroeconomic statistics released last Friday showed little support to GBP. Manufacturing PMI in the UK in January showed an increase from 47.5 to 49.8 points against the forecast of 48.9 points. Services PMI for the same period showed a steady increase from 50 to 52.9 points, which turned out to be significantly better than the expectations of 51 points.

NZD/USD

NZD shows a "bearish" trend in trading against USD during today's Asian session, updating local lows of December 18, 2019. The pair opened with a negative gap and is losing about 0.30%, trading near the level of 0.6570. Macroeconomic statistics from New Zealand and the US published at the end of last week turned out to be quite positive; however, NZD remains under the pressure of growing uncertainty. In Q4 2019, New Zealand's Consumer Price Index increased by 0.5% QoQ and 1.9% YoY, which was better than market expectations of 0.4% QoQ and 1.8% YoY. In turn, the US data were positive due to a moderate increase in the Services PMI. In January, the index increased from 52.8 to 53.2 points, which turned out to be better than the forecasts of 52.9 points. At the same time, Markit Manufacturing PMI over the same period decreased from 52.4 to 51.7 points against the forecast of 52.5 points.

USD/JPY

USD shows strong growth against JPY during today's Asian session. The pair quickly wins back its losses on a sharp gap down at the opening of trading. USD added about 0.21% and is preparing to test the level of 109.10 for a breakout. JPY remains quite strong amid growing uncertainty in the market. The second phase of trade negotiations between the US and China promises to be quite tense, as well as negotiations between the UK and the EU after the completion of the Brexit process in late January. An additional source of nervousness in the market remains China, where authorities are struggling with the spread of coronavirus. Finally, investors are expecting a meeting of the US Fed this week, and despite the fact that rate cuts are not expected at the end of January, official comments will have a significant impact on market dynamics.

XAU/USD

Gold prices are falling slightly during today's Asian session, correcting after the opening with the gap up. The instrument is supported by rising demand for safe assets, as the market is seriously concerned about the spread of coronavirus in China. Gold is also supported by correctional sentiment on US stock markets. In turn, macroeconomic statistics from the USA published last Friday helps to reduce the instrument. The US economy showed an increase in Composite PMI in January from 52.7 to 53.1 points, which turned out to be better than market expectations of 52.5 points.

Morning Market Review
2020-01-30

EUR/USD

EUR shows growth against USD during today's Asian session, correcting after a five-day decline, which led the instrument to updating local lows of November 29, 2019. The growth of EUR is largely due to technical factors, while the fundamental background remains ambiguous. Macroeconomic statistics on Pending Home Sales published in the United States turned out to be worse than market expectations, but was lost against the background of the Fed meeting on the interest rate. In December, the indicator decreased by 4.9% MoM after growth of 1.2% MoM in the previous month. Analysts had expected positive dynamics to remain at 0.5% MoM. Today, investors expect the publication of a large number of interesting macroeconomic statistics from Europe and the United States. German data on the Unemployment Rate for December will be the first to be released, after which the euro area will unveil a block of indicators on business sentiment for January.

GBP/USD

GBP is trading near zero against USD during today's Asian session, halting the development of the "bearish" trend that formed a week ago. GBP remains under pressure amid growing uncertainty associated with the UK's exit from the EU. Brexit should be completed before the end of January, but then the parties will continue active negotiations as part of the conclusion of a new trade agreement, which will determine how Great Britain will access European markets. A transitional period will operate during 2020, and the UK will continue to comply with European laws. Traders today are focused on the meeting of the Bank of England on the interest rate. It is expected that the monetary policy parameters will remain unchanged; however, the number of votes for a rate reduction may increase from 2 to 3. Bank of England Quarterly Inflation Report is also expected to be published.

NZD/USD

NZD is showing an active decline against USD during today's Asian session, updating local lows from December 4, 2019. The instrument loses about 0.25%, preparing to test the level of 0.6500 for a breakdown. The decline of the instrument proceeds against the background of the publication of good macroeconomic statistics from New Zealand. Export volumes from New Zealand in December rose from 5.21B to 5.54B dollars. Imports for the same period decreased from 6B to 5B dollars. Trade Balance in December showed an increase of 547M dollars MoM, after a decrease of 791M MoM in November.

USD/JPY

USD is falling against JPY during today's Asian session, continuing to develop the downward momentum that formed the day before. The instrument loses about 0.08%, testing the level of 108.90 for a breakdown. Despite the fairly strong USD, the yen continues to be in demand amid growing uncertainty. In particular, the market is still afraid of the spread of coronavirus, which negatively affects economic activity in China, which has just begun to recover from protracted trade wars with the United States. The Fed’s decision, published the day before, in general, fully met market expectations. The rate remained unchanged, and the head of the regulator, Jerome Powell, said that operations to purchase securities will continue at least until Q2 2020. At the same time, Powell, as before, did not agree with the phrase "continued quantitative easing". Inflation, according to the head of the Fed, can reach the target level of 2% in the near future.

XAU/USD

Gold prices show moderate growth during today's Asian session, continuing the development of the "bullish" momentum formed the day before. The instrument adds about 0.15%, testing the level of 1580.00 for a breakout. Quotes are supported by continued market anxiety regarding the spread of coronavirus. In addition, the instrument was supported by expectations of the Fed meeting on the interest rate. Despite the fact that in early January, the regulator did not expect any changes in monetary policy, the market is trying to find clues about further prospects for the interest rate. In turn, pressure on quotes has a steady growth in US stock markets amid strong corporate reporting. The day before, Apple reported revenue growth, reporting the highest quarterly profit in its history.

Morning Market Review
2020-01-31

EUR/USD

EUR is slightly decreasing against USD during today’s Asian session, correcting after active growth the day before, which brought the instrument to local highs of January 24. EUR is losing about 0.06%, testing the level of 1.1020 for a breakdown. Macroeconomic statistics from Europe published yesterday turned out to be mixed. Services Sentiment in the euro area in January fell from 11.3 to 11 points against the forecast of 11.2 points. The Business Climate Indicator for the same period increased from –0.32 to –0.23 points; however, it turned out to be worse than expectations of –0.19 points. Unemployment Rate in the euro area in December fell from 7.5% to 7.4%. At the end of the current trading week, investors expect the publication of January statistics on consumer inflation in the euro area. It is expected that price growth at the beginning of the month will slightly accelerate from 1.3% YoY to 1.4% YoY.

GBP/USD

GBP is trading near zero against USD during today’s Asian session, maintaining the “bullish” momentum formed the day before. GBP responded with active growth to the publication of the Bank of England meeting minutes. The British regulator kept the interest rate at the previous level of 0.75%, and the volume of the asset purchase program was maintained at the level of 435B pounds. At the same time, the distribution of votes for maintaining the rate and for its reduction also remained the same. 2 members of the regulator spoke in favor of easing monetary policy, while 7 voted for its preservation. Until the end of 2020, investors are still counting on a rate reduction. Now traders are focused on the Brexit process. Britain should leave the EU today, January 31, at 23:00 London time, after which it will begin a broad discussion with the EU in the framework of concluding a free trade agreement.

AUD/USD

AUD maintains a downward direction of trading against USD during today’s Asian session, trading near the local lows, updated the day before. The instrument loses about 0.13% and approaches the level of 0.6700. The market is focused on macroeconomic statistics from Australia on the dynamics of Producer Prices and the volume of Private Sector Credit in December. In Q4 2019, production inflation increased by 0.3% QoQ, slowing down from the previous value of 0.4% QoQ. In annual terms, prices slowed from 1.6% YoY to 1.4% YoY. Private Sector Credit volumes in December did not change and amounted to the previous 0.2% MoM. In annual terms, the indicator accelerated from 2.3% YoY to 2.4% YoY. Minor support for the instrument is also provided by Chinese data. Services PMI in January increased from 53.5 to 54.1 points with a neutral outlook.

USD/JPY

USD is showing moderate growth against JPY during today’s Asian session, correcting after the predominantly “bearish” trading session. The pressure on JPY is provided by ambiguous macroeconomic statistics from Japan. Tokyo CPI excluding Fresh Food slowed in January from 0.8% YoY to 0.7% YoY with a neutral outlook. Retail Trade in December fell by 2.6% YoY after a decrease of 2.1% YoY a month earlier. The forecast assumed a decrease of 1.8% YoY. Industrial Production in December grew by 1.3% MoM after a decline of 1% MoM in November. Analysts had expected an increase of 0.7% MoM. In annual terms, production maintained negative dynamics at the level of –3% YoY, having improved from the previous value of –8.2% YoY.

XAU/USD

Gold prices are relatively stable during today’s Asian session, but retain a weak downward momentum from the previous trading session. Gold continues to be supported by the risk of the spread of coronavirus, which to date has already led to the death of more than 170 people. Strengthening of the instrument is also facilitated by not the most stable positions in USD, which is prone to correction after the January Fed meeting on rates. Today, traders are focused on the statistics from the United States on the dynamics of Personal Income and Spending for December.

Morning Market Review
2020-02-03

EUR/USD

EUR is decreasing against USD during today’s Asian session, correcting after sharp growth at the end of last week, which brought the instrument to new local highs of January 23. EUR is losing about 0.07%, testing the level of 1.1080 for a breakdown. The instrument showed growth, despite the publication of ambiguous macroeconomic statistics last Friday. The euro area's GDP in Q4 2019 increased by 0.1% QoQ, slowing down from the previous value of 0.3% QoQ. Analysts had expected growth rate at 0.2% QoQ. In annual terms, GDP growth slowed from 1.2% YoY to 1.0% YoY, which also turned out to be worse than market expectations of 1.1% YoY. In addition, the Core Consumer Price Index rose by 1.1% YoY in January, correcting downwards from the previous 1.3% YoY with a forecast of 1.2% YoY.

GBP/USD

GBP declines slightly against USD during today's Asian session, correcting down after a confident "bullish" end of the past week. Last Friday, GBP showed strong growth, updating local highs from January 7. At the same time, there were few fundamental reasons for positive dynamics. GBP was most supported by Consumer Credit statistics. December credit volumes rose from GBP 0.653B pounds to GBP 1.218B, which was significantly better than the expectations of 0.914B. Mortgage Approvals for the same period increased from 65.514K to 67.241K with a forecast of 65.7K. Investors are focused on statistics on business activity in the UK and the USA for January.

AUD/USD

AUD is growing against USD during today's Asian session, retreating from record lows updated as a result of a steady "bearish" trend last week. The instrument adds about 0.1% and is testing the level of 0.6700 for a breakout. Investors are focused on macroeconomic statistics from Australia today. Commonwealth Bank Manufacturing PMI rose from 49.1 to 49.6 points in January, with a neutral outlook. AiG Manufacturing Performance Index in January fell from 48.3 to 45.4 points. Building Approvals issued in December fell by 0.2% MoM after 11.8% MoM growth in the previous month. Analysts had expected decline by 3% MoM. Currently, traders are preparing for the RBA meeting at the interest rate, which will be held on February 4. The rate is expected to remain unchanged on the level of 0.75%.

USD/JPY

USD is growing against JPY during today's Asian session, retreating from local lows of January 8, updated at the end of last week. The instrument adds about 0.13%, testing the level of 108.50 for a breakout. The growth of the pair is promoted by technical factors, as well as the publication of not the most successful macroeconomic statistics from Japan and China. Japan's Manufacturing PMI from Jibun Bank in January fell from 49.3 to 48.8 points with a neutral forecast. Chinese Caixin Manufacturing PMI for the same period fell from 51.5 to 51.1 points, which turned out to be worse than market expectations of 51.3 points. With the opening of the American trading session, investors are awaiting the publication of data on business activity from the United States.

XAU/USD

Gold prices are steadily declining during today's Asian session, retreating from updated local highs of January 8. The positive dynamics, supported by the growth of fears regarding the further spread of the coronavirus, gave way to a technical correction, while the fundamental growth factors of the instrument are still very strong. WHO recognized the epidemic as an emergency, which, coupled with the beginning of massive travel restrictions, poses new economic difficulties. Today, investors expect the publication of statistics on the US Manufacturing PMI in January.

Morning Market Review
2020-02-04

EUR/USD

At the opening of trading this week, the EUR/USD pair was actively declining, partially offsetting a steady growth at the end of last week. The development of the “bearish” dynamics was due to the strengthening of the US currency across the entire spectrum of the market, while the macroeconomic background provided little support to the euro. Thus, EU Markit Manufacturing PMI for January rose from 47.8 to 47.9 points with a neutral forecast. However, US PMI statistics were even better. US Markit Manufacturing PMI for January rose from 51.7 to 51.9 points with a constant forecast. ISM Manufacturing PMI for January rose from 47.8 to 50.9 points, breaking the level of 50.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing slightly, trying to recover from a sharp decline the day before. Now, the instrument has added 0.12% and is trying to consolidate above the psychological level of 1.3000. The pound fell sharply amid growing concerns about the upcoming EU-UK trade deal. Brexit has only ended, and Boris Johnson had already threatened to abandon any EU conditions and evade trade negotiations, which should determine the UK access parameters to the European market. The market did not react to macroeconomic statistics published on Monday. Manufacturing PMI for January rose from 49.8 to 50.0 points with a constant forecast.

AUD/USD

Today, during the Asian session, the AUD/USD pair is growing steadily, retreating from the lows since October 2019. Now, the instrument has added about 0.5%, testing the level of 0.6725 for a breakout. The growth of the instrument is facilitated by the results of the RBA meeting, where, as expected, the rate was left at 0.75%. In addition, the price is supported by technical factors and a sharp collapse in the Chinese stock market, which is prone to panic amid the spread of coronavirus. Yesterday’s macroeconomic statistics from Australia were ambiguous. ANZ Job Advertisements for January increased by 3.8% after a decrease of 5.7% last month. At the same time, Building Approvals for December fell by 0.2% MoM after an increase of 10.9% MoM last month. Analysts had expected a decrease of 3% MoM.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing moderately, continuing to develop the “bullish” momentum formed yesterday. A severe collapse in Chinese stock markets is supporting the dollar, while further instrument growth is limited by rising tensions over the spread of coronavirus. The position of the American currency was also supported by strong US macroeconomic statistics on business activity. So, ISM Manufacturing PMI for January rose from 47.8 to 50.9 points against the forecast of 48.5 points. The Japanese Manufacturing PMI from Jibun Bank for January fell from 49.3 to 48.8 points with a neutral forecast.

XAU/USD

Today, during the Asian session, gold prices are falling slightly, continuing to develop a “bearish” trend formed yesterday. At the beginning of the week, the weakening of the instrument was due to the steady strengthening of the American currency against the background of a sharp collapse of Chinese stock markets. In addition, the market is showing an increase in demand for risky assets due to the support measures provided by the Central Bank of China to its economy. The regulator lowered interest rates and filled the markets with additional liquidity, trying to minimize the damage from trade restrictions and partially closed state borders.