market influence

Analysis of transactions and tips for trading USD/JPY Further growth became limited because the test of 149.04 coincided with the sharp rise of the MACD line from zero. The second test, on the other hand, took place when the MACD line returned from the overbought area, providing a signal to sell. This led to a price decrease of over 50 pips. The Bank of Japan's intervention holds significant importance for the currency market. But for today, the pair's decline will be influenced by data from the US labor market, where unemployment figures will decrease to 3.7%. A sharp reduction in the number of new jobs in September could also weaken dollar, leading to an active sale of USD/JPY. Otherwise, if the data surpass forecasts even by a small margin, the pair will continue to rise, once again reaching 150 yen per dollar. Data on average hourly earnings in the US could also influence market sentiment, unlike the interview with FOMC member Christopher Waller.   For long positions: Buy when the price hits 149.04 (green line on the chart) and take profit at 150.03. Growth will only be possible amid very strong data from the US labor market, continuing the bullish trend. When buying, ensure that the MACD line lies above zero or just starts to rise from it. Also consider buying USD/JPY after two consecutive price tests of 148.65, but the MACD line should be in the oversold area as only by that will the market reverse to 149.04 and 150.03. For short positions: Sell when the price reaches 148.65 (red line on the chart) and take profit at 147.77. Pressure will return in the event of a sharp reduction in jobs in the US and weak statistics. When selling, ensure that the MACD line lies below zero or drops down from it. Also consider selling USD/JPY after two consecutive price tests of 149.04, but the MACD line should be in the overbought area as only by that will the market reverse to 148.65 and 147.77.     What's on the chart: Thin green line - entry price at which you can buy USD/JPY Thick green line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further growth above this level is unlikely. Thin red line - entry price at which you can sell USD/JPY Thick red line - estimated price where you can set Take-Profit (TP) or manually fix profits, as further decline below this level is unlikely. MACD line- it is important to be guided by overbought and oversold areas when entering the market   Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decision based on the current market situation is an inherently losing strategy for an intraday trader.  

EUR: Lagarde may sound more hawkish in Davos The data inputs for EUR/USD will mostly come from Germany this week, with 2023 GDP figures today and the ZEW survey tomorrow along with final CPI numbers. We have often discussed how European Central Bank rate cut expectations appear way too aggressive (150bp by year-end), although the dovish members of the bank have failed to deliver a coordinated pushback. Despite ECB hawks' protests against dovish expectations having had little impact on the market, the WEF event in Davos this week – which sees many ECB speakers including President Christine Lagarde – should not be overlooked. Lagarde has a greater potential to influence markets given a clearly divided Governing Council, and we suspect that she will opt for a more hawkish tone compared to last week’s comments. There may be some help for the euro coming from Davos, although we should be wary. Fed expectations have been resistant to data and the same could hold true for the ECB as well. The minutes from the December policy meeting are also released this week. We still think it is premature for EUR/USD to trade sustainably above 1.10. Elsewhere, Sweden published inflation figures today. CPIF declined to 2.3% from 3.6% (consensus 2.2%), although the core measure excluding energy remained high, slowing from 5.4% to 5.3% versus a consensus of 5.2%. Despite this, it remains unlikely that the Riksbank will tighten policy again. If anything, this modestly raises the chances that another round of FX sales will be started after the current reserve hedging programme ends in early February (in our view).