January 27 2022
The US Federal Reserve Chair Jerome Powell has warned markets that he will do whatever it takes to get tough on inflation. Starting in March the FOMC is expected raise US Interest rates. However, It may take more hikes than the market currently has priced in to tame inflation in 2022.
Finally, the EURUSD is below 1.1270/80 which will now provide immediate resistance. Support is found at 1.1220/1.1210 and then 1.1180.
The GBP Is sitting just above key support at 1.3440 this morning, having failed to build on gains yesterday at the 1.3530 level.
If the GBP breaks 1.3440 the next target on the downside will be 1.3380 Resistance will be now be found at at 1.3490 and of course 1.3530.
The USD moved up against the JPY, as the market forgot the Yen’s safe haven status for the attraction of higher US Interest rates.
Today you will find buyers on dips, with 114.20 now the key support that needs to hold. If broken then you will see more USD weakness to 113.50 again.
Resistance is at 115.00 a break here will encourage the USD bulls to push on to 115.60
Gold broke below 1830.00 on the back of a higher dollar and the prospect of much higher US Interest rates.
Unless Gold can recover back above 1830, the downside looks the least path of resistance. Support is at 1814/1812 and if broken you will target 1804 and possibly 1798.00
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