Trading Week Ahead: 24th – 28th January
The Weekly Wrap
The rout in risk continued last week with crypto crashing, the Nasdaq nosediving and even gold and oil falling to hold most of their early week gains. It was the most volatile assets that suffered the worst, however. Bitcoin slid to 35,000 while ETH broke the 3,000 support level to fall quickly to 2,500.
The biggest pain in terms of flow, not percentage was in the Nasdaq which did something it hasn’t done since the aftermath of the Internet bubble: fall more than 1% in every session of a week. In contrast, FX was relatively tame with most of the majors contained to 100 pip ranges, except for USDJPY which fell in tandem with risk assets and may tumble towards the key 110 big figure if this sell-off continues.
A Look Ahead to This Week
This week the data flow will begin to show if the weakness in the financial markets is starting to seep into the real economy. Monday brings the PMI data from Australia, Europe, and the UK with investors getting a first look at the Omicron impact.
The latest high-frequency data points have been trending the wrong way in recent weeks, so if the releases disappoint we may see yet more liquidation as the week proceeds.
Midweek, the focus turns to North America with both BOC and Fed meetings on tap on Wednesday. Neither central bank is expected to move, but markets will be watching the rhetoric. At this point rate hikes are assumed to be starting in March, but given the turmoil in financial markets, it will be interesting to see if monetary authorities start to back away from their uber hawkish bias, leaving the rate hike question in doubt.
About Boris Boris Schlossberg is Managing Director of FX Strategy for BK Asset Management, Co-Founder of BKForex.com, and Managing Editor of 60secondinvestor.com.
Widely known as a leading foreign exchange expert, Boris has more than three decades of financial market experience.
In 2007, while still at FXCM, Boris started BKForex with Ms. Kathy Lien. A year later, Boris joined Global Futures & Forex Ltd as director of currency research where he provided research and analysis to clients and managed a global foreign exchange analysis team with Kathy Lien.
Since 2012 Boris has focused exclusively on running BKForex.com where he generates trade ideas and designs algorithms for the FX market in partnership with Ms. Lien.
He is the author of “Technical Analysis of the Currency Market” and “Millionaire Traders: How Everyday People Beat Wall Street at its Own Game”, both of which are published by Wiley.
In 2020 Mr. Schlossberg started www.60secondinvestor.com a free website that distills the best of institutional investment research for retail investors.
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