The Japanese yen whipsawed on Friday's European session following the reports indicating that the Japanese government plans to tap former Bank of Japan Policy Board member Kazuo Ueda as the central bank's next governor. The government is expected to present the nominees to parliament next Tuesday.
The yen appreciated almost 180 pips against the US dollar to 129.80 yen per dollar after the news was released. However, as of this writing, the USDJPY rebounded back to above 131 after BoJ governor nominee Ueda said BoJ's monetary Policy Is appropriate and needs to continue the easy policy.
US stock futures slightly recovered from the previous session's losses. On Thursday, Wall Street ended lower on hawkish comments from Federal Reserve policymakers and disappointing earnings results from the ride-hailing giant LYFT. Meanwhile, the UK shared reversed from the weekly highs after the release of the weaker-than-expected UK GDP report.
Crude oil futures gain sharply on Friday morning after Russian Deputy Prime Minister Alexander Novak announced on Friday that Russia is aiming to voluntarily cut its oil output by 500,000 barrels per day, starting in March, in an effort to "restore market relations." “Price cap on Russian oil and oil products is interference in market relations” – Novak said.
In the currency market, Euro remains one of the weakest currency pairs of this week. As of this writing, EURUSD hovers near the 1.0700 area. The Australian dollar struggling to regain momentum following the RBA’s latest monetary policy statement showed that the central bank revised its inflation forecasts higher for this year, saying price pressures were spreading into services and wages. The market is pricing in a 76% chance the RBA increases rates by 25 basis points at their March meeting.
Bears take control of precious metals, especially the gold price. Moving ahead to the North American session, gold traders and investors should closely monitor the release of Michigan consumer sentiment data and Fed Governor Christopher Waller's speech which might have a very high impact on the dollar which will result in an impact on the gold price.
On the data front, China's consumer price index (CPI), a main gauge of inflation, rose 2.1 percent year on year in January, but below market expectations of 2.2%. On a monthly basis, consumer prices increased 0.8% in January, compared with a consensus of 0.7%.
Moving ahead today, the important events to watch:
Canada – Employment report: GMT – 13.30
US – Michigan consumer sentiment: GMT – 15:00
Worldwide, more than 676 million people have been confirmed infected and more than 6.77 million have died. The United States has confirmed over 104 million cases and has had more than 1.13 million deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: Technically the overall momentum remained bearish for the pair after the bulls failed to extend the rally. In the short term, if the price breaks below 1.0660 it would open doors toward 1.0600. On the upper side, the first immediate resistance is around 1.0730 and then 1.0770.
The important levels to watch for today: Support- 1.0680 and 1.0650 Resistance- 1.0730 and 1.0770.
GOLD: For today, $1850 is the immediate support level, followed by $1848. If the metal breaks below the $1,848, the slump will quickly extend toward the $1840/35 mark. On the upper side, gold is likely to find immediate resistance at $1873 then 1880.
The important levels to watch for today: Support- 1852 and 1840 Resistance- 1873 and 1880.
Quote of the day - “All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.” — Peter Lynch