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USD/JPY: US Vice President Biden pledges to defend US interestsAs US Vice President Biden pledges to defend US interests against China, the USD/JPY recovers from 131.00. After correcting below 131.00 during the Asian session, the USD/JPY pair has noticed a buying activity. In response to comments made by US President Joe Biden during his second State of the Union (SOTU) speech and first in front of a split Congress, the asset has seen an increase in demand. The USD/JPY pair retreats a few pips from a three-week high reached earlier this Monday as it tries to take advantage of its somewhat positive gap opening. The pair is currently trading slightly below the 132.00 level, yet up more than 0.50% for the day, and it appears that it will continue to appreciate.
Long
by FOREXN1
11
TESLA: Fundamental Analysis + Next TargetOne of the most popular stocks today is undoubtedly Tesla. Some will tell you that it is simply an overvalued automaker, while others will claim that it is a technology company that makes cars. In reality, it is a mixture of both, but investors must determine which option carries more weight. In 2022, the stock fell 65%, which gave the company's detractors exactly the result they expected. Since the beginning of 2023, however, they are already up 35%, further spurring Tesla and Musk fans. So is this a signal to buy Tesla stock? Or has the stock (once again) risen too much and too fast? Let's get to the bottom of this. CEO Elon Musk, who holds this position at Twitter, SpaceX, and many other companies, is at the center of Tesla's criticism. If you're not hiding your head in the sand, it's pretty obvious that Musk has spent a lot of time improving his new $44 billion toy, Twitter. What's worse, about 50 Tesla engineers have volunteered to work for Twitter. Obviously, this can be a bit of a distraction, and it has worried many investors. However, Tesla's latest quarterly results seem to have allayed those concerns. Tesla's Q4 production was quite impressive. While the production numbers are impressive, there are still a few numbers that may worry investors. First, the number of days of inventory (how many days it will take Tesla to run out of current car reserves) rose to 13 days, up from eight days in Q3 and four days in Q2. One could argue that 13 days is still a relatively small stockpile, but investors should keep an eye on this figure to keep it from reaching egregious levels. This would mean that Tesla is producing cars, but there is no consumer demand for them. For historical reference, that figure rose to 31 days in Q1 of 2019, so Tesla still has a lot to strive for before reaching that threshold. Another issue that investors pointed to was the pressure on Tesla's margins. Tesla's gross margin fell to 25.9% in Q4, the lowest in five quarters. Falling gross margins could indicate rising input costs or weak pricing power, and as Tesla lowers prices on its models, that figure will come under additional pressure. Nonetheless, CFO Zack Kirkhorn said during the conference call that Tesla expects future gross margins to be at least 20 percent, even with lower prices. This move will likely cause the auto industry's gross margin to fall to its lowest point in five years in 2023. Lower gross margins mean less capital to make a profit, but Tesla made up for it by cutting operating expenses by 16%, something few other companies can say for themselves in Q4. These savings allowed Tesla to post Q4 earnings per share (EPS) of $1.07 - up 57%. So even though Tesla investors need to watch out for a few items - margins and inventories - financially the quarter was excellent. But even the best companies bought at the wrong price can be a bad investment, so is it time to buy Tesla? At its core, there is a huge gap between how bears and bulls think Tesla should be priced. Tesla is currently trading at 49 times its earnings, which isn't too bad compared to the 100 times or more it was trading at in 2021. However, if you look at Tesla's projected price to earnings (P/E), you see a different trend. Since Tesla's trailing P/E ratio is about the same as its forward P/E, analysts believe that Tesla's earnings will barely rise from the 2022 level. In 2023, Tesla plans to achieve a 50% compound annual growth rate in vehicle deliveries from 2020, which means about 1.7 million deliveries in 2023, or 29% more than in 2022. Even with a slight decline in gross margins, if Tesla can meet its delivery target, it will likely beat earnings forecasts, making the stock seem cheaper than it actually is. Nevertheless, 45 times earnings projections is not a cheap price for any company. If you have your heart set on Tesla over the long term, buying the stock now and holding on to it (while you watch the business grow) may be a smart move. However, valuation is still a risk, and if Tesla falters and fails to meet its projections, the stock could sell off quickly. Tesla is far from the safest asset, but at these levels, it still represents an intriguing investment opportunity.
NASDAQ:TSLALong
by FOREXN1
25
XAU/USD: Possible Values Decline for the Yellow metalAs the Dollar continues to retrace its steps from four-week highs, the gold market hopes to capitalize on recent recovery gains. Will XAU/USD break $1,850 during Powell's speech as Fed Chair? As investors stay away ahead of Jerome Powell's speech, the US dollar is currently declining from monthly highs. His remarks are likely to spark a new bout of volatility, which could provide the USD a new lift at the expense of Gold.
OANDA:XAUUSD
by FOREXN1
18
EUR/USD holds above 1.0700, eyes on PowellEarly in the European session, the EUR/USD dipped around 1.0700 but held above it. Jerome Powell, the chairman of the FOMC, and other ECB officials are scheduled to speak to the public soon. Until then, the pair is unable to decide which way to go. The Fibonacci 61.8% retracement level of the most recent rise for the EUR/USD remains within touching distance, and the Relative Strength Index (RSI) indicator on the four-hour chart maintains an oversold reading below 30. Yesterday, February 6, a moderately negative sentiment prevailed on global stock markets as investors were concerned about the prospect of further monetary policy tightening by the leading central banks. Thus, the head of the ECB Christine Lagarde said last week that in March the markets should expect another raise of 50 bp. She also stressed that the European regulator is prepared to set rates at any level for achieving the goal of 2% inflation in time. Head of the Federal Reserve System Jerome Powell, while noting that he sees signs of lowering price pressures, said that it is appropriate to continue raising rates. At the same time, strong January data on employment in the United States, which showed a jump in the number of jobs by more than half a million, showed on Friday that the Federal Reserve has all the arguments to maintain a tight monetary policy for a long time. We should also note that some pressure on stocks at the end of last week was put by disappointing reports from U.S. tech giants Amazon and Alphabet.
Short
by FOREXN1
13
USD/JPY: 120 looks like the target this year – INGIn the view of economists at ING, USD/JPY should continue to fall throughout the year. They target 120. The BoJ is back on the map “The Bank of Japan is now garnering much more focus than it has in years. Most pressing is the replacement of Governor Haruhiko Kuroda, who leaves in April. A successor will be presented to parliament on 10 February. The favourite, Deputy Governor Masayoshi Amamiya, is seen as the dovish continuity candidate.” “Any surprise choice of the more hawkish Hiroshi Nakaso could probably send the Yen a lot stronger, with pressure building for 10-year JGB yields to burst above their current 0.50% ceiling.” “USD/JPY has mainly been driven by the weaker Dollar story, but 120 looks like the target this year, helped by the BoJ and lower energy prices.”
by FOREXN1
5
BITCOIN: Possible New Bullish impulse to $26k and OverLast year was characterized by a tightening of monetary policy as higher interest rates were introduced to combat rising inflation. As a result, investors became disillusioned with risky assets, including growth stocks and cryptocurrencies. Even bitcoin suffered a crushing defeat, falling 65% in 2022. But things may be changing for the better, as bitcoin jumped 37% in January. Can this cryptocurrency reach the $100,000 per coin mark? At less than $23,000, this price target implies a rise of more than 300%. Let's take a closer look at why this could be very realistic. After hitting its 2022 low in November, bitcoin has made a meteoric comeback. And this impressive dynamic echoes what we are seeing in the stock markets. The Nasdaq Composite Index, for example, was up 11% in January. And the S&P 500 Index also had a strong start to the year. While it is usually futile to try to explain such short-term price movements, part of the credit is due to inflationary trends. The Consumer Price Index rose 6.5% year-over-year in December, continuing the slowdown in that measure. And that made investors breathe a sigh of relief. Moreover, the Federal Reserve announced a 25 basis point rate hike at its most recent meeting. A loosening or easing of monetary policy is a good sign for investors, as it can boost economic growth and lead to higher portfolio values. As the crypto-winter winds down and asset prices possibly continue to rise, there is a fear of missing out. And this will bring new investors into the cryptocurrency space and bitcoin in particular, providing further support for prices. Aside from bitcoin's immediate catalyst, which is cooling inflation and forcing the U.S. Federal Reserve to eventually stop raising rates, there is another compelling argument for why investors should own this leading cryptocurrency. And this argument focuses on the bigger picture, with an eye on the long term. The most popular argument for bitcoin is that it will become a more meaningful store of value. Skeptics will be quick to point to the steep drop in bitcoin's price in 2022 as a clear sign that it is a bad hedge against inflation. But if we look at the last five years, bitcoin has risen 154% compared to gold's 43% rise. Bitcoin's superiority becomes all the more noticeable the further back you look. However, why would anyone want to own bitcoin? In the third quarter of last year, the debt-to-GDP ratio was 120%, which is about as high as it has ever been. And while that figure has fallen since the pandemic began, according to a study by the Wharton School at the University of Pennsylvania, the debt-to-GDP ratio will be 225% by 2050. Even now, the U.S. government is in a potentially dire situation, as it must once again raise the debt ceiling to avoid defaulting on its loans. So owning bitcoin can be seen as insurance against financial catastrophe since it will undoubtedly become an attractive place to store wealth if things go badly. It's easy to see that bitcoin, as a widely held asset holding value, could easily soar to a price of $100,000 or more. It all depends on investor sentiment and awareness of the nature of bitcoin, as well as the deteriorating financial situation of governments around the world. It is not a good idea to bet that bitcoin will reach $100,000 in 2023, as that is too short a time horizon to make accurate predictions. However, if we had to bet on it reaching the six-figure mark in the next five years, it would be done in a heartbeat. It's just getting to a point where it's hard to ignore. And the evolving ecosystem of financial service providers makes it extremely easy to master. Consequently, investors should invest 1% of their net worth in bitcoin. It won't be as smooth, of course, but the upside potential is enormous.
COINBASE:BTCUSDLong
by FOREXN1
22
GBP/USD faces further weakness near termAs described in our last idea on GBP/USD a Double top occurred after the release of economic news. Economist Lee Sue Ann and market strategist Quek Ser Leang at UOB Group believe that further declines in the GBP/USD exchange rate are still likely to occur over the coming weeks. Key Quotes Day and Night: Even though we anticipated a decline in the value of the pound last Friday, we maintained that "1.2120 is unlikely to be in danger." GBP, however, lost more ground than was anticipated, falling as low as 1.2047. The slide has room to go down to the support of 1.2000 even if it is plainly oversold before stabilization is probable. The next support level at 1.1950 is probably out of reach right now. Resistance is at 1.2100, but stabilization of the GBP's weakening would only be indicated by a breach of 1.2150.
by FOREXN1
11
How will the announcement of the NFP payrolls affect EUR/USD ? US Nonfarm Payrolls report is expected to show 185K job gains in January, lowest number in more than two years. On February 3rd at 13.30 GMT, the US Bureau of Labor Statistics (BLS) will release the Nonfarm Payrolls (NFP) report. The market anticipates that during January, the US economy created 185K new employment. A worse-than-expected result appears to be in the cards as the US ADP private sector payrolls plunged to 106K in January, unexpectedly falling short of the 178K consensus and lower than the 253K from the previous month. Lower US job numbers could prolong the USD's decline. The US Dollar has been drifting near 10-month lows against its main competitors as markets interpreted Jerome Powell's most recent remarks as mostly dovish. Markets believe the Fed may be nearing the end of its tightening cycle since Powell frequently mentioned the "disinflationary" process that currently seems to be under way during a news conference. The USD's decline is justified by this, but the move might have gone too far. If the Nonfarm Payrolls headline data surprises positively, this should signal the approaching of an upward correction in the US Dollar. How will the announcement of the nonfarm payrolls affect the EUR/USD? The nonfarm payrolls report will be released on February 3 at 13:30 GMT. The Federal Reserve and the European Central Bank made dovish monetary policy decisions, and as the dust has settled, the EUR/USD pair has entered a stage of negative consolidation near the 1.0900 mark. Weaker US employment data could lead to another decline in the USD and give the main currency pair more support. In contrast, any good surprise might give the USD recovery more traction, albeit any gains might be constrained given the growing likelihood that the US central bank will stop raising interest rates. This rekindles the bearish sentiment toward the US dollar and suggests that the EUR/USD pair should move upward along the line of least resistance.
by FOREXN1
21
USD/JPY is stuck in a range around mid-128,000 waiting US-NFPThe USD/JPY pair oscillates in a constrained range on Friday as it fails to build on the previous day's small recovery from close to the two-week low of 128.00. Spot prices remain stable above mid-128.00s throughout the early European session, oscillating between tepid gains and slight losses. The US Dollar is seen operating as a tailwind for the USD/JPY pair as it moves higher on the final day of the week and aims to build on its rebound from a nine-month low set on Thursday. The US dollar's increase may be linked to some repositioning trading before the release of the much anticipated US monthly jobs report later in the early North American session. The underlying resilience in the labor market was highlighted by the US Weekly Initial Jobless Claims data issued on Thursday, which raised hopes for robust Nonfarm Payrolls (NFP). As a result, investors were obliged to reassess their predictions for future rate increases by the Fed, which helped to sustain the USD. However, lower US Treasury bond yields limit the amount of profit. The Bank of Japan (BoJ), on the other hand, is expected to adopt a more hawkish position later this year, which is expected to bolster the Japanese Yen. The Nationwide Core Inflation Rate for Japan, which recorded its highest annualized reading since December 1981, helped to increase the bets. This is considered to be another element that, at least temporarily, restrains the USD/JPY pair. In the wake of the overnight breach below a symmetrical triangle and before of the important US macro data, bullish traders also appear cautious to place new bets. However, it appears that the USD/JPY pair will experience losses for the first time in three weeks.
Short
by FOREXN1
18
XAU/USD eyes smooth run-up towards $1,980 The tide appears to have changed once more in favor of Gold buyers. The price of gold is currently above $1,950, where it has been for the past ten months. For XAU/USD to continue rising, it must overcome the $1,960 resistance. The US Federal Reserve rise of 0.25%, which was widely anticipated and priced in, drowned the US Dollar the day before, causing the price of gold to spike. The Fed announcement indicating declining inflation pressure and Chairman Jerome Powell's suggestions of rate reduction by late 2023 if inflation lowers quicker, however, received the majority of attention. Additionally helping the XAU/USD bulls were negative US data, expectations of additional Chinese stimulus, positive stocks, and lower US Treasury bond yields.
OANDA:XAUUSD
by FOREXN1
23
EUR/USD: There is not much resistance now until the 1.12 area Impressive gains were made by EUR/USD, which moved above 1.1000 for the first time since early April. ING economists concur that the 1.12 level is clearly in reach. The EUR/USD news is good: The EUR/USD is expected to be driven more this year by a strong narrowing in rate differentials, which should take it to the 1.15 level in the second quarter. There isn't much opposition in the near term till the 1.12 region. However, buy-side positioning in the Euro is at its longest level since the summer of 2021, suggesting that the rally may be challenging. However, the EUR/USD story is encouraging.
by FOREXN1
13
GBP/USD faces rejection near 1.2400 - Double Top ?GBP/USD has lost its bullish vigor after Wednesday's recovery toward 1.2400. Prior to the Bank of England's (BOE) policy announcements, investors refrain from placing bets on future Pound Sterling strength, and the near-term technical outlook indicates a lack of buyer demand. The gains in GBP/USD remain modest, especially when compared to EUR/USD, notwithstanding the intense selling pressure surrounding the US Dollar late on Wednesday. The decision to hike the policy rate by 25 basis points was made, and FOMC Chairman Jerome Powell maintained that more rate rises will be appropriate. However, his admission of the disinflation in goods led to a decline in the US dollar. Powell also acknowledged that a quicker-than-anticipated decrease in inflation will be reflected in upcoming policy choices, which raises the prospect of a policy change later in the year. The BOE is anticipated to increase its policy rate by 50 basis points to 4% from 3.5% on Thursday. Tenreyro and Dhingra, two BOE Monetary Policy Committee (MPC) members, voted in December to maintain rates at 3%.
by FOREXN1
5
GBP/CAD has lost its bullish vigor after Wednesday's recovery.GBP/CAD has lost its bullish vigor after Wednesday's recovery toward 1.6600. Prior to the Bank of England's (BOE) policy announcements, investors refrain from placing bets on future Pound Sterling strength, and the near-term technical outlook indicates a lack of buyer demand. The Bank of England is expected to increase the interest rate by 50 basis points. There are two important things to focus on here: firstly, the bank’s take on the interest rate and how long it thinks inflation will take to come close to its target. Secondly, where is the upper limit of the bank’s interest rate.
by FOREXN1
3
The Federal Reserve's decision appears to promote buying GOLDThe Federal Reserve's decision looks to support the "buy the dips" strategy for gold. As traders stay away from the market ahead of the crucial Fed monetary policy announcement, the price of gold is floating aimlessly below $1,930 early on Wednesday. Weak US Treasury bond yields and cautious markets are making it difficult for the US Dollar to gain momentum. Gold bulls trade cautiously as we approach the crucial US Federal Reserve policy statement because of the active rising wedge collapse. On Tuesday, the shiny metal fell quickly to the $1,900 mark before mounting a strong recovery. From a short-term technical standpoint, this shows that the gold price is still a "buy the dips" play. The impending Fed event will provide the price of gold a definite direction for the ensuing weeks. To counteract the recent pessimistic sentiment, Gold purchasers must find acceptance above the $1,935 barrier. The advance higher could test the psychological threshold of $1,950 further up before advancing on the $1,960 supply zone.
OANDA:XAUUSD
by FOREXN1
15
GBP/USD trades in a range above 1.2300 as the Fed nearsIn early Europe, the GBP/USD is finding it difficult to move significantly higher than 1.2300. The pair is still supported as the US Dollar licks its wounds, US Treasury yields decline, and traders exercise caution before the Fed announces its policy decisions. US PMIs will also be monitored. The markets appear to be confident that the US central bank would moderate its aggressive approach and announce a lower 25 bps rate hike on Wednesday at the conclusion of a two-day meeting. This impacts on the USD and keeps US Treasury bond yields low. Trading participants appear hesitant to make big bearish wagers on the USD/JPY pair as the significant central bank event risk approaches. In addition, remarks made by BoJ Governor Kuroda Haruhiko, who stated that the bank must maintain its loose monetary policy and 2% inflation objective, limit the JPY's upward potential. This calls for more care before positioning for any appreciable significant fall, at least initially.
by FOREXN1
9
USD/JPY:Trading participants appear hesitant to make big bearishTrading in USD/JPY is restricted to a small range as investors eagerly anticipate the FOMC decision. Throughout the early portion of Wednesday's European session, the USD/JPY pair struggles to generate any noticeable momentum and swings between tepid gains and modest losses. As traders look hesitant and anxiously await the results of a two-day FOMC monetary policy meeting, spot prices linger below the mid-130.00s. On Monday, the USD/JPY pair experiences some intraday selling at the 130.30 region and declines by more than 100 pip from the day's peak. However, spot prices are still firmly inside a trading range that dates back a week and have now appeared to have stabilized above the mid-129.00s during the early European session. Fresh concern that high inflation may prompt a more hawkish posture from the Bank of Japan later this year is continuing to bolster the Japanese Yen (JPY). In addition, a generally negative outlook for the equities markets supports the safe-haven JPY. The USD/JPY pair has some downward pressure as a result, which adds to the overall adverse sentiment around the US Dollar and the intraday decline. In fact, as expectations for a less aggressive Fed policy tightening increase, the USD Index, which measures the value of the dollar against a basket of currencies, is currently hovering close to a multi-month low. The markets appear to be confident that the US central bank would moderate its aggressive approach and announce a lower 25 bps rate hike on Wednesday at the conclusion of a two-day meeting. This impacts on the USD and keeps US Treasury bond yields low. Trading participants appear hesitant to make big bearish wagers on the USD/JPY pair as the significant central bank event risk approaches. In addition, remarks made by BoJ Governor Kuroda Haruhiko, who stated that the bank must maintain its loose monetary policy and 2% inflation objective, limit the JPY's upward potential. This calls for more care before positioning for any appreciable significant fall, at least initially.
by FOREXN1
8