FxWirePro: Forex Daily Update

Tuesday, January 30, 2024 5:34 AM UTC

The US dollar index has been trading directionless for the past week. With no major economic data, markets eye the US FOMC monetary policy meeting tomorrow for further direction.

The escalation of the Red Sea crisis due to aggressive attacks by Yemen Houthi rebels supports the US dollar at lower levels. It hit a high of 103.82 yesterday and is currently trading around 103.45.

According to the CME Fed watch tool, the probability of a no-rate cut in Jan increased to 97.9% from 96.90% a day ago.

The US 10-year yield pared most of its gains ahead of US Fed monetary policy. The US 10 and 2-year spread narrowed to -26% from -53%.

Major resistance- 103.75/105

Major support- 102.70/101.60.

EURUSD-

EURUSD extended its decline after dovish ECB officials. ECB vice president Luis de Guindos said "There has been good news regarding the evolution of inflation, and that — sooner or later — will end up being reflected in the monetary policy,". ECB Governing Council member Mario Centeno advised starting cutting rates "sooner and more gradually". Eurozone Economic data to be watched

Spanish flash GDP, CPI, and German prelim GDP

Major resistance-1.08850,1.1000

Major support- 1.0800,1.07200

Yen-

The yen gained momentum on safe-haven demand. Any close below 146.50 confirms further bearishness.

Major Resistance- 148.80,150

Major support- 146.50,145

Canadian Dollar

The Canadian dollar was one of the best performers in the past three days due to a surge in crude oil prices. The escalation of Middle East tension is pushing oil prices higher.

Resistance- 1.3550,1.3600

Major support- 1.3400,1.3300

Jan 30th, 2024, CB Consumer Confidence (3 pm GMT)