Bet some people got hurt on BTC this morning!

Australian and Canadian Dollars fall against Pound as China's policy costs dear


As this week begins, yet another strengthening is very apparent for the British Pound against two major currencies, those being the Canadian Dollar and the Australian Dollar.

The Pound has been doing very well against all of its peers recently, largely because of the inability of the British government to do what the public and investing community expected it to do this winter, and lock down the nation again.

There is a theory among many people across Europe that Britain would have followed the actions of its mainland European neighbours and inflicted a lockdown on its population and that it was possibly already being planned for months in advance, however the wheels came off when the revelations about a number of government officials having had one or more informal gatherings during the period in which they were insisting on compliance with lockdowns.

This has angered a large proportion of citizens and business owners who had not been allowed to operate during that particular period, whereas the government officials having the alleged parties were not afraid of anything, nor were abiding by the strict rules they doled out.

As a result, it would have been impossible to implement any further restrictions on anyone in Britain, therefore the pleasant surprise came when Prime Minister Boris Johnson announced that there would be a complete removal of all remaining restrictions, and Britain is now open and free.

The same cannot be said for many other parts of the world, and whilst the British Pound continues to climb against all other major currencies, it is the Canadian Dollar and Australian Dollar that are falling against the currency of the most free nation in the West at the moment.

This is because not only do restrictions still exist in Canada and are in full swing in Australia, but the two currencies are commodity-reliant, whereas the British Pound is not.

Why is that important?

It is important because the already heavily restricted nations of Canada and Australia are dependent on the large commodity trading centers of Toronto and Sydney, and both of those commodity centers are part of a massive trade union with China.

China at the moment is instigating a 'zero-Covid' policy across its mainland, which is a media-friendly term for total control over every activity and draconian restrictions on movement and business.

In Canada, the analysts are stating their case for the reason why the Canadian Dollar has dipped, with Bank of Montreal Capital Markets' European Head of FX Strategy Stephen Gallo having told CNBC that ripple effects from China could be feeding into the performance of developed market commodity-based currencies.

Yes, consumable commodities such as oil and gas have risen in price during recent months, but there are other areas of the commodity market that have had an effect on commodity-dependent currencies.

The very same bank's Head of FX Strategy Greg Anderson stated that the two-year swap rates for Australian and New Zealand dollars had underperformed the U.S. dollar, which would perhaps indicate toward a theory that central bank policy divergence is a factor.

However, the Canadian swap rate has performed very similarly to the U.S., so this does not explain why CAD has not rallied alongside oil, according to the analyst.

In China, there were closures of factories along with electricity power cuts last year as part of the strict restrictions on people's movement in China, and it is known that the country is operating a 'zero-Covid' policy and such a policy is likely to have severe implications for both supply and demand and in particular it could conceivably be affecting China’s demand for certain raw materials.

By contrast, the British economy is more reliant on international investment, its own diversified industry base and the financial markets center in London which also has a vast equities trading contingent on the London Stock Exchange and is not so dependent on raw materials or commodities.

The British Pound starts the trading week at a five-day high against the Australian Dollar, at a value of 1.89 Australian Dollars to the Pound, and it had held a high point against the Canadian Dollar during the off-market hours at the weekend at 1.7 Canadian Dollars to the Pound, before dropping slightly this morning.

There is a crossroads in the currency market at the moment, that being the buoyancy of the majors that are sovereign currencies of nations with no lockdowns or restrictions and a diversified local industry base, compared to the flagging values of those reliant on trade with China, have high commodities dependency and have a myriad of restrictions still in force.

It's certainly a different world this January to that of even one year ago.


FXOpen Blog

EUR/USD Faces Hurdles, USD/JPY Could Recover


EUR/USD started a fresh decline from well above 1.1380. USD/JPY remained in a bearish zone and settled below the 114.50 pivot level.

Important Takeaways for EUR/USD and USD/JPY

• The Euro started a fresh decline after there was no close above the 1.1420 level.
• There is a key bearish trend line forming with resistance near 1.1308 on the hourly chart of EUR/USD.
• USD/JPY started a fresh decline from well above the 114.50 pivot zone.
• There is a short-term rising channel forming with resistance near 114.20 on the hourly chart.

EUR/USD Technical Analysis


Recently, the Euro failed to clear the 1.1420 zone against the US Dollar. The EUR/USD pair started a fresh decline and traded below the 1.1350 support zone.

The pair even broke the 1.1320 level and settled below the 50 hourly simple moving average. A low was formed near 1.1263 on FXOpen and the pair is now correcting higher. There was a move above the 50% Fib retracement level of the recent decline from the 1.1334 swing high to 1.1263 low.

EUR/USD Hourly Chart

An immediate resistance on the upside is near the 1.1305 level. There is also a key bearish trend line forming with resistance near 1.1308 on the hourly chart of EUR/USD.

The trend line is near the 61.8% Fib retracement level of the recent decline from the 1.1334 swing high to 1.1263 low. The next major resistance is near the 1.1320 level. The main resistance is near the 1.1350 level and the 50 hourly simple moving average.

If there is no break above 1.1308, the pair might start a fresh decline. An immediate support is near the 1.1288. The next major support is near 1.1265, below which the pair could drop to 1.1220 in the near term.

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Gold Price Nosedives While Crude Oil Price Extends Rally


Gold price started a fresh decline from the $1,850 resistance zone. Crude oil price is rising and might continue to gain momentum above $87.00.

Important Takeaways for Gold and Oil

• Gold price started a major decline from the $1,850 against the US Dollar.
• There was a break below a key contracting triangle with support near $1,840 on the hourly chart of gold.
• Crude oil price started a steady increase after it cleared the $85.00 resistance.
• There is a major bullish trend line forming with support near $86.20 on the hourly chart of XTI/USD.

Gold Price Technical Analysis

Gold price attempted a key upside break above $1,850 against the US Dollar. However, the price failed to gain strength above $1,850 and started a major decline.

There was a clear move below the $1,820 level and the 50 hourly simple moving average. Besides, there was a break below a key contracting triangle with support near $1,840 on the hourly chart of gold.

Gold Price Hourly Chart


The price even declined below the $1,800 level and settled below the 50 hourly simple moving average. A low is formed near $1,791 and is currently consolidating losses. On the upside, the price is facing resistance near the $1,800 level.

The first major resistance is near the $1,805 level. It is near the 23.6% Fib retracement level of the downward move from the $1,853 swing high to $1,791 low.

The main resistance is now forming near the $1,820 level. The 50% Fib retracement level of the downward move from the $1,853 swing high to $1,791 low is also near the $1,820 level. A close above the $1,820 level could open the doors for a steady increase towards $1,840.

The next major resistance sits near the $1,850 level. On the downside, an initial support is near the $1,790 level. The first major support is near the $1,780 level.

A downside break below the $1,780 support zone may possibly spark a steady decline. In the stated case, the price could test the $1,750 support.

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This Week’s Most Anticipated Central Banks’ Decisions


The month's last trading day is here, and no important economic events are due. However, the week ahead is full of macro-events to move financial markets, such as three central banks announcing their policy decisions, and the NFP report scheduled for next Friday.

The Australian dollar traders are on high alert since the Reserve Bank of Australia is scheduled to release its monetary policy tomorrow. Markets have priced in several hikes from the RBA.

However, the central bank's narrative was rather dovish, as the Australian economy is affected by the Chinese zero-covid policy. Therefore, the forward guidance from the RBA is more important for the Australian dollar than the actual interest rate decision.


While the RBA is not expected to move the cash rate, the Bank of England will likely hike at its next Thursday meeting. A 25 basis points rate hike is priced in, and so the British pound traders are on the lookout for the Bank of England's guidance regarding future rate hikes.

On the same day as the Bank of England, the European Central Bank will hold its press conference and present its own monetary policy statement. This is one central bank in no hurry to raise the rates, which is extraordinary to consider in a rising inflation environment; the ECB holds the deposit facility rate below zero.

Big Tech Giants to Report Quarterly Earnings This Week

The week ahead is full of major US corporations presenting their Q4 2021 earnings (with the exception of Qualcomm that will present its Q1 2021 report). Here are some names to consider as their earnings may trigger important swings in the equity market:

• Alphabet – January 31, 2022
• Facebook –February 1, 2022
• Amazon – February 2, 2022
• ExxonMobil – February 1, 2022
• Eli Lilly – February 3, 2022
• Qualcomm – Q1 2021 earnings – February 1, 2022
• Honeywell – February 2, 2022
• Ford – February 3, 2022

All in all, volatility is set to rise this week as momentum builds up for the NFP report release on Friday. Further improvements in the unemployment rate should make the Fed set foot on the path of more aggressive tightening.

FXOpen Blog

EUR/USD Gains Momentum, USD/CHF Signals Downside Break


EUR/USD started a recovery wave above 1.1220 and 1.1240. USD/CHF is declining and trading below the 0.9250 support zone.

Important Takeaways for EUR/USD and USD/CHF

• The Euro started an upside correction above the 1.1250 resistance zone against the US Dollar.
• There was a break above a major bearish trend line with resistance near 1.1230 on the hourly chart of EUR/USD.
• USD/CHF started a downside correction from the 0.9340 resistance zone.
• There was a break below a key bullish trend line with support near 0.9295 on the hourly chart.

EUR/USD Technical Analysis


The Euro started a major decline from well above the 1.1350 level against the US Dollar. The EUR/USD pair traded below the 1.1250 support zone to move into a bearish zone.

The pair traded as low as 1.1121 on FXOpen and recently started an upside correction. The pair was able to clear the 1.1200 resistance zone and the 50 hourly simple moving average. There was a move above the 50% Fib retracement level of the key decline from the 1.1359 swing high to 1.1121 low.

Besides, there was a break above a major bearish trend line with resistance near 1.1230 on the hourly chart of EUR/USD. It is now trading above 1.1250 level and the 61.8% Fib retracement level of the key decline from the 1.1359 swing high to 1.1121 low.

On the upside, an initial resistance is near the 1.1300 level. The next major resistance is near the 1.1320 zone. A clear upside break above the 1.1320 zone could open the doors for a steady move.

The next major resistance sits near the 1.1420 level. On the downside, an immediate support is near the 1.1240 level. The next major support is near the 1.1220 level. A downside break below the 1.1220 support could start another decline.

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AUD/USD and NZD/USD Target More Upsides


AUD/USD started a fresh increase from the 0.6965 zone. NZD/USD is also rising and there was a clear move above the 0.6650 resistance.

Important Takeaways for AUD/USD and NZD/USD

• The Aussie Dollar started a fresh increase after it cleared 0.7000 against the US Dollar.
• There was a break above a couple of bullish patterns near 0.7070 and 0.7130 on the hourly chart of AUD/USD.
• NZD/USD also climbed higher after forming a base above the 0.6540 level.
• There is a major bullish trend line forming with support near 0.6650 on the hourly chart of NZD/USD.

AUD/USD Technical Analysis


The Aussie Dollar found support near the 0.6965 zone against the US Dollar. The AUD/USD pair traded as low as 0.6967 on FXOpen before it started a fresh increase.

There was a clear move above the 0.7000 and 0.7020 resistance levels. Besides, there was a break above a couple of bullish patterns near 0.7070 and 0.7130 on the hourly chart of AUD/USD. The pair surged above the 0.7150 level and the 50 hourly simple moving average.

AUD/USD Hourly Chart

It traded as high as 0.7168 and currently consolidating gains. On the downside, an initial support is near the 0.7130 level and the 50 hourly simple moving average.

The next support is near the 23.6% Fib retracement level of the upward move from the 0.6967 swing low to 0.7168 high. If there is a downside break below the 0.7120 support, the pair could extend its decline towards the 0.7070 level.

The 50% Fib retracement level of the upward move from the 0.6967 swing low to 0.7168 high is near the 0.7070 level to provide support. Any more downsides might send the pair toward the 0.7000 level.

On the upside, the pair is facing resistance near the 0.7170 level. The next major resistance is near the 0.7200 level. A close above the 0.7200 level could start a steady increase in the near term. The next major resistance could be 0.7320.

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