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DAILY TECHNICAL ANALYSIS FOR JANUARY 31, 2023

EUR/USD

Current level – 1.0852

The currency pair continues to be locked in the range 1.0840 – 1.0914 that started in the beginning of the previous week and, in the early hours of today’s trading session, the bears made another unsuccessful attempt to breach the lower border of the range, leading to an assumption that the consolidation phase is still intact. Therefore, the expectations for today’s session are for a test of the critical resistance at 1.0900, where a confirmed breach of this level may suggest a resumption of the uptrend and an opportunity for the buyers to target the psychological level at 1.1000. In an alternative scenario, if the currency rate falls below 1.0840, it is highly possible for a price correction to take place and this would easily lead to an impulsive downward movement towards the support at 1.0784. Perhaps, the extended consolidation phase is as a result of the investors’ uncertainty on whether the efforts of the U.S. Federal Reserve to fight inflation with its aggressive interest hikes will deliver the necessary result. The data regarding the ADP Nonfarm Employment Change for the U.S. which is expected to be announced on Wednesday; 13:15 GMT, followed by the Fed’s interest rate decision at 19:00 GMT, will be of critical importance for the future market direction. In addition, more cautious investors would expect the ECB interest rate decision that will be released this Thursday at 13:15 GMT before taking their positions. Today, the economic data regarding the consumer confidence for the U.S. that will be published at 14:45 GMT and the preliminary CPI data for Germany at 13:00 GMT could cause higher than usual volatility.

USD/JPY

Current level – 130.16

The bulls still cannot overcome the key resistance at 130.70 and gain enough momentum to lead the pair towards the next resistance level at 131.60. The pair continues its consolidation in the range 129.00 – 130.70, as the market is expecting the Fed interest rate decision. A slight downward movement and a test of the support at 129.70 is a highly likely scenario for today’s trading session, where a breach of this level could easily pave the way for the pair towards the next support at 129.00. If the bulls manage to take control over the market and violate the key resistance at 130.70, their next target would be the resistance at 131.60.

GBP/USD

Current level – 1.2356

At the time of writing this analysis, the pair is headed towards a test of the support at 1.2333 and it is highly possible for the downward movement to continue towards the next support at 1.2290, considering the many unsuccessful attempts of the buyers to breach the resistance at 1.2429. The forecast for today’s trading session is for the pair to test the support at 1.2290, followed by 1.2245.

Midday update for Gold 

Gold price succeeded to touch our waited target at 1908.40 and attempts to break it, to hint heading to achieve more expected decline in the upcoming sessions, paving the way to achieve additional negative targets that reach 1871.00, to keep the bearish bias dominant for the rest of the day, taking into consideration that failing to confirm breaking 1908.40 will lead the price to attempt to build new bullish wave and resume the main bullish trend again.

The expected trading range for today is between 1895.00 support and 1920.00 resistance.

The expected trend for today: Bearish

Source: Technical analysis

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