The Tiger Forex Report – Week of 1/29 – 2/02/2024

The DXY is settling into a sideways trade in front of the January FED meeting this week. Wait for a move. It could be a dead trade until Thursday.

Crude Oil Bulls broke out to the upside and are on a mission for the critical resistance zone.

30yr T-Bond Yields are creeping higher as we get closer to the first FED meeting of 2024. A dip into the critical support band is on the agenda early this week.

EURUSD Weekly Outlook:

Key off the daily directional pivot level for the markets bias this week. Below here the EURUSD should start to lean on the critical support band. Unless there is a big retraction in Yields it is not likely that the market will get below this area until after the FED meeting. Use caution and have rational expectations this week. If there is a close under 1.0713 an update will be made to evaluate if the trend is turning.

Above 1.0834 the EURUSD will have a fight all the way up to the critical resistance band. This is a key area for the Bulls. If the FED goes Dovish the Bulls may have a chance to cross this barrier. The upside target #1 becomes the first objective for the longer-term Bull trend. Clarity will come back after the FED meeting. It is the first meeting for the year, and the next one is not until March. It is a waiting game. Be patient.

GBPUSD Weekly Outlook:

The coil is winding up and getting ready to spring. Wait for it is the call. More sideways action into the FED meeting is expected. Do not try and force a trade. If the Bulls catch a bid the upside target #1 will be their goal. 1.3114 is the long-term Bullish target if the FED starts to lean towards the Dovish side.

Only a failure from 1.2594 confirms weakness and new move lows. Trading under here will have the Bears salivating as they slam the currency towards the downside target band. This should be it to the downside for the market. Only a strong Hawkish tone by the FED would justify any trading under this area.

USDCHF Weekly Outlook:

This will probably not be a hang onto your hat’s kind of week for the USDCHF. The best advice is to wait for a confirmed signal. Below the directional pivot level, the Bears will try and make a play for the downside correction zone. The overall trend is Bearish, and once the FED goes Dovish the downside objectives will become extreme.

Sustained trading above 0.8666, and the Bulls will have a fight on their hands. The upside correction zone is the extreme for any Bullish action this week. However, if the FED hints at a return to hawkishness the extended upside target becomes a good longer-term play. This is a very unlikely scenario though unless the tone changes from the FED.

USDJPY Weekly Outlook:

The USDJPY could be quite the jittery trade this week. It would be good advice to hold off until after the FED meeting. A Bullish move over the next few days will have a very rough time with the upside correction zone. In this area the critical BOJ threshold level should be the cap for a higher trading market. Only a Hawkish tone by the FED would justify trading back at these higher levels. Should this occur, it could really shake up the currency markets.

All the way down to the directional pivot level the USDJPY Bears will be trying to reset the long-term trend to the downside. The downside correction zone will be the key area to watch out for. All trading below here should have this FX pair in the gutter, and start to put large long-term downside targets on the menu moving into the weeks ahead.

AUDUSD Weekly Outlook:

Aussie traders may have their patience put to the test this week until after the FED meeting. It would be wise to wait for a signal. There is likely to be very little follow through until after Wednesday. If the Bears can press support, it will be tough all the way to the critical correction support level. If the longer-term trend is to resume there will be little action under here.

Up to the critical resistance band the Bulls will have a fight on their hands. If the FED turns Dovish then the 0.6739 level becomes a viable target. Only a close above here confirms the markets resolve to go higher and resume the longer-term Bull trend. The upside target #1 and #2 will then be good areas to shoot for as the AUDUSD presses newer monthly highs.

NZDUSD Weekly Outlook:

The trend is your friend, and another test of support is the call for the NZDUSD into the downside correction zone. This area should keep the market from falling further. With the FED meeting this week there is little chance of any extended move in either direction. Only a close below 0.6000 would change this outlook. If this occurs there will be an update.

Sustained trading above 0.6072 puts this market in a holding pattern. If the Bulls can catch some steam the NZDUSD may be able to challenge the critical resistance band. There is little chance of the market getting above this area unless Yields pull back strongly. If there is a Dovish tone this week from the FED then the Bulls will have the upside target level as a very reachable trend objective as we head into February.

USDCAD Weekly Outlook:

It will likely be a rough trade for the USDCAD for the first part of the week until the FED meeting is over. Another run at resistance is expected. A breach of 1.3537 should touch off some Stops and press new move highs up to the 1.3624 level. This is all that is likely since no follow through is expected. Only a close above 1.3624 would confirm the Bulls intentions to continue higher.

Below 1.3537 the market will be in a rough trade down to the critical support band. This area should hold solid if the trend is to remain neutral. A failure from 1.3313 would be a negative indication that the USDCAD is back on the Bear path. Trading back in this area is likely to build extending the bearish objective to the downside target #1. The first FED week of the year could be a very trying one. Make sure you stay aware of that possibility. With any luck there will be good transparency with the FED moving forward into 2024.