Forex news from the European trading session - 18 January 2021
Headlines:
- EU reportedly to seek extension to ratify Brexit trade deal
- Reminder: It is a long weekend in the US
- Gold remains in a precarious spot to start the new week
- SNB total sight deposits w.e. 15 January CHF 703.8 bn vs CHF 702.4 bn prior
- Germany reports 7,141 new coronavirus cases in latest update today
Markets:
- JPY leads, AUD, NZD, CAD and GBP lag
- European equities mixed; E-minis flat
- Gold up 0.3% to $1,833.35
- WTI down 0.4% to $52.15
- Bitcoin up 1.2% to $36,965
It was a quiet session overall as the market embraces the similar themes from the end of last week, with another US holiday on the agenda today.
Equities were more tepid in general, trading little changed in Europe while S&P 500 futures are flat after having kept a little lower earlier in the session.
In FX, the dollar maintained a modest advance against the commodity currencies while the yen also kept pace with gains in the greenback - similar to Friday.
EUR/USD is testing key support around 1.2059-64 as price eased from 1.2070 levels, while AUD/USD retreated to a two-week low from 0.7690 to 0.7660. Meanwhile, NZD/USD fell to its lowest levels since 29 December to test the 0.7100 handle.
USD/CAD also pushed higher to a one-week high from 1.2750 to near 1.2800 while the pound slumped amid a rebound in EUR/GBP from key support at 0.8866-67 to 0.8900.
Elsewhere, gold and silver maintained a slight advance after rebounding from a relatively poor start to the day. Gold dropped to $1,804 to open up the week but climbed to a high of $1,840 before settling at $1,830 levels.
Silver fell as much as 2% to $24.05 at the open only to rebound back to $25.15 and is settling just below the $25 level for the time being.
Looking ahead, the market will have little to work with amid the US holiday but the coming days should be more interesting. Yellen's testimony tomorrow will be one to watch before we turn our focus to central banks (BOC, BOJ, ECB) and Biden's inauguration.
