The US dollar is higher after Pres. Trump and his new Treasury Secretary pumped the tariff idea further saying that it will place tariffs on computer chips and producers of pharmaceuticals saying that if they want to stop placing tariffs, companies need to build points in the US. The Treasury Secretary pushed for a gradual 2.5% universal US tariff with the tariff growing each month by the same amount.
The moves higher in the US dollar erased the declines seen in some of the major currency pairs yesterday.
Above, find the kickstart video which looks at the three major currency pairs from a technical perspective: the EURUSD, USDJPY and GBPUSD.
EURUSD: On Friday, the EURUSD moved above a key swing area between 1.0448 and 1.0461 (bullish break), and on a dip in the Asian session yesterday tested that area before moving sharply to the upside.
The high price from yesterday stalled against another swing area between 1.05325 and 1.0543. In trading today, the comments from Pres. Trump on tariffs sent the price back below the 1.0448 – 1.0461 swing area and the rising 100-hour moving average at 1.0448 (shifted bias back to the downside). That area is now close risk for sellers in the EURUSD. The next key targets on the downside include the 50% (which is also the 50% on the daily chart) and the rising 200-hour MA. Those levels, come in at 1.0404 and 1.03947 respectively.
USDJPY: The USDJPY moved up to the high of a swing area in the Asian session at 156.219 and found willing sellers. The subsequent tumble lower saw the price move down to the 50% midpoint of the move up from the December low at 153.736. In the process, the pair fell below a swing area between 154.77 and 154.967.
Today, the price is back above that swing are but is finding sellers near the the 100/200 hour MAs converged at 155.73. Those levels are close resistance. Stay below and there is a battle between 154.77 and 154.94 and 155.73.
GBPUSD: The GBPUSD moved back below a swing area between 1.24739 and 1.24999, and then the 200 bar moving average on the 4-hour chart and 50% retracement of the move down from the December high at 1.2453 to 1.2458. That area is now close risk for traders today. Stay below is more bearish.
On the downside, the pair is testing a upward sloping trendline. Below that is the 100-hour moving average of 1.2403. Get below those levels increases the bearish bias for the pair.
US stocks are mixed after the tumble lower yesterday saw the S&P fall -1.46% and the Nasdaq fall -3.07%. The Dow did rise yesterday helped by J&J, Salesforxe, Travelers, P&G and Apple.
The snapshot of the major indices as implied by the futures shows:
- Dow INdustrial Average -22.58 points
- S&P index up 7.22 points
- Nasdaq index up 38.22 points
On the early earnings calendar the results are mixed:
- Boeing Co (BA) Q4 2024: EPS -$5.90 (MISS; exp. -$2.65), Revenue $15.24B (MISS; exp. $16.21B).Shares are up 0.65%
- General Motors Co (GM) Q4 2024: EPS $1.92 (BEAT; exp. $1.89), Revenue $47.7B (BEAT; exp. $43.93B). Sharea are unchanged
- Lockheed Martin Corp (LMT) Q4 2024: EPS $2.22 (but this may not compare to exp. $6.64), Revenue $18.62B (MISS; exp. $18.91B). Shares are down -3.1%.
The earnings calendar this week is moving closer to some of the Magnificent 7 including Meta, Microsoft and Tesla on Wednesday, and Apple on Thursday. Below is the schedule of some of the major large-cap earnings announcements.
- Tuesday, January 28: Starbucks, SAP, Stryker
- Wednesday, January 29: Progressive, T-Mobile, ADP, General Dynamics, Tesla, Meta, Microsoft, IBM, Lam Research, ServiceNow
- Thursday, January 30: UPS, Mastercard, Dow, Nokia, Southwest, Caterpillar, Comcast, Apple, Intel, Visa
- Friday, January 31: ExxonMobil, Chevron, Colgate-Palmolive, Phillips 66
Looking at the US debt market, yields are higher after the fall yesterday saw the 10-year yield fall – 8.3 basis points:
- 2 year yields 4.217%, +2.2 basis points
- 5 year yield 4.362%, +3.2 basis points
- 10 year yield 4.562%, +3.5 basis points
- 30 year yield 4.801%, +3.0 basis points