British Pound Forecast- Levels for CAD / JPY, USD / CAD, GBP/JPY, GBP/USD, EUR/GBP

 - The US dollar continued to lose points after the CPI figure surged last night.

 - Falling Covid-19 case data and recovery in oil prices could make the Canadian Dollar stronger.

 - CAD / JPY is ready to extend its recent gain while USD / CAD is aiming a push to retest its yearly lows.

- The post-Brexit UK economy is proving resilient, particularly relative to the rest of Europe and most of the developed world, when viewed through the lens of vaccination rates.

- Both GBP/JPY and GBP/USD rates are in bullish breakout territory, while EUR/GBP rates are in bearish breakout territory.

- Retail trader positioning suggests different biases among the major GBP-crosses.

COMEX TRADING SIGNALS

TODAY'S US DOLLAR OUTLOOK

US DOLLAR OUTLOOK: USD/JPY IN FOCUS HEADED INTO CONSUMER SENTIMENT REPORT RELEASE

• US Dollar traded broadly mixed across major currency pairs during Thursday’s session
• DXY Index continues to gravitate around its 50-day moving average as selling pauses
• USD/JPY price volatility could get a jolt from potentially high-impact sentiment data

The US Dollar lacked direction and traded broadly mixed on Thursday. USD price action strengthened modestly against the Pound and Yen but weakened against the Australian Dollar and Euro. On balance, the DXY Index finished roughly flat as US Dollar bears and bulls continue to battle for direction near the 50-day simple moving average.

This has given pause to the latest stretch of US Dollar selling pressure, which corresponded with a breakdown of the relative strength index and invalidation of the short-term bullish trend formed from the 06 January and 26 January lows. Failing to maintain altitude around the 50-day simple moving average could see a resumption of US Dollar weakness that steers the DXY Index down to its bottom Bollinger Band. A last ditch effort by US Dollar bulls to rekindle recent rebound efforts could see the 91.00-price level come into play as a potential topside objective.

US Dollar overnight implied volatility readings have cooled off quite a bit. USD/JPY has one of the lowest implied volatility readings at 4.0%, which ranks in the bottom 10th percentile of readings taken over the last 12-months and is also below its 20-day average of 4.8%. This brings to focus the monthly consumer sentiment report on deck for release tomorrow, 12 February at 15:00 GMT as a potential catalyst for volatility. That said, USD/JPY price action could ‘lead the way’ so to speak in terms of where the broader US Dollar heads next.

                              Comex Trading Signals

XAU/USD Runs into Resistance, Will it Reverse Lower?

 GOLD PRICE FORECAST: XAU/USD RUNS INTO RESISTANCE, WILL IT REVERSE LOWER?

Gold volatility has been elevated in February with the precious metal bouncing between technical levels in quick succession. While losses suffered earlier in the month have largely been reclaimed, XAU/USD remains near the midpoint of the descending channel it has etched out since August. Despite the recent recovery, the yellow metal has encountered resistance overhead and appears vulnerable to a reversal lower.

While the fundamental argument for gold – one that was vital to the metal’s climb from March to August – remains intact, the gradual decline in price is undeniable. As a result, longer-term price trends have since become negative, evidenced by a “death cross” formation on the daily chart in early January 2021 and a break beneath the 200 exponential moving average. As it stands, XAU/USD trades beneath all three of these longer-term averages and there is little to suggest gold will suddenly reverse higher and snap the downtrend.

Resistance is also evident on the 4-hour chart as gold negotiates the $1850 area which has proved influential in the past. The area also coincides with the 200EMA. A potential MACD crossover above the 0 levels and beneath the 200EMA might hint gold could reverse lower in the coming days. That said, a bullish continuation is also possible and subsequent resistance might lie at the Fibonacci levels near $1883 and $1920.

Shariah Stock Recommendation

Chinese New Year Making Lower Liquidity

• Dow Jones index edged higher while the Nasdaq Composite retreated from record highs
• Weaker-than-expected US inflation data led the US Dollar lower, buoying commodity prices
• Asia-Pacific markets are heading into quieter trading sessions due to the Chinese New Year Holiday
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INFLATION, US DOLLAR, PLATINUM, CNY HOLIDAY, ASIA-PACIFIC STOCKS OUTLOOK:

Wall Street stocks hovered near record highs as Democrats moved closer to pass the US$ 1.9 trillion stimulus package without Republican support. Fed Chair Jerome Powell addressed the need for accommodative monetary policy in a speech last night, underscoring that the US job market is far from full recovery. His dovish stance and weaker inflation data led the US Dollar lower. The Dow Jones Industrial Average index finished 0.20% higher on reflation hopes, while the Nasdaq Composite retreated by 0.25%.

Asia-Pacific equities are probably heading into a quieter trading day as mainland bourses are closed for the Chinese New Year holiday and the Hong Kong Stock Exchange is trading for half of a typical day. Futures across Japan, Hong Kong, Singapore, India are pointing to a lower start, whereas those in Australia, South Korea, Malaysia, Thailand are edging higher.

Australia’s ASX 200 index opened slightly lower and quickly bounced back. Materials (+1.47%), communication services (+1.04%) and energy (+0.80%) are leading, whereas information technology (-1.40%) and consumer discretionary (-0.88%) sectors are lagging.

The US Dollar Index (DXY) declined for the third day after the release of weaker-than-expected US inflation data. US core CPI, which excludes volatile food and fuel costs, came in at 1.4% YoY in January. This is slightly below the baseline forecast of 1.5% and also marked a decline from December’s reading of 1.6%. The headline CPI reading advanced 0.3% MoM due to higher fuel prices, in line with expectations. But, the year-on-year print still fell short of market expectations. Tepid inflation rates reflected the lingering impact of the pandemic and may refrain the Federal Reserve from considering tapering any time soon.

Weaker inflation readings also led the US Treasury yield curve to flatten slightly, with the 5-, 10- and 20-year yields declining by 2.3bps, 3.3bps, and 3.5bps to 0.451%, 1.123%, and 1.733% respectively. Lower yields, alongside a weaker US Dollar, may continue to support commodity prices. Platinum, a precious metal that can be used as a catalyst in fuel cells for electric vehicles, soared to a six-year high of US$ 1,251.

Indices Trading Signals