Market Update - 31 January 2024

The EUR/USD pair tumbles to near the round-level support of 1.0800 amid weaker German Retail Sales data and the dismal market sentiment. Monthly Retail Sales for December were surprisingly contracted by 1.6% while investors anticipated them expanding by 0.7%. In November, consumer spending was sharply lower by 2.5%. (FXStreet)

USD/JPY sold off earlier in the week but managed to rebound off the 100-day simple moving average – key technical floor. If gains pick up impetus over the coming days, primary resistance is positioned at 148.20, followed by 149.00. Looking higher, the crosshairs will be on the 150.00 handle. (DailyFX)

GBP/USD extends its losses for the second consecutive session on Wednesday, inching lower to near 1.2680 during the Asian session. The risk aversion sentiment is driving Investors towards the US Dollar (USD), which in turn, undermines the GBP/USD pair. US President Joe Biden has communicated that the United States will respond in a tiered approach to a specific situation following the deadly drone attack on US troops near the Jordan-Syria border. (FXStreet)

USD/CHF experiences upward movement for the second consecutive session on Wednesday, edging higher to near 0.8630 during the Asian session. This positive momentum is attributed to anticipation and support ahead of the Federal Reserve's (Fed) interest rate decision later in the day. Market participants seem to have priced in the expectation that the Fed will likely make no adjustments in January's meeting. (FXStreet)

The USD/CAD pair snaps the four-day losing streak during the early Asian session on Wednesday. The recovery of the pair is supported by upbeat US job openings and consumer confidence data, which lift the US dollar (USD). The Federal Reserve (Fed) monetary policy meeting on Wednesday will be in the spotlight, with no change in rate expected. At press time, USD/CAD is trading at 1.3405, gaining 0.04% on the day. (FXStreet)

NZD/USD consolidates after intraday losses, halting its two-day winning streak. The NZD/USD pair trades lower around 0.6120 during the early European session on Wednesday. The US Dollar (USD) is experiencing appreciation against the New Zealand Dollar (NZD), riding on positive momentum ahead of the Federal Reserve's (Fed) interest rate decision later in the day. (FXStreet)

USD/MXN loses ground for the second consecutive day ahead of the US Federal Reserve’s (Fed) interest rate decision. Federal Open Market Committee (FOMC) is widely anticipated to maintain its interest rates at 5.5%. However, the CME’s FedWatch Tool suggests a 43% chance of the Fed implementing the first rate cut in March. The USD/MXN pair inches lower to near 17.13 during the European session on Wednesday. (FXStreet)

Indian Rupee (INR) trades on a stronger note on Wednesday. However, the upside of the pair might be capped as traders prefer to wait on the sidelines ahead of the Federal Reserve's Open Market Committee's (FOMC) interest rate decision. (FXStreet)

The EUR/GBP cross remains on the defensive below the mid-0.8500s during the early European session on Wednesday. Investors await the German Retail Sales and Consumer Price Index (CPI) data on Wednesday for fresh impetus. The cross currently trades around 0.8535, losing 0.05% on the day. (FXStreet)

AUD/JPY moves in a downward direction for the second successive day, trading lower around 97.00 during the Asian session on Wednesday. The Australian Dollar (AUD) faces a challenge after the softer consumer inflation data released earlier in the day. (FXStreet)

On Wednesday, the People’s Bank of China (PBoC) set the USD/CNY central rate for the trading session ahead at 7.1039 as compared to the previous day's fix of 7.1055 and 7.1727 Reuters estimates. (FXStreet)

West Texas Intermediate (WTI) oil price retraces its recent gains despite an escalated situation in the Middle East. The WTI oil price inches lower to near $77.40 per barrel during the Asian session on Wednesday. US President Joe Biden has stated that the United States (US) will respond appropriately to a given situation after an attack on a US post in Jordan, and there is a possibility of a tiered approach which implies a strategy involving different levels or stages of actions. (FXStreet)

Source: FXStreet, DailyFX

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