📈 Trump’s Tax Cut Plan Pauses Dollar Weakness, Market Awaits NVIDIA Earnings

📈 Trump’s Tax Cut Plan Pauses Dollar Weakness, Market Awaits NVIDIA Earnings

Today’s Market Overview

• USD/JPY: The pair is currently hovering around the 150.00 level. The passage of Trump’s tax cut bill in the House has temporarily boosted inflation expectations, leading to short-term dollar buying. However, the broader dollar downtrend remains intact. The 150.00 level, with its large options interest, is expected to act as a critical point of resistance.
• JPY: The Bank of Japan (BOJ) released new indicators to capture the “underlying inflation rate.” The weighted average rose to 1.4% (from the previous 1.0%), and the trimmed mean reached 2.2% (from 1.9%). However, the Tokyo market showed a muted reaction, suggesting the data lacks strength as a yen-buying catalyst. The focus now shifts to how the European and American markets will react.
• EUR: The German GfK Consumer Confidence Survey and the French Consumer Confidence Index are scheduled for release. However, these data points are unlikely to trigger significant market movements. The euro remains susceptible to broader market trends, particularly influenced by the Ukraine situation and Trump’s tariff policies.

Key Points to Watch Today

1. U.S. Economic Data:
   • New Home Sales (January): Market expectations are for 680,000 units (previously 698,000). Given last week’s weak economic indicators, the market might react strongly to any negative surprises. If the data misses expectations, further dollar selling could ensue.
2. Comments from U.S. Fed Officials:
   • Barkin (Richmond Fed) and Bostic (Atlanta Fed) are set to speak. The market will focus on their views on inflation and any hints towards holding interest rates steady.
3. NVIDIA Earnings:
   • The U.S. equity market has seen a downtrend in semiconductor stocks. With the Trump administration tightening semiconductor regulations against China, NVIDIA’s earnings could influence risk-on/risk-off sentiment, potentially impacting the forex market.
4. G20 Finance Ministers and Central Bank Governors Meeting:
   • BOJ Governor Ueda will participate. Any comments on additional rate hikes in Japan or insights into the U.S.-China trade issues could influence the yen.

Trading Strategy

💡 USD/JPY: Watch the Battle at 150.00

• Scenario 1: A Break Above 150.00 Signals a Short-Term Buy Opportunity
  • Target: 150.50 to 150.80
  • Stop Loss: 149.80
• Scenario 2: Failure to Break Above 150.00 Opens Up Short Opportunities
  • Target: 149.20 to 149.00
  • Stop Loss: 150.30

💡 EUR/JPY: Limited Upside Expected

• Maintain a Bearish Outlook
  • Target: 156.50 to 156.00
  • Stop Loss: 158.00

💡 BTC/USD: Cautious Stance

• Hold Off on Short-Term Trades
  • After breaking below the range, BTC/USD shows no signs of a rebound. Wait for clear recovery signals before considering new positions.

Summary

• Key Events Today:
  • 22:00 (JST) U.S. New Home Sales (January)
  • 23:00 (JST) NVIDIA and Salesforce earnings announcements
  • 25:00 (JST) G20 Finance Ministers and Central Bank Governors Meeting (Focus on BOJ Governor Ueda’s remarks)
• Focus Currency Pairs:
  • USD/JPY: Watch the 150.00 level closely, considering the large options interest and potential for significant moves.
  • EUR/JPY: Aim for short positions, but stay alert for headlines related to Ukraine and Trump’s tariff policies.
• Risk Management:
  • With U.S. economic data and NVIDIA earnings potentially driving market volatility, keep position sizes small and set clear stop-loss levels.

👀 Stay focused on the battle at 150.00 for USD/JPY and the impact of NVIDIA’s earnings. Approach today’s trading with caution and discipline!🔥