January Is Not A Corrective Month For Markets

The month of January is not a corrective market month. Do not panic over the corrections this past week. EUR/USD continues to be in its bears area. The only price area that can generate reversion to the area for bulls is 1.0675- 1.0680. Therefore, do not give up short preference in this pair yet, but work hedging at the highs of 1.0675 and 1.0680. USD/CAD continues in its bull area already with the minimum prices to be great long opportunities. The USD/CAD reversal zone is 1.3040. If the market fails to hold at 1.31 this coming week, we will face reversal possibilities to the bears area with lows at 1.27.

USD/JPY continues holding on to bulls area, the key price is 114.80 for strong longs up to around 117 and 118. The USD/JPY reversal price is 113.90, so we recommend to hedge in short below 113.90. The protagonist of the coming week and more intriguing will be the gold or XAU/USD, which is at the most crucial moment. It still cannot hold itself in the 1,200, therefore, could be the beginning of the bulls area at towards the 1,300 or the highs of bears area down to 1,100 again.

Its safer to trade XAU/USD hedging at the highs, that is, with long positions at their highs until market can be at least three sessions of market with open interest at the 1,200. Otherwise, shorts will be preferred. To trade with shorts, it is preferable to identify sell prices below 1,189 do not sell higher than this price. This way you avoid having short positions in consolidation area towards the possible bulls up to 1,300.

As for the international events next week, volume will be focused on the Inauguration ceremony of President-elect Donald Trump on Friday the 20th at 12 EST. The market will be fully active, therefore we consider that there will be operating volume with good entry opportunities. Janet Yellen has two presentations, however, due to the schedule, we do not think it will be relevant to the market. On Wednesday at 12 EST we will have an interesting opportunity with Canadian interest rates. The trading opportunity will depend on the discount of the data during the previous day. Our preference is for long on USD/CAD above 1.31 or above 1.32.

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