FX markets enter the new week with market sentiment firmly risk-on with all-time highs seen in US and Japanese indexes after a blowout earnings report from AI darling Nvidia (NVDA) sent stocks surging.

Ahead this week we have key inflation data out of the US, Australia and Japan along with a RBNZ rate decision which is certainly in play.

The Charts to watch this week

Gold – XAUUSD

Despite the buoyant market sentiment gold gained last week as the USD chopped around without real direction. XAUUSD finding good support at the 2020 USD an ounce level in the second half of the week. This will be a key level to watch coming into Thursdays PCE inflation data out of the US a cooler than expected reading could see the USD decline continue and likely to add to golds bullish recovery.

USDJPY

Japanese inflation data released Thursday is expected to show a sharp drop in January due to a high base last year this could impact the JPY even further, raising doubts around one of the Bank of Japan’s two conditions for policy normalisation and be bullish for USDJPY.

Though above 150 there is the specter of BoJ intervention such as we saw at these levels late in 2022. Currently 150 has become a support level for USDJPY, but upside in this pair seems capped with little upside momentum shown recently, FX traders no doubt cautious at these levels.

AUDNZD

Both AUD and NZD outperformed last week as market optimism and steps by Chinese authorities to support their stock market lifted both the Antipodean currencies. NZD did outperform the Aussie though, with AUDNZD hitting new 9-month and 2024 lows. This week will be a big one for AUDNZD traders, with Aussie CPI expected to rise and a RBNZ rate decision where the bank is expected to hold rates both happening on Wednesday. The market is pricing in a 30% of a hike from the RBNZ, so whichever way they go expect some volatility in NZD crosses over this announcement.

Full Economic calendar of the week ahead at the following link:

Economic Calendar