Jan 27th, 2016: Markets Yo-Yo After Strong US Consumer Confidence

• This morning, markets are quiet with a positive bias after US markets made a sharp rebound on the back of strong US consumer confidence yesterday. The US dollar is dropping off as demand for safe havens diminishes.

• This comes after oil prices staged a dramatic rally yesterday, which saw a 6% uplift in prices.

• Another commodity enjoying some buying interest was gold as it climbs to multi month highs.

• Commodity currencies are performing well, with the AUD/USD rallying. The NZD/USD is lagging however, while the USD/CAD dropped heavily as the Loonie received a much-needed oil boost.

Coming up today: 

• Coming up today we have US new home sales at 15.00. This is followed by crude oil inventories at 15.30.
• The main item of note is the FOMC statement at 19.00, with no change expected.
• MPC member Shafik speaks at 19.30.
• Finally we have the RBNZ rate statement at 20.00.

Trade Idea: 

• The USD/JPY looks to be settling into a trading range and with no change expected from the FOMC today, the stalemate could continue.

• A good way to play this is an IN/OUT trade predicting that the USD/JPY will close between 117.00 and 120.00 in 14 days time for a potential return of 103%.

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