BoJ Leaves Policy Unchanged – UK Jobs Data & Goldman Sachs in Focus

Goldman Sachs  => Rises from monthly low

USD/JPY   => Rises for a third straight day

EUR/GBP  => Moves away from 2022 low

Goldman Sachs reports Q4 earnings

Top US investment bank, Goldman Sachs, is due to report Q4 earnings today before the opening bell. Expectations are for EPS of $11.89 per share, a 2% decline for the $12.08 achieved in Q4 2020. Revenue is also expected to decline around 1% from a year earlier to $11.65 billion. Goldman Sachs topped the tables for both IPOs and M&A activity, two very lucrative areas of investment banking. Add into the equation strong equity markets and solid fixed income and FX revenue and expectations are running high. In light of the strong macroeconomic backdrop, the outlook for the bank is also expected to be upbeat.

goldman sachs

What’s next for Goldman Sachs’s share price?

The Goldman Sachs share price gapped lower and closed down 2.5% on Friday after disappointing earnings from JP Morgan and Citigroup. After falling to a low of $375 the price picked up to close just below the 200 sma at $381. This is now set to be the big test for Goldman Sachs on the open on Tuesday. Failure to push above the 200 sma could see the price test support at $375 Friday’s low ahead of $366 the December low. Buyers will look for a move over the 50 sma a $392 to negate the near-term downtrend. A move above $404 last week’s high could see the bias turn bullish. 

USD/JPY falls as BoJ keeps rates on hold

USD/JPY is pushing higher on US dollar strength and after the BoJ made no changes to its monetary policy. The central bank kept its negative interest rate, asset purchases, and yield curve control policies unchanged. However, the BoJ did alter its view on inflation risk for the first time in over 6 years, driving the yen lower. Japan, which has experienced deflation for years is now facing rising food and energy prices. The BoJ upwardly revised its inflation outlook from 0.9% to 1.1%adding that price risk was generally balanced rather than skewed to the downside. Inflation remains well below the BoJ’s 2% target for a rate hike. 

EUR/GBP looks to UK jobs data

The EUR/GBP drifted higher in the previous session in a subdued start to the week. The pound slipped as traders weighed up uncertainty over Prime Minister Boris Johnson’s future and an improving COVID outlook. Both the UK and the eurozone economic calendars were quiet yesterday. Things are expected to pick up today with the release of German ZEW sentiment data and UK labour market data. The number of people claiming unemployment benefits declined by 49.8k in November whilst unemployment fell to a 15-month low of 4.2%. Expectations are for unemployment to remain steady at a 15-month low of 4.2%. A strong jobs market would be supportive of a more hawkish BoE in the coming months and could lift the pound.

Support can be found at 0.8340 (weekly low) and 1.3560 (100 sma).           

Resistance can be seen at 0.8420 (2022 high) and 0.8323 (2022 low).


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