US: Democrats Open Up Strong Lead In Voter Enthusiasm

• RES 4: 0.8813 76.4% retracement of the Nov 14 - Jan 6 bear leg   
• RES 3: 0.8797 High Dec 17   
• RES 2: 0.8781 61.8% retracement of the Nov 14 - Jan 6 bear leg
• RES 1: 0.8715/46 50-day EMA / High Dec 31 & Jan 21
• PRICE: 0.8691 @ 17:55 GMT Jan 27
• SUP 1: 0.8644 Low Jan 6 and the bear trigger
• SUP 2: 0.8633 Low Sep 15
• SUP 3: 0.8620 38.2% retracement of the Dec ‘24 - Nov ‘25 bull cycle 
• SUP 4: 0.8597 Low Aug 14

Last Friday’s sell-off in EURGBP signals the potential end of a corrective recovery between Jan 6 - 21. Moving average studies are in a bear-mode set-up and this continues to suggest that recent short-term have been  corrective. Key support and the bear trigger lies at 0.8644, the Jan 6 low. A break of this level would confirm a resumption of the downtrend. Key short-term resistance is 0.8746, the Jan 21 high.    

We've published our preview of the upcoming BOC decision - Download Full Report Here

• The Bank of Canada is overwhelmingly expected by both markets and analysts to maintain its overnight rate at 2.25% at the January meeting (announcement on Jan 28).
• This would be a 2nd consecutive pause as part of what is anticipated to be a flat rate path through 2026. The biggest question is, in which direction will the next move be?
• The account of the deliberations at the December meeting highlighted that Governing Council debated "whether it was more likely that their next move would be to raise or lower the policy interest rate."
• It remains more likely than not that the next move will be a hike, with a downside shock required for cutting again.
• The January Monetary Policy Report is likely to show an upgrade to GDP growth projections for 2025 as a whole with a potential slight upgrade to 2026 at a still-soft level. CPI forecasts also look set to be raised slightly due to higher-than-expected headline readings in the latter months of the year, but as we explain, the more important underlying metrics have been subdued.

The questions that we have selected for Instant Answers for the January FOMC statement (scheduled to be released at 1400ET Wednesday) are:

• Fed funds rate range maximum
• Number of dissenters on rate move
• Interest rate paid on reserve balances
• Standing repo operations rate