US: Large Majority Of US Voters Expect Tariffs To Results In Higher Prices

• Cash S&P 500 has been closed today for MLK Day but e-mini S&P has seen further solid gains on the prospect of no tariffs arriving on day one of the second Trump administration.
• ESH5 closed early at 6055.25 (+21.75 points) for a 0.4% gain to extend Friday’s +1.0%.
• President Trump’s inauguration address had little net impact, with the contract having already pared an earlier climb to 6078.25 following the aforementioned WSJ report plus also a Bloomberg report pointing specifically at a desire to negotiate with China.
• The day’s moves continue the bull cycle extension, with next resistance seen at 6107.50 (Dec 26 high) after which lies 6163.75 (Dec 16 high). To the downside, support is seen at 5961.75 (Jan 16 low).
• Other e-mini indices have seen similar gains today, with both Nasdaq 100 and Down Jones +0.4%, although the Russell 2000 outperforms (+1.2%) having heavily underperformed Friday.
• Improved risk sentiment has been reflected more broadly as well, including in Europe the SX5E index marking a fresh twenty-year high.

• RES 4: 1.2607 High Dec 30
• RES 3: 1.2554 50-day EMA     
• RES 2: 1.2376 20-day EMA 
• RES 1: 1.2326 High Jan 20 
• PRICE: 1.2301 @ 16:42 GMT Jan 20
• SUP 1: 1.2100 Low Jan 10 and the bear trigger 
• SUP 2: 1.2087 0.764 proj of the Sep 26 - Nov 22 - Dec 6 price swing
• SUP 3: 1.2037 Low Oct 4 ‘23 and a key support 
• SUP 4: 1.2000 Psychological round number      

The trend direction in GBPUSD remains down and short-term gains are considered corrective - for now. Initial firm resistance to watch is 1.2398, the 20-day EMA. A clear breach of the average would highlight a stronger corrective phase and signal scope for an extension, possibly towards the 50-day EMA, at 1.2554. The bear trigger has been defined at 1.2100, the Jan 10 low. Clearance of this support would resume the downtrend.       

• There was a substantial weakening of the US dollar on Monday, as reports from the Wall Street Journal detailed that President Trump was planning to issue a broad memorandum Monday that directs federal agencies to study trade policies, but stopped short of imposing new tariffs on his first day in office. Trump officials later corroborated the reports.
• The greenback was immediately lower on the headlines, and despite being off its worst levels, the USD index remains around 1% lower on the session.
• There has been broad based strength across G10 currencies against the dollar, however, EUR and NZD are outperforming at the margin. EURUSD rose to a session high of 1.0430 on the report as post-election positioning is taken into account and unwound. Initial resistance levels at 1.0338 and 1.0354 have been breached and the pair traded within 7 pips of 1.0437 resistance, the Jan 6 high.
• AUDUSD has risen above initial firm resistance in tandem, breaching the 20-day EMA and recording a high of 0.6287. The 50-day EMA is at 0.6335 and should be the next target barring any reversal of the current tariff rhetoric in place.
• With the strong positive price action for major equity indices, USDJPY is only 0.3% lower on the session at 155.85 as we approach the APAC crossover. Positive risk sentiment is boosting cross/JPY here and may be in focus as the BOJ decision approaches this week.
• Uk labour market data and Canadian CPI highlight the economic calendar on Tuesday.