Forex Signals Overview January 28: Potential Rebound in Cryptos and Equities?

Yesterday marked a tumultuous day for the markets, with the largest single-day wipeout of market capital in Nvidia’s history coinciding with a notable downturn in the cryptocurrency sector. Despite these declines, XRP staged a remarkable comeback late in the day, managing to recover all its losses. This resilience was mirrored in the stock market, which also saw a significant recovery, leaving investors hopeful for a bullish rebound as they entered a new day.

Market Reactions to Tariff Announcements

The week commenced on a shaky note as financial markets absorbed the implications of tariff tariffs imposed by former President Donald Trump on Colombia. This announcement, perceived as a potential precursor to broader tariffs affecting various nations, triggered investor concerns, contributing to the pervasive sense of uncertainty. Compounding these jitters was a disappointing set of economic indicators from China, painting a grim picture of a decelerating services sector and further intensifying global market sell-offs.

Among the most eye-catching market movements was Nvidia’s stock, which saw a staggering 17% decline. This drop not only represented the largest market cap reduction in a single day ever recorded but was propelled by news surrounding DeepSeek’s introduction of a more cost-effective and efficient AI model, which threatened Nvidia’s long-standing dominance in the artificial intelligence sector. The ensuing market-wide reassessment regarding the economics of AI led to a widespread impact across various industries, as investors recalibrated their expectations.

Initially, this turmoil prompted a flight to safe-haven assets, allowing currencies like the Japanese yen and Swiss franc to strengthen while Treasury yields dipped by 10 basis points. However, as the trading day progressed, some sectors gradually improved, particularly those linked to tangible economic outputs. An emerging optimism surrounding the accessibility of AI technologies sparked a recovery in currencies related to commodities, allowing the Dow to bounce back and close the day in positive territory, despite its earlier losses.

On the foreign exchange front, the USD/JPY pair regained 1 cent following a 2.5-cent drop, indicative of returning optimism. The cryptocurrency space similarly appeared to recover from its earlier troubles, driven down by negative equity sentiment. Bitcoin, for instance, faced a brief decline below the $100,000 threshold, with a significant $7,000 drop, but quickly reversed its course to uphold this crucial support level. In an impressive feat, Ripple, which initially plummeted 20% amid the chaos, managed to erase its losses and settle above the $3 mark.

Looking Ahead: Today’s Market Outlook

As we progress into the new day, the market’s focus shifts toward specific economics and indicators that could set the tone for trading activities. Notably, the Nikkei was among the biggest losers in the previous session, folding within an ascending channel. However, the late-day market recovery hints at a more stable outlook, creating an optimistic environment for both Bitcoin and Ripple to maintain upward momentum.

The anticipated release of the US consumer confidence index is a focal point for traders, expected to rise from last month’s figure of 104.7 to 106.0. This represents a slight improvement; however, it’s essential to consider the context surrounding these figures. December saw a sizeable decline, falling sharply from November’s robust reading of 112.8. According to observations from the Conference Board, the downturn in consumer confidence cannot be overlooked. Specifically, the expectations component contributed significantly to December’s plunge, compounded by deteriorating consumer assessments of both current and future conditions.

Despite a consistent improvement in consumer perceptions regarding the job market, bolstered by positive labor statistics, concerns remain about the broader business environment. This sentiment suggests a cautiously optimistic mood as consumers head into the new year, with labor market solidity providing a measure of hope amidst ongoing uncertainties.

Capital Markets: Volatility and Trading Signals

Last week witnessed a notable pivot against the US dollar, coupled with robust buying activity in risk-oriented assets such as commodity-linked currencies and stocks. During this period, traders opened a total of 26 trading signals while predominantly taking long positions on stocks and gold. The result was a commendable performance, culminating in 19 successful forex signals against seven losses.

Gold prices exhibited remarkable resilience, particularly throughout the previous week, following a sturdy rebound towards the beginning of the month, where it established strong support around the $2,600 mark. Although prices dipped by $100 in December amidst an unsuccessful attempt to break past the critical resistance zone located at $2,725, the market ultimately found stability near the 20-week simple moving average (SMA). A doji candlestick on the charts indicated a potential bullish reversal, confirmed by three consecutive weekly bullish closes that saw gold push past the $2,700 barrier at the week’s start.

By examining the H4 chart, it’s evident that moving averages are now acting as critical support levels. A minor pullback observed yesterday morning triggered a surge in buying interest once more, indicated by activity above the 20 SMA, ultimately offering traders a profitable opportunity for long positions.

Foreign Exchange Trends: EUR/USD Movement

The EUR/USD currency pair has faced a consistent downtrend since late September, shedding nearly 10 cents from its previous trading levels exceeding 1.11. However, Monday brought with it a robust bullish rally, primarily due to a weakening US dollar. During the US trading session, the pair briefly approached the 1.2456 mark on its daily chart, although sustaining gains above the 50-day SMA proved to be a challenge.

Following remarks made by President Trump at the World Economic Forum in Davos, renewed buying interest surged, pushing prices back over the moving average. This shift suggests potential upward momentum, contrasting with prior struggles.

Cryptocurrency Spotlight: Bitcoin and Ethereum

In recent sessions, Bitcoin has experienced considerable price volatility, commencing the week near $108,000 before a 25 basis point rate cut triggered a sharp decline into the low $90,000s, temporarily dipping below the crucial $100,000 psychological level. Despite a recovery attempt reaching $95,000 that faced resistance at the 20-day SMA, the situation quickly reversed.

Nevertheless, bullish sentiment caused Bitcoin prices to jump 10% earlier last week, temporarily hitting just under $110,000 before stabilizing above the $100,000 support. Ongoing bullish commentary, particularly from Republican Senator Lummis, who hinted at forthcoming advancements in the crypto landscape, has played a pivotal role in sustaining Bitcoin’s positive momentum.

Ethereum has also showcased significant fluctuations lately. Initially finding support near the 50-day SMA, subsequent selling pressure pushed Ethereum prices below $3,500 and eventually under $3,200. In the midst of the downward dynamic experienced during the overall market decline on Monday, Ethereum briefly dropped below $3,000. However, fresh buying activity soon spurred a recovery, allowing Ethereum to rally back and surpass its earlier highs, though it has struggled to maintain the $4,000 threshold, ultimately retreating below the $3,000 mark yet again. Nevertheless, persistent strength across the broader cryptocurrency market over the last fortnight has reinvigorated Ethereum’s position, allowing it to reclaim territory above $3,500, with the 20-day SMA continuing to act as a key resistance point.

Conclusion

The past week has seen a fluctuating financial landscape, driven by tariff announcements, disappointing economic data, and profound market shifts within the tech and cryptocurrency sectors. While Nvidia faced unprecedented loss, other assets rallied, highlighting the varied dynamics within the market. As investors look ahead toward economic indicators and market responses, the continuing resilience of cryptocurrencies and the volatility of traditional markets suggest that the environment will remain dynamic. Keeping an eye on consumer confidence and risk appetite will serve as crucial indicators moving forward, as traders position themselves amidst both challenges and opportunities.

FAQs

What caused Nvidia’s stock to drop significantly?
Nvidia’s stock fell primarily due to the announcement regarding DeepSeek’s development of a more affordable AI model, leading to concerns over the company’s dominance in the AI market.

How did cryptocurrency markets respond to traditional market fluctuations?
Following initial declines due to negative sentiment in equities, cryptocurrencies like Bitcoin and XRP managed to rebound significantly, showcasing their resilience.

What is the outlook for consumer confidence in the upcoming report?
The anticipated rise in consumer confidence indicates a potential recovery from previous declines, although uncertainty surrounding broader business conditions persists.

How has the EUR/USD pair performed recently?
The EUR/USD currency pair has faced a downtrend but showed signs of recovery, fueled by a weakening US dollar and renewed buying interest.

What are the current trends in Bitcoin and Ethereum prices?
Bitcoin has shown significant price fluctuations but remains above critical support levels, while Ethereum is experiencing resistance but has regained some stability amid broader market strength.


References

  1. Conference Board. (2025). Consumer Confidence Survey.
  2. Market Analysis Reports. (2025). Weekly Economic Indicators.
  3. Forex Trading Signals. (2025). Trading Strategies and Market Insights.
  4. Financial Times. (2025). Daily Market Review.