Weekly Forex Forecast: 29 December 2014 to 2nd January 2015

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Forex Forecast
Forex Forecast for 29 December 2014 to 2nd January 2015

The US Dollar ended the week on the strong note after the revised third quarter GDP beat estimates rising to 5%, well above expectations. As volume and liquidity were thin on account of the Christmas holidays, trading was mostly quiet based off the broader themes. With the markets entering the final week of the year, 2014, volumes are expected to be thin, despite a few economic releases scheduled during the week.

Fundamentals for the Week 29 Dec – 02 Jan

Date Event Estimates
30 December UK Nationwide HPI m/m 0.3%
Spanish CPI y/y -0.7%
Eurozone private loans y/y -0.9%
US S&P/CS Composite HPI y/y 4.4%
US, CB Consumer confidence 94.6
31 December Australia private sector credit m/m 0.5%
China HSBC Final manufacturing PMI 49.5
US Weekly unemployment claims 287k
Chicago PMI 60.2
US Pending home sales m/m 0.6%
1 January China Manufacturing PMI 50
2 January Italy manufacturing PMI 49.6
Spain manufacturing PMI 54.9
Eurozone final manufacturing PMI 50.8
UK Manufacturing PMI 53.7
US Final manufacturing PMI 54.1
US, ISM manufacturing PMI 57.6
US Construction spending m/m 0.4%

 

Currencies/Events to Watch this Week

  • Pending home sales and manufacturing PMI from the US will be the main events to watch this week. The housing sector data has been relatively weak for the past few readings so markets will be looking to the pending home sales data for the month for any uptick in the housing sector. The weekly unemployment claims will also be looked upon in the run up to the NFP data due later next week.
  • Manufacturing PMI and House price index are the only two main releases from the UK this week but it is unlikely that the releases will have much of an impact on the British Sterling. Expect to see the Cable trade off based on the fundamentals from the US.
  • Eurozone private loans and manufacturing PMI’s from Spain, Italy and final manufacturing PMI will be main releases out of Europe. But with the data coming out just ahead of the New Year, the market reaction could range from volatile to downright no movement in the currency pairs at least for this week.
  • Most of the markets are closed on the December 31st and January 1st and the quiet period in the markets is likely to continue into the end of this week before normal trading resumes next week.

FX Majors Weekly Pivots

  R3 R2 R1 Pivot S1 S2 S3
EURUSD 1.2351 1.2311 1.2244 1.2204 1.2136 1.2096 1.2028
GBPUSD 1.5829 1.5747 1.565 1.5568 1.5471 1.5389 1.5292
USDCAD 1.1756 1.1711 1.1667 1.1623 1.1579 1.1534 1.149
USDJPY 122.556 121.691 121.047 120.182 119.538 118.673 118.029
USDCHF 0.9988 0.9937 0.9907 0.9856 0.9826 0.9775 0.9745

 

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