Weekly Forex Forecast: 19th to 23rd January

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Forex Forecast
Weekly Forex Forecast: 19th to 23rd January

The Swiss Shocker saw the Swiss Franc take the lead, rising 18.11% against the Greenback, while the Euro understandably turned the weakest losing -2.39% to the buck, as the largest known buyer of Euros now exits the markets. The coming week is expected to see major central bank policy decisions as well as key economic statistics.

weekly

The markets are widely expecting to see a major announcement from Mario Draghi on the proposed Quantitative Easing plan, which is likely to the European currencies subdued in the run up to the event. Most importantly, over the coming weekend, Greece will be going to polls with the outcome further fuelling volatility over the next week.

Fundamentals for the Week 19 – 23 Jan

Date Event Estimates
19 January Japan revised industrial production m/m
Japan consumer confidence 38.6
Switzerland PPI m/m -0.6%
US Bank Holiday
20 January China GDP q/y 7.2%
China industrial production m/m 7.4%
German PPI m/m -0.3%
German ZEW Economic sentiment 40.1
Eurozone ZEW Economic sentiment 37.6
Canada manufacturing sales m/m -0.5%
New Zealand Global dairy trade
New Zealand quarterly CPI 0%
21 January Australia Westpac consumer sentiment
BoJ monetary policy statement
BoJ press conference
UK average earnings 3m/y 1.7%
UK Claimant count change -24.2k
UK unemployment rate 5.9%
BoE MPC meeting minutes
Canada wholesale sales m/m 0.2%
US Building permits 106mln
US Housing starts 1.04mln
BoC Monetary policy statement
22 January Italy retail sales m/m 0.1%
ECB Monetary Policy statement
ECB Press conference
Eurozone consumer confidence -11
23 January China HSBC Flash manufacturing PMI 49.5
French Flash manufacturing PMI 48.1
French Flash services PMI 50.9
German Flash manufacturing PMI 51.8
German Flash services PMI 526
Eurozone Flash manufacturing PMI 51
Eurozone Flash services PMI 52.1
UK retail sales m/m -0.6%
Canada Core CPI m/m -0.3%
Canada CPI m/m -0.5%
Canada Core retail sales m/m 0.5%
US Flash manufacturing PMI 54.1

 

Currencies/Events to Watch this Week

Euro: Its decision time for Mario Draghi and team and they decide the fate of the Euro. With markets heavily speculating on the announcement of the QE, anything short of expectations could upset the Euro shorts. The ECB’s meeting is likely to overshadow all other economic releases from the Eurozone this week.

US Dollar: The Greenback takes a backseat this week with a short trading week as markets remain closed on Monday, 19th January on account of Martin Luther King holiday.

British Pound: Retail sales and monthly unemployment numbers will keep the British Pound busy this week. Despite the slowdown, the economic activity continues to remain steady. The BoE’s vote count is unlikely to have not much of an effect, unless we get to see more dissenters voting in favor of a rate hike, which is unlikely given the subdued inflation in the region.

Yen: Bank of Japan will be holding its monthly monetary policy meeting followed by a press conference. It is expected that the BoJ could cut its inflation expectations for the year on account of the decline in crude oil prices. However, the monetary policy could hold some surprises, although an expansion to the QQE is unlikely to be announced at this event.

Canadian Dollar: The Loonie will see a lot of economic data coming out this week. The Canadian dollar was hit mostly due to falling oil prices but managed to gain strength in the aftermath of the Swiss shocker. The Bank of Canada will be holding its monthly monetary policy meeting, but expectations are for the policy to remain unchanged. Comments on inflation and GDP growth could however shift the scales to either side.

FX Majors Weekly Pivots

  R3 R2 R1 Pivot S1 S2 S3
EURUSD 1.2214 1.2042 1.1804 1.1631 1.1393 1.122 1.0982
GBPUSD 1.5448 1.5358 1.5257 1.5167 1.5066 1.4976 1.4875
USDCAD 1.232 1.2183 1.2077 1.194 1.1835 1.1698 1.1592
USDJPY 122.796 121.058 119.334 117.596 115.872 114.134 112.41
USDCHF 1.1669 1.0954 0.9783 0.9068 0.7869 0.7182 0.601

 

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