Trading is expected to return to normalcy in what would be the first full trading week of the year. With the start of a new month, lot of data is expected to be released during the week, which should keep the forex markets busy for the week ahead.
Fundamentals for the Week 5th to 9th January
| Date | Event | Estimates |
| 05 January | Germany preliminary CPI m/m | 0.1% |
| Switzerland SVME PMI | 52.9 | |
| Eurozone Sentix investor confidence | -0.9 | |
| UK Construction PMI | 59.2 | |
| 06 January | Australia trade balance | -1.59bn |
| China HSBC services PMI | – | |
| Spain services PMI | 52.9 | |
| Italy services PMI | 51.4 | |
| Eurozone final services PMI | 51.9 | |
| UK services PMI | 58.9 | |
| New Zealand Global dairy prices | – | |
| US Final services PMI | 53.8 | |
| US ISM non-manufacturing PMI | 58.2 | |
| US factory orders m/m | -0.3% | |
| 07 January | German retail sales m/m | 0.2% |
| Italy unemployment rate | 13.3% | |
| Eurozone CPI flash estimates y/y | 0% | |
| Eurozone core CPI flash estimates y/y | 0.6% | |
| Eurozone unemployment rate | 11.5% | |
| Italy preliminary CPI m/m | -0.2% | |
| US ADP nonfarm payroll change | 227k | |
| Canada trade balance | -0.2bn | |
| US trade balance | -42.3bn | |
| Canada Ivey PMI | 52.3 | |
| FOMC meeting minutes | – | |
| 08 January | Australia building approvals m/m | -2.7% |
| German factory orders m/m | -0.6% | |
| Eurozone retail sales m/m | 0.3% | |
| Eurozone PPI m/m | -0.2% | |
| BoE bank rate | 0.5% | |
| US weekly unemployment claims | 291k | |
| 09 January | Australia retail sales m/m | 0.3% |
| China CPI y/y | 1.5% | |
| China PPI y/y | -3.1% | |
| Japan leading indicators | 104.9% | |
| Switzerland unemployment rate | 3.1% | |
| German industrial production m/m | 0.4% | |
| French industrial production m/m | 0.4% | |
| Switzerland CPI m/m | -0.3% | |
| UK manufacturing production m/m | 0.4% | |
| UK construction output m/m | 1.3% | |
| UK industrial output m/m | 0.2% | |
| Canada housing starts | 191k | |
| Canada building permits m/m | 0.8% | |
| Canada employment change | 10.3k | |
| Canada unemployment rate | 6.6% | |
| US NFP | 241k | |
| US unemployment rate | 5.7% | |
| US average hourly earnings | 0.2% |
Currencies/Events to Watch this Week
- The Eurozone takes focus in the first part of the week with preliminary and flash CPI estimates on the tap. With Spain already posting negative inflation, the market expectations are for a wider fall in inflation overall, including the Eurozone monthly headline CPI expected to remain flat. If the actual readings meet estimates, the markets will turn extremely bearish on the Euro. The risk however is should CPI come out better than expected, we could see a short squeeze rally in the EURUSD.
- UK construction and services PMI along with the BoE’s monthly monetary policy minutes will set the tone for the British sterling this week. While the BoE is expected to bring no change to interest rates, the markets will be more focused on the PMI and construction and manufacturing output releases during the week.
- Canada will be heading into an important week with the Ivey PMI followed by the monthly labor market data. Last month’s Canadian unemployment rate rose to 6.6%, up from 6.5% previously and markets are expecting the unemployment rate to be stable for the month.
- The US heads into a very important week starting with the December FOMC meeting minutes concluding the week with the monthly nonfarm payroll data, which is expected to show an improvement in the unemployment rate, while the monthly nonfarm payroll change is expected to be softer at 241k after last month’s 321k solid job growth.
FX Majors Weekly Pivots
| R3 | R2 | R1 | Pivot | S1 | S2 | S3 | |
| EURUSD | 1.2367 | 1.2293 | 1.2147 | 1.2074 | 1.1928 | 1.1854 | 1.1708 |
| GBPUSD | 1.5817 | 1.5718 | 1.5526 | 1.5427 | 1.5235 | 1.5136 | 1.4944 |
| USDCAD | 1.2029 | 1.1897 | 1.1831 | 1.1698 | 1.1632 | 1.1499 | 1.1433 |
| USDJPY | 123.068 | 121.905 | 121.196 | 120.033 | 119.324 | 118.161 | 117.452 |
| USDCHF | 1.0239 | 1.0127 | 1.0070 | 0.9957 | 0.9900 | 0.9787 | 0.973 |