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Next week’s Forex forecast

Sergiy Zlyvko
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Next week January will begin, but it will be only on Wednesday. Moreover, it will be the rest day for banking day all around the world and therefore important releases will start arriving from Thursday. Labor market data from the United States will be published on January 10th. Of news that could have a significant impact on the dollar, we can select only the report on PMI index in the industrial sector in the U.S. (January 2, 15.00 GMT). Macroeconomic statistics from world’s largest economy has recently received the positive and we expect good data. However, they are unlikely to significantly alter the balance of power in the market. In monetary policy the Fed now has no significant uncertainties.

Traders for the single European currency for the period from December 30 to January 3 are not waiting for key macroeconomic reports release. In Germany, bank holiday day also falls on Tuesday and therefore the activity of EURUSD pair trading may fall already on 30th and begin to return to normal from Thursday the 2nd of January. In any case, in the absence of major macroeconomic targets, any trends generated by currency pair may be unstable.

From technical point of view, an important opportunity to overcome the resistance is seen at 1.3800. Breakthrough makes this mark next to the motion of 1.40 with an intermediate level of resistance – 1.3900.

Center for Independent financial information Markit will publish reports on the PMI indices in industrial (January 2, 09.30 GMT) and construction (January 3, 09.30 GMT) UK sectors. Economy of an Albion actively restored recently and refers to the number one candidate among the developed countries to increase the discount rate. We expect this trend continues and the appearance of additional reasons for strengthening of sterling. Goal of the movement for the current uptrend is now a mark of 1.6700.

In Australia and New Zealand, as well as in Germany, 31 December and 1 January won’t be banking days. There will be no macroeconomic releases that could affect the position of these currencies for the coming week. We believe that the dynamics of Aussie and Kiwi against the dollar will be determined by the overall behavior of the US dollar along the entire market. However, we assume that the capacity for growth, in any case is low. Much rather they can move down. The purpose of the downward movement for AUDUSD pair we now define the 0.8700 mark.

In Japan, 31 December to January 3 will be not banking days. Trading activity during the Asian session will be low. Dynamics of the USDJPY pair will depend on the behavior of the dollar, but the potential for Japanese currency’s strengthening is minimal. USDJPY pair continues to remain in an uptrend.

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