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FxPro Forex Analysis: Key Economic Data Events – Week of 22nd – 26th January, 2018

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Monday, there aren’t any tier 1 economic data releases scheduled. The main point of interest could be the Eurogroup meeting (the informal name of a meeting of Eurozone finance ministers, EU Commissioner and ECB president). This meeting is scheduled for 10.00am GMT and normally happens before a broader meeting of ECOFIN (ministers of finance of EU). Eurogroup comes together to reach a common position for the monetary bloc.

Tuesday at 3am GMT – Bank of Japan (BOJ) rate decision. No change in policy is expected, however, the JPY currency crosses could be impacted, especially if we receive any comments from the BOJ on the future rates policy changes.

USDJPY 4-Hour Chart

USDJPY 4-Hour Chart

USDJPY 4-Hourly price action is currently in a downtrend, capped by the initial upside resistance at 111.00 level. A confirmed breakout could target additional upside resistances at 111.54, followed by 112.00 levels. The downside is supported by the cluster of current lows at 110.27 and 110.00 levels. A confirmed loss of this support zone could target additional downside support at 109.50 level.

Wednesday 8-9am GMT – French, German and Eurozone Services & Manufacturing PMIs (January, flash). These figures are released ahead of this week’s ECB rate decision and will likely impact Euro currency crosses and European Equities markets.

Wednesday 9.30am GMT – UK Employment data. Market participants will closely watch for any changes to the UK Unemployment level, which is currently at 4.2%. Additionally, the (December) Average Hourly Earnings data release will be closely watched for any signs of changes to the previous 2.5% rise.

UK100 4-Hour Chart

UK100 4-Hour Chart

FTSE100 – UK100 4-Hourly price action appears to be supported by the rising support trend line. Initial downside support is at the 7700-7685 zone. A confirmed loss could target additional downside supports at 7650 followed by the 7614-7600 levels. The initial upside resistance is at 7750, A confirmed breakout above could target additional upside resistances at 7785 followed by 7800.

Wednesday 3.30pm GMT – DOE US Crude Oil inventories for Week ending 19th January are due to be released. Last week, the market was initially surprised by -6.861M, which was a much larger drawdown than the expected -3.588M, from a previous value of -4.948M. However, the initial rally in WTI and Brent crude futures faded after the inventories data, as traders reacted to a rise in U.S. crude production. WTI Crude is trading close to $63.00 after retesting the $64.00 mark, which is the highest level in more than three years prior to the data release.

U.S. Crude Oil 1-Hour Chart

U.S. Crude Oil 1-Hour Chart

WTI Crude – US Crude 1-Hourly price appears to be in the process of forming a topping Head and Shoulder price pattern, which is initially supported by the “neckline” level at 63.00. A confirmed loss could target additional downside supports at 62.50, followed by 62.00. Alternatively, a confirmed breakout and a daily close above the initial upside resistance at 64.00 level would negate the topping Head and Shoulder pattern, targeting additional upside resistances at the 64.50 and 64.77-65.00 levels.

Thursday 12.45pm GMT – European Central Bank (ECB) Rate decision. No change in policy is expected for this release. The Rate decision will be followed by an ECB Press Conference, which is scheduled for 13.30pm GMT and will be a closely watched event, especially in relation to the recent comments about the future direction of the rate policy for the remainder of this year. Additionally, the minutes of the December meeting will be closely analysed for any possible changes in tone and sentiment. Markets that could experience increased volatility are Euro currency crosses and European Equity markets.

EURUSD 1-Hour Chart

EURUSD 1-Hour Chart

EURUSD 1-Hourly timeframe price action appears supported by the initial downside support at 1.2166- 1.2150 zone, which is the previous significant swing low and also the 200-period Moving Average. A confirmed loss could target additional downside supports at 1.2085 followed by 1.2000 and 1.1942. The upside is currently capped by resistance at the 1.2290 level. A confirmed breakout higher could target additional upside resistances at the 1.2323 followed by 1.2400 levels.

Friday 9.30am GMT – UK Gross Domestic Product (GDP). This is the first estimate of GDP and it is forecasted to show a rise to 1.8% from 1.7% YoY and to 0.5% from 0.4% QoQ. The UK pound sterling, GBP currency crosses and UK equity markets could be impacted by this data release.

GBPUSD 1-Hour Chart

GBPUSD 1-Hour Chart

GBPUSD 1-Hourly price action appears capped by the initial upside resistance at 1.3885. A confirmed breakout higher could target additional upside resistances at the 1.3940 followed by 1.4000 levels. The initial downside support is at 1.3840. A confirmed loss could open up the way for a retest of the additional downside supports at the 1.3800 followed by 1.3740 levels.

Friday 1.30pm GMT – US Gross Domestic Product (GDP) and Durable Goods Orders are scheduled for release. US GDP data is a preliminary Q4 figure and is forecasted to show 3.0% QoQ from a previous 3.2%. Durable Goods Orders estimates are pointing to 0.8% MoM, from a previous 1.3%. The US dollar, USD currency crosses and US equity markets are likely to be impacted by any changes in the actual figures in relation to the expectations.

U.S. Dollar Index 4-Hour Chart

U.S. Dollar Index 4-Hour Chart

USD Index 4-Hourly price action is retesting a 9-monthly low at the current downside support at 9000. A confirmed loss could target additional downside supports at 8950 followed by 8900. Alternatively, any oversold bounce backs are initially capped by resistance at 9070. A confirmed breakout higher could target additional upside resistances at the 9150 followed by 9200-9217 levels.

Apart from the economic data, market participants are looking forward to the 48th World Economic Forum Annual Meeting, which is scheduled for next week and will take place in Davos, Switzerland from 23rd until 26th January.


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