It’s been a hell of a week with most news headlines focusing to the Gamestop situation with US equities diverting the focus on the FX Market. Nevertheless, the US Dollar gained in most currency pairs but especially on USDJPY with an almost 1% increase.
On the Covid-19 front, the number of new contagions continues to decline globally after peaking at 845K early on January to roughly 500K reported on Saturday. However, harsh restrictive measures are still in place, mostly in Europe, as several country states extended lockdowns and curfews during February.
The countries that have vaccinated the highest percentage of their population are Israel, the United Arab Emirates and the UK. The UK leading immunization may take a turn to the worst, as on Friday, the EU imposed export restrictions on vaccines after accusing the British- AstraZeneca of favouring its home market, in damage of EU contracts.
This week’s calendar is full of significant economic announcements worldwide and investors are expecting a volatile market. In Europe traders will be looking at an expected declined Q4 2020 Eurozone GDP on Tuesday, and the CPI inflation report on Wednesday.
On Friday, the release of the Non-Farm payroll data for January which will deliver a critical update on the state of the US employment. Previous NFP announcements have been disappointing, showing a slow economic recovery during the Covid-19 recovery.
Past week performance and signals:
Pairs in Focus:
EUR/USD
Last week, the pair has been ranging as expected. This week, EURUSD price is still expected that will range-bound, but always the US employment change measure on Friday.
FORECAST: NEUTRAL
Resistance: 1.2200, 1.2250, 1.2300
Support: 1.2150, 1.2100, 1.2050
AUD/USD
The pair last week decline in effect of the US dollar pullback. It’s a busy week ahead for Australia with a Reserve Bank meeting on Monday, retail sales and PMI reports scheduled for release and a US Manufacturing Index and the NFP numbers on Friday.
FORECAST: NEUTRAL
Resistance: 0.7700, 0.7750, 0.7800
Support: 0.7650, 0.7600, 0.7550
USD/CAD
Last week, the USDCAD pair continued its bull run from a strong US Dollar. This week will be all eyes for the Fridays Canadian and US employment change and as a expected great volatility. We do still expect further gains for the US dollar this week.
FORECAST: LONG
Resistance: 1.2800, 1.2850, 1.2900
Support: 1.2700, 1.2650, 1.2600
GBP/USD
Influenced by UK being among the top-three larger vaccinated nations, the Cable increased last week by a small 0.20%. This Thursday, investors will be focused on the UK’s BOE Monetary Policy Report and Official Bank Rate which is expected to be unchanged.
FORECAST: NEUTRAL
Resistance: 1.3700, 1.3750, 1.3800
Support: 1.3600, 1.3550, 1.3500
USD/JPY
Last week saw the USDJPY pair to increase by 1%, the most increase of the last 2 months. With no significant economic announcements coming from Japan, this week traders will be watching as the US NFP number on Friday.
The pair is expected to continue its bullish push.
FORECAST: LONG
Resistance: 105.0, 105.5, 106.0
Support: 104.5, 104.0, 103.5
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