2017 Week 4 – An insight into the weekly high impact fundamental news for January 22 to 29. It already has been an eventful month so far. Commence your week with key upcoming news and fundamental developments. This is the first week of Donald Trump’s presidency. How will markets have reacted after the Presidential Inauguration?
20 January, AtoZForex – Last week we commented, “good or bad” the next four years are going to test everyone in the new USA administration.We try to unravel the coming week and give insights on trading opportunities. With key focus on USA policies both domestic and overseas. Impact on the US Dollar, will markets push the dollar south? Will the bull run continue with Dow smashing the 20,000 barrier or not? How will the FED respond and deal with new administration? Are markets going to be bullish or bearish?
Weekly high impact fundamental news on GBPUSD
The key high impact fundamental news for the UK pound is on Tuesday 24 January and continued reaction from PM Theresa May’s visit last week to the World Economic Forum. Also, any negative economic news with impact GBP going south. Traders, can expect “gapping” after Friday close and Monday opening next week and should trade cautiously.
GBPUSD Technical Analysis – Short from 1.2518-1.2530?
For next week, our Fibonacci levels are set between the two weekly bearish candles from the low of 1.1853 to the high at 1.2949.
Even though we saw GBP bounce back from the low of 1.1987, few pips above the 88.1% Fibonacci retracement zone (drawn as per the teachings of Yagub Rahinov) at 1.1983 level.
Next week, I believe that as the new US administration settles in, markets will experience US dollar weakness and GBP will appreciate, provided there is a clear break above the 1.2415 level. The reason, why I am short from 1.2518-30 level is because of the following three reasons.
- there is a strong resistance zone between 1.2518 and 1.2530,
- price in the last two months failed to close above 1.2512 level
- this level is also a key 38.2% Fibonaaci retracement zone
- this level is also in confluence with the weekly 20sma.
Thursday January 26
At 09:30 am GMT, we have the Preliminary GDP q/q data release, expect GDP to decrease and catalyst for the GBP to move on the downside? Currently, markets expect a decrease of 0.1%.
Weekly high impact fundamental news on EURUSD
The EUR is US dollar driven currently and with ECB’s position(dovish) of a wait and see policy on rate hikes, our bias for this pair is bearish. Expect EUR to depreciate as ECB sits on the sidelines.
Sunday January 22
At 11:00pm GMT ECB President Draghi is due to speak at the awarding of the Permio Camillo Cavour, in Torino. Traders will be looking for further clues to the ECB’s position on future policy and rate hikes.
Wednesday January 25
At 09:00 GMT German Ifo Business Climate data is released expected to show positive sentiment, expect EUR to appreciate.
EURUSD Technical Analysis – mid/long term outlook and intra-day view
For the coming week, our Fibonacci levels are set between the low of 1.0366 to the high at 1.0875, remains unchanged from last week at this stage.
The EURUSD has been range bound from the low of 1.0440 (Mar 8 2015) to the high of 1.1713 (August 23 2015). Although, these levels have been tested, there has been no clear break on either side and has been in consolidation. Since, mid December 2015, the EURUSD has been on a bullish move.
Why am I short on EURUSD in the mid-long term?
Unless, price clearly breaks and remains above the 1.1715-20, we would shift our long term bias to the upside.
These are reasons for the mid-long term short position.
- fundamentals weigh heavily on the EUR, with elections due in a number of Member states, Brexit negotiations, US policies, Grexit
- from the technical perspective, price is below both weekly 20sma and 100sma, indicating a down trend is in place.
- MACD and RSI are bearish territory on the weekly chart.
Fx pending mid-long term short position @1.0995-1.1005 SL @ 1.1190
On intra-day, as we write, price currently is bouncing between the 38.2% Fibonacci retracement zone and the hourly 20sma and 100sma. If price breaks above the 1.0705-10, further move upside would meet strong resistance at 1.0800-15 level. MACD is just above the neutral line, sloping down, while RSI is in the neutral zone.
On the hourly chart, we are bullish EUR, after breaking though we could see a test of the 1.0680 level (38.2% Fibonacci retracement zone) before continuing to the upside. Our initial target would be 1.0850-75 zone, with a strong resistance level at 1.0814. For our bearish outlook, Once price breaks through the 1.0560-55 level, we could see price move towards the 1.0475-50 levels with potential further target at 1.0427 our 88.1% Fibonacci retracement zone. Mid-long term downside targets at 1.0172.
Fx pending short position @1.0814; SL @ 40-45pips; TP1 @ 60-62pips;
Weekly high impact fundamental news on USDJPY
This is President Trump’s first week in the White House. It was clear from the speech, that the world needs to be concerned, with USA first, rest of world second. A protectionist policy will come into effect in the first year of the new presidency, if not sooner.
Wednesday January 25
At 3:30pm GMT we have the weekly Crude Oil inventories, as traders can experience swings towards both the bulls and bears.
Thursday January 26
At 1:30pm GMT we have the weekly unemployment claims. Market expectation is for an increase in the number of claims, expect the USD to depreciate.
Friday January 27
At 1:30pm GMT we have two high impact news, firstly, the Advanced GDP (q/q), expected to shrink by 1.4%. Secondly, we have the Core Durable Goods Orders (m/m) expected to show a drop by 0.1%. If the data comes in at worse than expectation, markets can expect the USD depreciating.
USDJPY Technical Analysis – Continued bearish bias
The Fibonacci retracement zone is from the low of 99.00 to the high of 125.85 on the weekly chart.
The JPY strength continued this week against the greenback, however, the USD seems to be ending the week on higher note compared to the start of the week. However, the current pullback as mentioned last week could be part of a deeper pullback to the 110.25 level just above the weekly 61.8% Fibonacci retracement zone before rebounding to the upside.
Price is sandwiched between the 20sma and the 100sma on the hourly chart. This Thursday, we saw price retest the 38.2% (115.59) Fibonacci retracement zone and reversed to the downside. For a sustained move to the downside we would need to see a clear break of the 114.00 level and 113.80 levels respectively. We remain bearish on USDJPY.
Fx pending long position @110.25; SL @ 60-70pips; TP1 @ 90-105pips;
Which other weekly high impact fundamental news will you be looking into? Have we missed something? Leave your comments below.