Economic Focus This Week Wednesday: January 22, 2025
Key Event of the Week:
US CPI Inflation Report:
Time: Released at 1:30 PM GMT.
Expectations: Headline CPI to rise to 2.8% (year-over-year), up from 2.7% in November. Core CPI (excluding food and energy) is forecasted at 3.3%.
Market Implications: Persistent inflation could challenge the Fed’s rate-cut expectations and bolster the USD. Bond markets may also react, with higher Treasury yields likely.
Europe: Anticipation builds for ECB President Christine Lagarde’s speech later in the day, potentially shedding light on the Eurozone’s monetary policy direction.
Other Notable Updates: Developments from New Zealand’s CPI data during the Asian session.
Thursday: January 23, 2025
Morning Sessions:
New Zealand: Early CPI data will drive initial trading activity in the Asia-Pacific region.
Limited scheduled economic events elsewhere during the early sessions, with attention turning toward Europe and North America.
North American Session:
Canada: Retail sales data is expected to provide insight into consumer spending trends.
US Updates:
Weekly Unemployment Claims: A crucial measure of labor market health.
Crude Oil Inventory Data: A key indicator for energy markets and broader economic sentiment.
Friday: January 24, 2025
Asia-Pacific Session:
Bank of Japan Rate Decision:
Scheduled during lunchtime in Tokyo, this decision is the week’s most significant scheduled event for Asia.
Markets will scrutinize the BoJ’s stance on monetary policy amid ongoing global economic uncertainties.
European Session:
PMI Releases: Flash Services and Manufacturing PMI data will be released for France, Germany, the Eurozone, and the UK. These figures are critical in gauging economic momentum.
North American Session:
US Economic Data:
Existing Home Sales: A measure of housing market health.
Revised University of Michigan Consumer Sentiment: Provides insights into consumer confidence.
Markets will conclude the week by digesting the global PMI updates alongside US-specific economic indicators.
Major Currencies: EUR/USD
The EUR/USD pair is trading within a narrow range, reflecting indecision in the market. Investors are weighing the impact of declining German producer prices against the potential for further ECB rate cuts, which would weaken the euro. The pair's momentum remains limited, with traders awaiting clarity on U.S. fiscal policies under Trump's administration. Key Levels:
Support: 1.0265, 1.0238, 1.0223
Resistance: 1.0326, 1.0360, 1.0382
Trading Recommendations:
Sell: Near resistance at 1.0326, with targets at 1.0265 or lower. Ensure the MACD shows downward momentum.
Buy: On a confirmed breakout above 1.0360, targeting 1.0382 and beyond. Watch for MACD crossover above the zero line.
Trend: Neutral to bearish. A break below 1.0265 may signal further downside.
Major Currencies: EUR/USD
Current Market Conditions
The EUR/USD pair is currently trending upward, with moderate gains attributed to expectations of a cautious ECB monetary policy stance and continued concerns about the Eurozone economy. Inflation in the Eurozone remains elevated, but a slowdown in growth and dovish rhetoric from the ECB have capped the euro’s potential. On the other hand, mixed U.S. economic data has caused volatility in the dollar, leading to short-term upward moves in EUR/USD.
Key Levels
Support Levels: 1.0354, 1.0299, 1.0265, 1.0238
Resistance Levels: 1.0434, 1.0458, 1.0554
Forecast
The pair is expected to maintain a bullish trend in the near term if it breaks above 1.0434, with a potential test of 1.0458 and 1.0554. A failure to sustain above 1.0434 could lead to a decline toward 1.0354. A breach below this level would confirm a resumption of the downtrend, with further declines toward 1.0265.
Trading Strategy
Buying Opportunities: Enter long positions above 1.0434 with targets at 1.0458 and 1.0554.
Selling Opportunities: Short positions can be considered near 1.0434 or 1.0458 with a bearish reaction, targeting 1.0354.
Major Currencies: EUR/USD
Current Trend: Mixed; consolidation within a narrow range. Key Levels:
Support: 1.0392, 1.0343
Resistance: 1.0434, 1.0458
Analysis: The euro's recent strength reflects optimism tied to trade developments, though price action suggests a lack of strong momentum. Resistance at 1.0434 caps the upside, while the support at 1.0392 offers a potential base for consolidation. Market participants await labor market data and central bank policy signals, which could drive short-term volatility. Forecast: Consolidation likely between 1.0392 and 1.0458. A break above resistance could target 1.0465, while a drop below 1.0392 may lead to 1.0343.
Major Currencies: EUR/USD
Current Market Overview:
EUR/USD has shown bullish momentum, climbing above 1.05 amidst weaker U.S. data and improving economic sentiment in the Eurozone. Optimistic IFO data from Germany has strengthened the euro, although further gains may depend on U.S. housing market data, which could impact USD strength. Forecast:
Support Levels: 1.0458, 1.0436, 1.0370
Resistance Levels: 1.0516, 1.0537
The pair is likely to remain bullish, targeting 1.0537 and potentially 1.0583 if U.S. data disappoints.
A break below 1.0458 could lead to a test of 1.0436 and shift momentum towards a bearish trend.
Trading Strategy:
Buy Opportunities: Look for confirmed signals around 1.0458 or 1.0436, targeting 1.0516 and 1.0537.
Sell Opportunities: If the price consolidates below 1.0458, consider short positions targeting 1.0436 or lower.
Major Currencies: EUR/USD
The euro has been under pressure due to weak German and eurozone economic data. Market sentiment remains cautious ahead of the Federal Reserve’s statements, which will provide further clarity on interest rate policies. If the Fed signals a more dovish stance, the euro could recover, testing resistance levels at 1.0456 and 1.0516. However, if the Fed maintains a hawkish outlook, the euro may see further downside momentum, testing key support levels at 1.0410 and 1.0372.
Support Levels: 1.0436, 1.0410, 1.0372, 1.0343
Resistance Levels: 1.0456, 1.0516, 1.0537
The current trend remains bullish, with price consolidation near the demand zone below 1.0436. A breakout above 1.0456 could signal further upside movement. However, if 1.0372 is breached, the bearish trend may resume.
Major Currencies: EUR/USD
Market Analysis:
The euro remains under pressure due to weak GDP growth in the Eurozone and expectations of further rate cuts by the European Central Bank (ECB). The ECB is likely to maintain a dovish stance, leading to increased downside risks for the euro. Meanwhile, U.S. GDP data and labor market indicators remain crucial for future price movements, as strong U.S. data could further support the dollar. Forecast:
A decline toward 1.0372 is likely if the euro remains weak.
Resistance stands at 1.0456, where sellers may become active.
A break below 1.0372 could trigger further selling pressure toward 1.0343.
If the price consolidates above 1.0456, a short-term bullish trend could emerge.
Major Currencies: EUR/USDMarket Overview:
The euro has experienced downward pressure amid strengthening demand for the U.S. dollar. Recent economic data releases have shown resilience in the U.S. economy, contributing to the dollar’s strength. Additionally, concerns over tariff policies toward the Eurozone are weighing on investor sentiment. Key Levels:
Support: 1.0239, 1.0178
Resistance: 1.0267, 1.0387, 1.0433
Forecast:
Bearish Outlook: If the price consolidates below 1.0239, further declines toward 1.0178 are likely.
Bullish Scenario: A break above 1.0433 could signal a reversal and potential recovery towards 1.0500.
Major Currencies: EUR/USD
Market Overview:
The euro remains under pressure, trading around 1.03, with market sentiment being influenced by U.S. economic data and trade policies. The recent rise in Eurozone inflation to 2.5% has exceeded expectations, adding to the complexity of the euro’s trajectory. The U.S. labor market data, including job openings and factory orders, will be key drivers for EUR/USD movements in the short term. Support Levels: 1.0272, 1.0239, 1.0178 Resistance Levels: 1.0342, 1.0381, 1.0433
The short-term trend is bearish. A reaction from the 1.0342 support level suggests potential for a temporary upward correction toward 1.0381. However, if the price breaks above 1.0433, a further bullish continuation is likely. Conversely, a break below 1.0272 may open the door for further declines toward 1.0178.
Major Currencies: XAU/USD
Market Overview:
Gold has reached record highs amid increased demand for safe-haven assets. Market uncertainty surrounding global tariffs and economic slowdown fears have supported the metal. While gold is trading at elevated levels, signs of exhaustion suggest a potential technical correction. Key Levels:
Support: 2280
Resistance: 2340
Forecast: The overall trend remains bullish, with gold continuing to post new highs. However, if the price fails to hold above 2,310, a deeper correction toward 2,280 and potentially 2,260 is possible. A breakdown below 2,240 would confirm further downside pressure. On the other hand, a move above 2,340 could open the door for further gains toward 2,360 and beyond. The market remains sensitive to geopolitical developments and Federal Reserve policy expectations.
Major Currencies: XAU/USD
Market Overview:
Gold has surged to record highs amid increasing geopolitical risks, weakening U.S. dollar, and central bank demand. The anticipation of Federal Reserve rate cuts and trade barriers has further fueled the rally. Strong demand from central banks and ETFs continues to support higher gold prices. Key Levels:
Support Levels: 2861, 2807
Resistance Levels: 2900
Trading Strategy:
Buying opportunities are recommended at 2861 if price reacts positively.
If resistance at 2900 is breached, further gains towards 2910 or higher are likely.
If price consolidates below 2861, a corrective move toward 2807 could be considered.
Major Currencies: XAU/USD
Gold has pulled back from its recent highs but remains in a bullish trend overall. Current support is seen at 2,880, with a potential rebound towards resistance at 2,907 if buying momentum resumes. A break below 2,880 could lead to further declines towards 2,857. However, as geopolitical tensions and economic uncertainty persist, demand for gold as a safe-haven asset could remain strong.
Major Currencies: XAU/USD
Market Overview
Gold prices have experienced modest gains but remain below recent highs. Stronger-than-expected U.S. inflation data has limited gold’s upward potential as it reinforces expectations of a hawkish Federal Reserve. However, ongoing global uncertainties, including trade concerns and geopolitical tensions, continue to provide a supportive backdrop for gold as a safe-haven asset.
Support and Resistance Levels
Support: 2871, 2834, 2807
Resistance: 2950, 3000
Forecast
Gold remains in an uptrend, with key resistance at 2950. If bullish momentum persists, a move toward 3000 is possible. However, if the price falls below 2834, a shift toward a bearish outlook is likely, with potential downside toward 2807. Investors should watch U.S. Treasury yields and Fed commentary for further direction.
Major Currencies: XAU/USD
Market Analysis:
Gold remains in a bullish trend, consolidating around the psychological level of $2,900. Recent volatility has been driven by geopolitical risks and concerns over US trade policies. A double-top pattern has formed, suggesting the possibility of a short-term correction. However, gold's status as a safe-haven asset continues to support demand. Forecast:
If gold consolidates above $2,908, further gains toward $2,968 are likely. However, a break below $2,890 could signal a deeper correction toward $2,789. Support Levels: $2,890, $2,789 Resistance Levels: $2,908, $2,968
Major Currencies: XAU/USD
Market Analysis: Gold remains in an uptrend, supported by global economic uncertainties and safe-haven demand. Concerns over a trade war and geopolitical tensions continue to drive interest in the metal, despite some resistance from Federal Reserve policy. Key Levels:
Support: 2865, 2807
Resistance: 2910, 2950, 3000
Gold is trading within a supply zone. A break above 2910 could trigger a rally toward 2950 and 3000. However, if sellers take control, a correction toward 2865 is likely. Forecast:
Bullish momentum remains unless support at 2834 is breached.
Volatility expected due to economic and geopolitical factors.
Major Currencies: XAU/USD
Current Trend: Bullish Gold has been rising as investors seek safe-haven assets amid geopolitical uncertainties and trade concerns. The outlook for U.S. interest rates and inflation expectations will play a key role in determining future price action. Support Levels: 2865, 2807 Resistance Levels: 2910, 2950, 3000 Forecast:
A break above 2950 could lead to a test of the 3000 psychological resistance level.
If the price holds above 2910, further gains are expected.
A drop below 2834 could signal a shift toward a bearish trend.
