THE WORLD ECONOMIC FORUM AND CENTRAL BANKS HEADLINE A BUSY TRADING WEEK
DAVOS AND CENTRAL BANK
In the upcoming trading week financial markets will turn their attention to The World Economic Forum, where global leaders and policy makers will come together in Davos, Switzerland. The U.S President Donald Trump will be attending this year alongside his team of economic advisors, traders and investors will be especially eager to hear his current thoughts on the United States and the global economy.
The economic calendar is also jammed packed, with the Bank of Japan and European Central Bank interest rate decision and policy statements set to be released. We also see key employment and GDP data out from the UK economy, and December Manufacturing and Goods data from the United States economy.
Monday 22nd January, U.S Chicago National Activity Index
The Chicago National FED National Activity Index is released by the Chicago Federal Reserve Bank, and tracks the economic activity in the seventh district. The index is a weighted average of 85 indicators based on economic data covering production and income, employment, personal consumption, housing, manufacturing, trade sales, inventories, and orders. It is a key indicator of economic growth and a way of identifying potential inflation inside the U.S economy.
Tuesday 23rd January, BOJ Monetary Policy Decision
The Bank of Japan will come to a consensus this week on where to set interest rates, with most economists expecting the BOJ to remain on hold. Members of the BOJ meet once a month for two days to discuss economic developments inside and outside of the country. Changes in the interest rate have wide consequences for the Japanese economy, affecting consumer loans, mortgages, bonds and the exchange rate of the Yen.
The USDJPY pair remains bearish while trading below the 111.48 level, further losses towards 110.00 and 109.60 seem likely.
Should price-action trade above the 111.48 level, further upside towards 112.20 and 113.80 remains possible.
Wednesday 24th January, UK Job Claimant Count Change
The United Kingdom Claimant Count Change is expected to fall in December, compared to the November reading. The UK Claimant Count Change is released by the National Statistics, and measures the change in the number of unemployed people in the United Kingdom. This figure is not an unemployment indicator, it however measures the number of people claiming benefits, and remains a leading measure of the health of the UK economy.
The GBPUSD pair remains bullish while trading above the 1.3720 level, further upside towards 1.3944 and 1.4030 remains possible.
Should price-action on the GBPUSD pair fall below the 1.3720 level, further selling towards 1.3657 and 1.3560 is likely to occur.
Thursday 25th January, ECB Monetary Policy Decision
The European Central Bank will meet to decide on interest on Thursday, while ECB President Mario Draghi will deliver the ECB monetary policy statement during his scheduled press conference. Traders and investors will watch for any change in tone or language from Mario Draghi, and any adjustments in the size of the ECB asset purchasing programme, commonly known as QE.
The EURUSD pair remains strongly bullish while trading above the 1.2093 level, further gains towards 1.2313 and 1.2350 seem likely.
Should price-action on the EURUSD pair decline below the 1.2093 level, losses towards 1.2050 and 1.1980 remain possible.
Friday 26th January, U.S Fourth Quarter GDP
Gross Domestic Product Annualized shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the U.S dollar, while a low reading is taken as a negative for the U.S dollar.