MAJOR CURRENCIES ARE CONSOLIDATING AHEAD OF DAVOS 2018

The EUR/USD price is consolidating after confident increases during the previous weeks. Investors are waiting for news from the World Economic Forum Annual Meeting which starts tomorrow in Davos. Usually there are no game-changing statements at this forum, but we do not exclude spikes of volatility. Some important news may also come from the ECOFIN meeting in the EU that is also planned tomorrow. Today there are no important publications that are likely to influence the course of trading. Some optimism for the euro came from Germany, where there was some progress in the coalition talks to form a government and will ease political tensions in the Eurozone.

Tomorrow the course of trading will be influenced by the news on the Economic Sentiment in the Eurozone and Germany, which is the largest economy in Europe. At the same time, attention should be paid to the Consumer Confidence index for the monetary union also due out tomorrow.

The British pound is consolidating after a confident increase and due to the price approaching the psychologically important mark at 1.4000. Trader’s mood may be impacted tomorrow by the news on public sector net borrowings and CBI’s industrial order expectations.

The USD/JPY tomorrow may be influenced by the monetary policy statement by the Bank of Japan and macro statistics on the All Industries Activity in December in Japan. The monetary policy settings are likely to remain without changes, but the rhetoric on the asset purchasing program will be at the center of attention and may lead to sharp price moves.

EUR/USD

The EUR/USD quotes are moving in the 1.2200-1.2300 corridor. In case of the price gaining a foothold above 1.2300, the next targets are likely to be at 1.2400 and 1.2500. On the other hand, a signal for the change in trend may come from the price fixing under the support at 1.2200. The immediate objectives in case of the price decline will be at 1.2070 and 1.1925.

GBP/USD

The GBP/USD is trying to gain a foothold above the important 1.3850 line. The potential increase is limited by the psychologically important 1.4000 level. overcoming this level is unlikely at the first attempt, but in case of the bulls pushing the pair price above it, we may see a strong upward impulse afterwards with the target at 1.4400. The strong descending move is also possible in case of the price breaking through the 1.3850 line.

USD/JPY

The USD/JPY is moving within the limits of the triangle and a decline in the amplitude of price fluctuations points to a possible strong movement. The signal to buy, with the growth potential to 111.70 and 113.00, may come once price fixes above 111.00, but on the other hand, breaking through 110.30 may become the basis for a continued drop with potential objectives at 109.60 and 108.50.