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The greenback edged a bit higher against its counterparts on Friday, yet overall tends to remain rather stable given also that the earnings releases catch a substantial part of the market’s attention, shifting it towards US stock markets. In the coming week we highlight the release of the Fed’s interest rate decision and the bank is widely expected to downshift its rate hiking path and deliver a 25 basis points rate hike. Yet the bank may maintain its hawkish tone, which could provide some support for the USD. Also BoE is expected to come under the trader’s magnifying loupe as it is expected to deliver a 50 basis points rate hike and maintain a hawkish tone given the cost-of-living crisis the UK economy is facing. In the FX market though we expect the market’s attention to shift towards the EUR, as a high number of high-impact financial releases concerning the single currency are spread in the week and the ECB is to deliver another 50-basis points rate hike.
EUR/USD maintained a sideways motion on Friday just above the 1.0855 (S1) support line. We tend to maintain a bias for the sideways motion to continue currently yet a change of trend is possible. Should the bulls take over, we may see EUR/USD aiming if not testing the 1.1000 (R1) resistance line. Should the bears be in charge we may see the pair breaking the 1.0855 (S1) support line and aim for the 1.0715 (S2) support level that held its ground on the 10th of January.
AUD/USD remained rather stable just below the 0.7125 (R1) resistance line. We tend to remain in a sideways bias for the pair given that the RSI indicator nears the reading of 50, yet we note the slight bearish movement during today’s Asian session. Should the bears actually take charge of the pair’s direction, we may see AUD/USD aiming if not breaking the 0.7010 (S1) support line. Should the bulls take over, we may see AUD/USD breaking the 0.7125 (R1) resistance line and aim for the 0.7256 (R2) resistance level.
Other highlights for the day:
Today we would also like to highlight the release of Sweden’s preliminary GDP rate for Q4, Switzerland’s KOF indicator for January, and Germany’s preliminary GDP rate for Q4, all releases being in the European session. During tomorrow’s Asian session, we note from Japan the release of the preliminary industrial output growth rate for December and the retail sales growth rate for the same month, while from Australia we get the retail sales growth rate for December and China’s NBS manufacturing PMI figure for January.
As for the rest of the week
On Tuesday we highlight Eurozone’s and France’s preliminary quarter-on-quarter GDP rate for Q4, Germany’s preliminary year-on-year HICP rate for January, Canada’s month-on-month GDP rate for November and the US Consumer Confidence for the month of January. On Wednesday we highlight the Fed’s February interest rate decision and the speech from Fed Chair Powell following the decision. Furthermore, we note Eurozone’s preliminary year-on-year HICP print for January, China’s final Caixin Manufacturing PMI alongside Germany’s and Canada’s S&P Manufacturing PMI figures, all for the month of January. Lastly, from the US we note the ADP National Employment figure for January, the JOLTS Job Openings figure for December and the ISM Manufacturing PMI figure for January. On Thursday, we highlight the interest rate decisions from the Bank of England, the European Central Bank and the Central Bank of the Czech Republic. Also, from the US we note the weekly initial jobless claims and the Durable Goods orders for the month of December. On Friday we highlight the employment report for January from the US, with the Non-Farm Payrolls, the unemployment rate and month-on-month Average Earnings figures being updated. We also note a wide array of Services PMIs from Australia, Japan, China, France, the Eurozone and the UK all for January and finally the US ISM non-manufacturing PMI for the same month.
EUR/USD H4 Chart
Support: 1.0855 (S1), 1.0715 (S2), 1.0585 (S3)
Resistance: 1.1000 (R1), 1.1180 (R2), 1.1325 (R3)
AUD/USD H4 Chart
Support: 0.7010 (S1), 0.6900 (S2), 0.6800 (S3)
Resistance: 0.7125 (R1), 0.7265 (R2), 0.7395 (R3)
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Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.
JA 
