Weekly Forex Outlook: January 14-18

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What events are anticipated to make markets volatile?

The most important event of Tuesday is the Parliament Brexit vote. It’s worth reminding that previously the vote was scheduled on January 11. However, Theresa May canceled it because of the increasing risks of being defeated. No matter if the vote is postponed again or it takes place, the British pound will be under big pressure. Moreover, there are risks that the Parliament votes against the May’s plan that is highly negative for the British currency.

Also on Tuesday, traders should pay attention to the US PPI figure.

Wednesday’s British CPI data will become highly important for the British pound in times of Brexit uncertainties.

Thursday and Friday will be highlighted by G20 Meetings. Any comments during the meetings may turn markets upside down.

Also on the last day of the week, Canadian CPI and British Retail Sales releases will drive the GBP and CAD.

What about the technical side?

The direction of the EUR/USD pair will mostly depend on strength of the USD. During the last days, the greenback was quite weak because of the cautious tone of the Federal Reserve. If the economic data aren’t supportive, it will be difficult for the USD to recover. In case of the further fall of the US currency, EUR/USD will be able to break the resistance at 1.16. The next important level is 1.17. If the USD is supported by the economic data, the pair may suffer. The first crucial support will lie at 1.1340.

What are the crucial levels for GBP/USD?

To keep the upward movement, the pair needs to break above the resistance at 1.2883. Up to now, technical indicators signal the continuation of the rise, however, uncertainties around the Brexit deal may change the situation. If there is negative news on the Brexit deal, the pair won’t be able to strengthen the uptrend. The first important support is at 1.2578.