Weekly Forex Outlook: January 21-25

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On Tuesday, the World Economic Forum will start. It will last from January 22 to January 25. Although usually, we anticipate comments from the meetings to affect markets, this time is already special. Mr. Trump has already announced that the US won’t visit the Forum. More news, more volatility.

We haven’t seen important releases from New Zealand for long. And finally, we will get them. New Zealand CPI level will be released on Tuesday. The currency has been suffering last week. So it needs support from the economic data.

Wednesday will be highlighted by the meeting of the Bank of Japan. No changes of the interest rate are anticipated, however, comments on the economic conditions and the monetary policy will be highly important. Also on Wednesday, traders of the Canadian dollar will have an opportunity to trade on Retail Sales data. It seems like the uptrend of USD/CAD resumes. As a result, the Canadian currency needs support. Thursday will bring jobs data from Australia. There are rumors that the Reserve bank of Australia would cut its rate sooner rather than later. Experts forecast a bearish month for the Australian dollar. Only encouraging economic data will be able to change the mood of analysts.

In the middle of the day, traders should pay attention to comments of the European Central Bank. We all remember that the ECB tapered its quantitative easing policy at the end of 2018, however, still doesn’t give any clues on the rate hikes. A hawkish mood of Mr. Draghi will support the traders’ sentiment.

What about technical setups?

On the weekly chart of the Australian dollar/US dollar pair, the Parabolic SAR indicator signals the downtrend. However, the pair has chances to recover. For that, it needs to stick above 0.7235. The rise above this level won’t mean that the uptrend has started. However, it will give hope on that. If the Australian dollar doesn’t get any support, the pair will fall towards 0.7098. The next support is placed at 0.7015.

Will the ECB boost the euro?

On the weekly chart, the pair keeps trading sideways. The first resistance it needs to break is 1.15. A breakthrough will signal a reversal of the pair. Moreover, the Parabolic SAR indicator gives clues on the upward movement. However, if the USD is supported by some crucial news, the pair may break the bottom line of the horizontal channel at 1.13. A breakthrough will be dramatic for the pair.