One of the most important weeks of January is starting tomorrow where the market would draw a lot from the outcomes of the economic indicators due this week. The start to the New Year trading was according to the expectations where the major currency pairs had to take some bearish correction after a long-held bullish move in December.
Services data up next
The euro traders who were still bullish on the pair did not enjoy this past week, as the pair went down significantly and ended up at 1.3642 which is at least 100 points below its critical level that would keep it bearish for the short term.
The key economic indicators due for the Eurozone in this coming week include the services PMI of western European economies, Eurozone unemployment rate, German unemployment change, and German industrial production.
Important Week for GBP
Similarly, the British Pound fell sharply on Thursday, where it also closed on Friday in a short-term bearish channel, hence allowing the sellers to enter the market and hold on to their sell positions. The construction sector couldn’t expand much last month; however, the center of attention for the investors is some critical fundamentals for the GBP this week including the services PMI and the manufacturing PMI data.
Provided the data disappoints the GBP investors, then the pair might be heading towards 1.6000 support level within January because it would lower down the chances for the increase in interest rates. However, on the other hand if the data is good then bulls can take the pair to the 1.6477, 1.6510, 1.6544 and 1.6600 resistance levels. And on top of that, if the BoE hints towards increasing the interest rate, then the pair may target the 1.6800 region in January and the 1.7000 level by next month.
Commodity Currencies and Gold
Commodity currencies gained last week where the Australian dollar gained more than 120 points in 2 days and closed at the 0.9000 level, where it is safe to be long, as long as it hovers above the 0.8920 support level. Moreover, gold also gained against the USD but we need to see what is coming this week in the NFP data and where the metal could go.
To contact the reporter of this story: Jonathan Millet at email@example.com