EURUSD GBPUSD USDJPY 🆓 Weekly Analysis [January 10

EURUSD GBPUSD USDJPY 🆓 Weekly Analysis [January 10 – January 17, 2022]

Published: Mon, 01/10/22

EUR/USD, GBP/USD, USD/JPY

Weekly Forex Analysis

(January 10 – January 17, 2022)

Hey! This is Philip with our new weekly outlook for EUR/USD, GBP/USD, and USD/JPY.

The text below contains only a short preview.

The Full Weekly Analysis Is Here

EURUSD Technical Analysis:

EURUSD has been consolidating in a flag-like pattern for more than a month and is now coming near the resistance line of its downtrend (channel). At the same time, the consolidation has lessened the oversold conditions entirely, suggesting that the bear trend may be ripe for continuation (daily RSI is near 50 now compared to 25 in late November).

In this context, the first key resistance to watch is the 1.14 zone where is the channel’s upper end (falling trendline) converges with the 55-day moving average (blue line). However, as sexy as the channel and the flag pattern appear, it’s possible that EURUSD may break above this 1.14 resistance zone and still not break the bearish trend. Under such a scenario, the next resistance zone to watch would be 1.15.

To the downside, the first important support is located around 1.13, at the lower end of the consolidative flag pattern. A sustainable break here will signal that the bears should have no problem taking EURUSD below the November 24 low of 1.1185. In this scenario, the bear trend-channel projection points to the 1.10 area as the next destination for EURUSD.

Spreads from ZERO Pips: Trade with a Trusted
Forex and CFD Broker

US Dollar Fundamental Outlook: NFP Miss Prolongs USD Consolidation but Bull Trend May Soon Be Ready to Continue

In a generally slow first trading week in 2022, the Fx market got a stir on Thursday and Friday from US data releases. Namely, the misses in the ISM services PMI on Thursday and the Nonfarm payrolls on Friday were a cause for some disappointment for USD bulls.

Nonfarm payrolls came below expectations quite substantially with an actual print of 199K, while consensus forecasts expected 400-500K. The ISM services also fell more expected to 62 from the very high reading of 69 the previous month. If the data had beat the estimates, we would likely have gotten a USD break to the upside. But, in this way, the NFP and ISM misses have likely led to the current prolongation of the consolidation.

However, despite these shortfalls in the data, the overall implications are still of a healthy US economy. For instance, the unemployment rate fell more than expected to 3.9%, and average hourly earnings (wage growth) beat estimates. It’s worth a reminder that the Fed considers full employment a state with unemployment rates below 4%. That goal has now obviously been already achieved, less than two years into the pandemic. Hence, this is another green light for the Fed to press on the hawkish pedal, and there is little to stop them from proceeding with their tapering and tightening plans. The hawkish Fed should continue to support the dollar, likely leading to an eventual break higher in the DXY index and a break lower in EURUSD.

The central focus on this week’s US calendar is the CPI inflation prints on Wednesday. Both the headline and core figures are expected to come in hot, which should keep Fed tapering and tightening prospects in place. Potential upside surprises in the CPI numbers would likely lead to USD strengthening as this will further increase the pressure on the Fed to act earlier and swifter.

Full Weekly Forex Outlook

Euro Fundamental Outlook: Neutral EUR Stays in Its Broader Ranges; Economic Calendar is Quiet This Week

The common European currency continues to trade inside its broader ranges, stronger versus some and weaker versus other currencies on a relative basis. However, it has been in a consolidative range since late November against its most important counterpart – the US dollar. Indeed, the EURUSD pair is a proxy for overall demand for both euros and US dollars in the Fx market. Thus when EURUSD is falling, it is often accompanied by a broadly strong dollar, while the opposite is true when EURUSD is rising (broadly strong euro).

The key (and only) data piece from the Eurozone last week was Friday’s flash CPI release. It printed slightly higher than consensus forecasts, however, the market doesn’t want to pay too much attention to it because it is largely driven by base effects (German tax hike), which are expected to start fading from the next CPI release. Hence, unlike the Fed, the ECB is not under pressure to think about tightening policy during 2022.

This week’s Eurozone calendar is quiet, which should leave EUR exchange rates to be mainly influenced by overall risk sentiment and specific developments with other currencies.

Copy Successful Traders 100% Automatically

If you have any questions or feedback, don't hesitate to reply to this email.

Best Regards,
Philip
Senior Forex Manager
FX Trading Revolution
w: www.fxtradingrevolution.com

e: philip@fxtradingrevolution.com

P.S. Email providers such as Gmail and Yahoo! Mail sometimes place messages in different folders or tabs (often in the promotions tab). To ensure that all trade signals I send will end up in your (primary) inbox folder you can add my email address to your contacts list.

High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.

Any opinions, news, research, predictions, analyses, prices or other information contained in this newsletter is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

For full disclaimer, please visit following pages: Terms of Service & Privacy Policy.