Weekly Outlook: 2018, January 14 - January 21

The dollar suffered across the board in the second week of 2018. Will it remain under pressure? The upcoming week features housing data and consumer confidence from the US, Chinese GDP, and other market-moving events. Here are the highlights for the upcoming week.

1. UK inflation report: Tuesday, 9:30. Britain stands out among developed countries by suffering from elevated inflation. Year over year CPI surpassed the 3% threshold in the reading for November, above the 1-3% range. Rising inflation has already triggered a rate hike in November, but the BOE seems reluctant to make additional tightening given the uncertainty resulting from Brexit and the slowing economy. Another rise in this important report that concludes 2017 may force the BOE to rethink. A small drop to 3% is expected.
2. Empire State Manufacturing Index: Tuesday, 13:30. A level of 18.5 is predicted.
3. Canadian rate decision: Wednesday, 15:00. The Bank of Canada is expected to raise interest rates for the third time in this cycle, from 1% to 1.25%. In the previous rate decision, it seemed like BOC Governor and his team were in for a long pause after normalizing rates back to 1% in mid-2017. However, recent economic data has been quite impressive: the economy gained some 79K positions in both November and December. The recent BOC Business survey was quite bullish, pointing to rapid expansion. Alongside a significant rise in oil prices, the time seems ripe for tightening by the Ottawa-based institution. A surprise “no-change” will hurt the C$. A rate hike is basically priced in and the response in case of a hike will depend on the prospects for further moves.
4. Australian jobs report: Thursday, 00:30. A modest gain of 15.2K jobs is on the cards. The unemployment rate carries expectations for remaining at 5.4%.
5. Chinese GDP: Thursday, 2:00. A minor slide to 6.7% is forecast.
6. US housing data: Thursday, 13:30. Building permits are projected to slide to 1.29 million while housing starts are predicted to drop to 1.27 million units annualized.
7. Crude Oil Inventories: Thursday, 16:00. With the prices of black gold hitting new highs, this release is important not only for loonie traders but also for the US dollar: there is often an inverse correlation between oil prices and the greenback.
8. US consumer sentiment: Friday, 15:00. A score of 97.2 is expected.

the source

EUR/USD had an excellent week that saw more volatility than the prior week with the pair hitting the highest levels in over three years. Is there more to come? Final inflation figures stand out in the week before the ECB decision. Here is an outlook for the highlights of this week.

1. Trade Balance: Monday, 10:00. The euro-zone enjoys a wide trade surplus thanks to Germany’s robust exports. This surplus stood at 19 billion euros in October and could rise now, as we already know that Germany saw a wider surplus in November and despite France’s wider deficit. A surplus of 22.4 billion is on the cards.
2. German Final CPI: Tuesday, 7:00. The initial read for December showed a monthly rise of 0.6% in prices in Europe’s largest economy. The final read will likely confirm the initial read.
3. CPI (Final): Wednesday, 10:00. The flash estimate of euro-zone CPI showed an OK figure on the headline: 1.4% y/y, in line with expectations. However, core inflation remained at 0.9%, below 1%, for the third consecutive month, showing that underlying inflation is still poor. The final read will likely confirm the initial estimate.
4. Jens Weidmann speaks Thursday, 8:!5. The president of the German Bundesbank will make another public appearance. Will he provide a hint about an announcement about the end of QE? We know that he is a hawk, so making dovish remarks could have a bigger impact than hawkish ones. Nevertheless, his words could move markets.
5. German PPI: Friday, 10:00. Producer prices missed in November by rising by only 0.1%, breaking a streak of figures coming out ahead of forecasts. Inflation in the pipeline, as reflected by PPI, still seems stronger than CPI. A rise of 0.2% is expected.
6. Current Account: Friday, 10:00. Similar to the narrower trade balance figure, the wider current account measure is in a significant surplus. The figure for October was relatively low, with 30.3 billion, a miss on estimates. We could see a higher number in the read for November. A surplus of 31.3 billion is predicted.

the source

The euro fell during European trading in most of the major currencies as a number of data were issued, the most important of which was Germany's inflation, which hit its highest level in ten years in addition to the differences in the budget and the tensions with the rest of the Union

The sell metatrader 4 signals will be cancelled when there is a breakout at the black line. That resistance has been connecting the most important lower highs since April. The chances of that are rather slim.