Euro started the week almost unchanged at 1.0831, but there are some events that will affect the price of the common currency. On the macroeconomic data, I expect to see some improvement in German CPI and the Zew surveys.
Investors will follow the speakers at the World Economic Forum in Davos including ECB President Lagarde.
Most analysts are now bullish on the euro, amid an improvement in the energy crisis, the speculation for higher interest rates in the region and the reopening of China.
Recent data left room for an improvement in sentiment and bets that EA might avoid recession. That is not what I expect, negative growth might show up at the end of the first quarter and more confident that will emerge in the second quarter, as the rising rates will continue to pressure the countries of the South, and Germany exports slow down.
On the EURUSD weekly chart, the pair has formed strong support at the 50-week moving average which tested successfully two weeks ago, leaving room for more upside. Major resistance stands at the 100-week MA around 1.1093.
On the flip side first support is at 1.036 the low from the previous week. If bears break that level then we might see an atempt towards 1.0460 the 50-week SMA.
Tuesday, January 17
Investors’ focus will be on the jobs number from the UK and the ZEW Sentiment Index in Germany with expectations at -15 for January, the previous reading was at -23.3.
Here are the main releases for Tuesday:
09:00 AM DE Inflation Rate YoY Final DEC 10% 8.6% 8.6%
09:00 AM DE Inflation Rate MoM Final DEC -0.5% -0.8% -0.8%
09:00 AM DE CPI DEC 121.6 120.6
09:00 AM DE Harmonised Inflation Rate MoM Final DEC 0% -1.2% -1.2%
09:00 AM DE Harmonised Inflation Rate YoY Final DEC 11.3% 9.6% 9.6%
10:00 AM EA ECB Fernandez-Bollo Speech
12:00 PM EA ZEW Economic Sentiment Index JAN -23.6 -17
12:00 PM DE ZEW Economic Sentiment Index JAN -23.3 -15 -16
12:00 PM DE ZEW Current Conditions JAN -61.4 -58.3 -60
EU ECOFIN Meeting
Wednesday, January 18
09:00 AM EU New Car Registrations YoY DEC 16.3% 11.2%
12:00 PM EA Inflation Rate YoY Final DEC 10.1% 9.2% 9.2%
12:00 PM EA Inflation Rate MoM Final DEC -0.1% -0.3% 0.1%
12:00 PM EA Construction Output YoY NOV 2.2% 2.7%
12:00 PM EA CPI Final DEC 120.95 121.2
12:00 PM EA Core Inflation Rate YoY Final DEC 5% 5.2% 5.2%
12:30 PM DE 30-Year Bund Auction 1.94%
Thursday, January 19
12:30 PM EA ECB President Lagarde Speech
01:00 PM FR 10-Year Index-Linked OAT Auction -0.05%
02:30 PM EA ECB Monetary Policy Meeting Accounts
07:00 PM EA ECB Schnabel Speech
Friday, January 20
09:00 AM DE PPI MoM DEC -3.9% -1.2% -1.8%
09:00 AM DE PPI YoY DEC 28.2% 20.8% 19.9%
11:00 AM DE Bundesbank Nagel Speech
12:00 PM EA ECB President Lagarde Speech
05:30 PM EA ECB Elderson Speech
05:00 PM EA Consumer Confidence Flash JAN -22.2
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).
