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Weekly Outlook | Trump’s first days in office to bring clarity
Updated Updated Wed, 2025 January 22 03:29
Important events this week:
Markets might offer an increased amount of volatility this week, when Donald Trump takes office in the US. Due to his potentially protective measures traders should be prepared that markets move into either direction. The Dollar had given back some steam last week but might start to move higher again. In particular inflation figures due to the implementation of fresh tariffs as well as the increase in the federal budget could offer further momentum for the Greenback. Since also the FOMC seems in no rush to cut rates the Greenback might continue to move to higher levels again. In general, the news events this week are not likely to offer high volatility. The focus should be on the above- mentioned developing story from the US.
– CA- Consumer Price Index- Consumerpricesalso in Canada had grown since October last year and data might be in particular interesting this month. Last week, the Canadian Dollar had lost some steam against most other currencies. Monday’s inauguration of President Trump might be of concern, as he insisted to increase tariffs over Canada. This might add pressure on the economy and furthermore cause prices to rise medium term. The USDCAD currency pair currently sits at interesting levels. Based on the monthly chart the market might be ready to move even higher.
Since the 1.4000 resistance zone has been broken to the upside further momentum to higher levels could be seen. An entry might be found above recent highs if the market can break the zone of 1.4470. The data will be published on Tuesday, 23 January at 14:30 CET.
– EU- flash PMI data- The economy inGermany is still lagging behind and recent purchasing manager indices support this view. Despite the services sector being in good shape, with also this index above the 50- mark, the manufacturing industry continues to show negative momentum. In general, energy prices remain high as the government has implement the shift to renewables. Also, corporate expenses for bureaucracy leading to weaker figures.
The weekly chart in the EURJPY currency pair might offer some fresh downside then. Having fallen below the 50- moving average again, prices might continue to fade in favor of the Yen. The market started to trade below the 50- moving average again with clear resistance being found. Only a break of the 165.00 resistance zone might offer a bullish breakout to the upside again. Fundamental issues should not be ignored from Japan but initial downside momentum might occur. The PMI data will take place on Friday, 24 January at 09:30 CET.
