Weekly Forex Outlook: December 31-January 4

What opportunities the week will give us?

The first week of the new year won’t bring a lot of economic events. However, it still will be a chance to trade.

Please remember that markets will be closed on January 1.

On Thursday, January 3, US ISM Manufacturing PMI data will determine the direction of the USD.

The first Friday of the month, as usual, will be highlighted with the Non-Farm Payrolls data. Greater than anticipated figures will boost the USD and affect the direction of currencies paired with the US dollar.

Canadian jobs data will be out on Friday as well. Greater employment change and the weaker unemployment rate will support the Canadian dollar.

Also on Friday, traders will pay attention to the speech of the Fed Chairman Mr. Powell. The hawkish mood of Mr. Powell will encourage USD bulls, the cautious tone will pull the USD down.

Let’s have a look at the technical side.

Will EUR/USD leave the sideways channel in 2019? If you take a look at the weekly chart of EUR/USD, you will see that the pair had been trading in the horizontal channel since the end of October 2018. It seems like the pair has a chance to leave the channel. If the USD keeps suffering during the first week of the year, the pair will rise to 1.1610. A test of this level will strengthen the uptrend. If the USD is strong, the pair may break the channel but in the opposite direction, the next support is at 1.1120.

Will GBP/USD recover after the bad 2018?

The GBP/USD pair keeps suffering because of the Brexit uncertainties. On the weekly chart, the downtrend prevails. However, the pair has chances to rise. If there is positive news on the Brexit deal and the USD is not that strong, the pair will be able to break above the trendline. This breakthrough will signal the strength of the GBP. If the GBP is not supported, risks of the fall towards 1.2364 will increase.

How strong is the uptrend of USD/CAD?

The USD/CAD pair keeps rising. If the USD is strong during the first days of the year, the pair will keep rising. The first resistance is at 1.3769. However, technical indicators signal a soon reversal. As a result, the pair may weaken. The first support is at 1.3387.

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