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#1 12-01-2021 09:01:29

johnedward
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From: Paris - France
Registered: 21-12-2009
Posts: 3069
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EUR/USD: events to watch out for this week

EUR/USD: events to watch out for this week


Welcome to the first trading week of the new year. Not that the markets were closed last week, but many market participants took a break and so market movements tended to be tricky.

Think of the EUR/USD pair. It opened 2021 with a higher spread and was literally bought at every low. However, by the end of the week it fell back to where it started, proving once again that the market was very tight and very liquid.

This week is different. Powell, the Chairman of the US Federal Reserve, and Lagarde, the President of the European Central Bank, are both due to speak this week, so the volatility of the EUR and USD pairs will be affected.

CPI and U.S. retail sales - Key economic data this week

This week's price action is centred on the US dollar. The dollar began 2021 just as 2020 ended - on a bearish trend. However, recent price movements in some assets, particularly gold and Bitcoin, suggest that the trend may change. For example, Bitcoin fell almost 20% after reaching $40K, while gold traded lower to end the previous week.

Tomorrow, the CPI (consumer price index) has the potential to move the markets. The core CPI, which does not include volatile energy prices, is expected to remain stable at 0.2%, while the total CPI is expected to rise from 0.2% to 0.4%. Any deviation from expected values should trigger some movement in the dollar.

Friday's retail sales will end the trading week. Core Retail Sales declined the previous month, and this week's release is expected to be -0.1%. We may see some upside surprises in this area, as the U.S. implements new stimulus measures for households.

In addition to the economic data, any news about the vaccine efforts underway around the world has the potential to move the markets as well. Critics argue that governments have not been sufficiently prepared to administer the vaccines and that many countries have not used the vaccines they have already received. It turns out that people are ready to be vaccinated because vaccines seems to be the only way to win the fight against the virus.

Overall, a volatile week is to be expected, as positioning for the coming year is expected to dominate price action.

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