The US retail sales were a disappointment reflecting the rising number of Covid infections. The core retails sales number was confirmed at -1.4% and the headline number came in at -0.7%. Analyst consensus had expected to see better numbers, -0.1% and -0.0% respectively. Negative retail numbers didn’t register with the traders and USD kept on strengthening in Friday’s trading. China reported better than expected GDP growth today (6.5% vs. 6.2% expected). Economic growth in China is supportive of AUDUSD which is often used as a proxy for trading Chinese economic development. While today and tomorrow are quiet when it comes to significant risk events, the rest of the week is going to be busy with multiple significant or highly significant macroeconomic data releases. BOC rate decision and press conference are scheduled to Wednesday and tentatively a speech from the President-Elect Joe Biden. On Thursday we will have Australian employment numbers and possibly also the BOJ monetary policy statement during the Asian session, and then the ECB rate decision and press conference during the European session. Philly Fed manufacturing index and US unemployment claims will be released during the US session. We’ll also have the BOE Bailey speaking again the same night European time and later on inflation numbers from New Zealand. Friday will be a busy day with PMI numbers that have recently been significant market movers. As usual, we are once again very likely treated with trade opportunities created by PMI numbers from France, Germany, EU, UK, Canada and US. As mentioned, today’s calendar has only one significant event ahead, a speech from the BOE governor Bailey. See our economic calendar for times and details. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

USDJPY hit our first target zone last week and now the pair is consolidating. See the latest video here. Japanese Yen is the only currency that bucks the trend against the greenback. While others are losing ground JPY is moving sideways. This relative strength in JPY against the dollar and the fact that the USD is gaining ground against all the other major currencies is a sign of risk aversion but it also tells us that the short USD trade was (and might still be) quite crowded. USDJPY has again moved back to our first target zone. The pair has been making higher lows and lower highs which means it is trading inside a triangle. Projections based on triangle width suggest that after a break USDJPY should move either to 102.90 – 103 on the downside or roughly to 104.76 on the upside. The key support and resistance levels for near-term trading are 102.95, 103.52, 104.19 and 104.400. Open a VIP Black account with us. There are no per trade execution or monthly fees on our VIP Black accounts.

Recent macroeconomic data releases

  • US Average Hourly Earnings 0.8%, 0.2% expected
  • US Non-Farm Employment Change -140K, 60K expected
  • US Unemployment Rate 6.7%, 6.8% expected
  • US CPI 0.4%, 0.4% expected
  • US Core CPI 0.1%, 0.1% expected
  • US Core Retail Sales -1.4%, -0.1% expected
  • US Retail Sales -0.7%, 0.0% expected

Important macroeconomic data releases this week

  • Chinese GDP 6.5%, 6.2% expected
  • BOE Governor Bailey Speaks

You may access the times and dates in the economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst
TIOmarkets.com

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