Weekly Market Watch

Released 10 January 2017 - Weekly Newsletter

Last week recap



Showed little change last week as both economies reported mixed economic numbers, while FOMC members indicated the Fed could possibly hike interest rates two times, and maybe three this year. The week began with the pair losing ground on Monday despite Spanish Manufacturing PMI, which showed a reading of 55.3 compared to an expected print of 54.6. The rate continued lower, making its weekly low of 1.0339 on Tuesday after U.S. ISM Manufacturing PMI printed at 54.7 versus the 53.7 that was expected. Also, German Preliminary CPI increased +0.7% m/m versus a previous reading of +0.1%, and German Unemployment Change, which showed a decline of -17K versus an expected decline of -5K. The rate then gained ground on Wednesday after EZ CPI Flash Estimate increased by +1.1% y/y, just slightly higher than the expectation of +1.0%, while the Core CPI Flash Estimate increased by +0.9% y/y versus +0.8% anticipated. On Thursday, the pair continued rallying after U.S. ADP Non-Farm Employment Change disappointed the market at 153K compared to an expectation of 171K. Nevertheless, U.S. Initial Jobless Claims dropped to 235K compared to an expected 262K, and the ISM Non-Manufacturing PMI survey printed at 57.2 versus an expected reading of 56.6, limited the pairs upside. The rate then lost ground on Friday after making its weekly high of 1.0621 after U.S. Non-Farm Payrolls showed a disappointing 156K new jobs compared to the expected 175K, while the U.S. Trade Balance came out showing an expanding deficit of -45.2B compared to the expected -42.2B, nevertheless, U.S. Average Hourly Earnings increased by +0.4% m/m versus +0.3% expected. Also pressuring the pair were German Retail Sales, declined by -1.8% m/m compared to the -0.8% that was anticipated. After the market close on Friday, Charles Evans, President of the Chicago Federal Reserve Bank, said that economic conditions in the United States would likely call for two interest rate hikes in 2017, but that a forecast of three hikes is “not implausible”. EUR/USD closed at 1.0530, with an overall gain of +0.2% for the week.



Was virtually unchanged last week as the United States reported mixed economic numbers with no significant economic releases from Japan. The week began on a quiet note, with the pair gaining on Monday as both countries celebrated bank holidays. The rate then made its weekly high of 118.60 on Tuesday after a better than expected U.S. ISM Manufacturing PMI number. On Wednesday, the pair began selling off after the release of the FOMC Meeting Minutes. Thursday saw the rate continue heading south after mixed U.S. employment and PMI data. The pair then made its weekly low of 115.05 on Friday after a disappointing U.S. Non-Farm Payrolls number. USD/JPY closed at 117.00, with a gain of just six pips and virtually unchanged on the week.


Lost a fraction last week as both countries reported mixed economic numbers. Cable began the week on a quiet note, with the pair declining as both countries observed bank holidays. The rate then made its weekly low of 1.2198 on Tuesday after a better than expected U.S. ISM Manufacturing number and despite UK Manufacturing PMI, which came out with a reading of 56.1 compared to the 53.3 print that was expected. On Wednesday, Cable rallied after UK Construction PMI printed at 54.2 versus the 52.6 print that was anticipated, and UK Net Lending to Individuals, which increased +5.1B m/m versus the +4.9B that was expected. Thursday saw the pair extend its gains, making its weekly high of 1.2431 after UK Services PMI printed at 56.2 versus the expectation of 54.8. Cable then fell sharply on Friday despite a lower than expected U.S. Non-Farm Payrolls number. GBP/USD closed at 1.2281, with an overall loss of just -0.3% from its previous weekly close.


Extended its previous week’s gains last week as the United States reported mixed economic numbers with very little significant economic data from Australia. The week began on a quiet note, with the pair gaining after making its weekly low of 0.7193 on Monday as both countries celebrated bank holidays. The rate extended its gains on Tuesday despite a better than expected U.S. ISM Manufacturing PMI number. On Wednesday, the pair continued its rally after the release of the FOMC Meeting Minutes. Thursday saw the rate make its weekly high of 0.7356 after mixed U.S. employment numbers. The pair then sold off on Friday despite the Australian Trade Balance showing a surplus of +1.24B compared to an expected deficit of -0.55B. AUD/USD closed at 0.7294, with a net gain of +1.2% for the week.


Extended its previous week’s losses last week as crude oil extended its rally and Canada reported mostly better than expected economic numbers, with mixed data from the United States. The week began with the pair losing ground on Monday as both countries observed a banking holiday. The rate then made its weekly high of 1.3460 on Tuesday before selling off despite a better than expected U.S. ISM Manufacturing PMI number. The pair continued its slide on Wednesday after the release of the FOMC Meeting Minutes. On Thursday, the rate extended its losses despite Canadian RMPI, which declined -2.0% m/m versus an expectation of a -1.5% decline. Friday saw the pair make its weekly low of 1.3176 after Canadian Employment Change surged to +53.7K, notably higher than the decline of -5.1K that was anticipated, also, the Canadian Trade Balance showed a surplus of +0.5B versus an expected deficit of -1.6B, while Canadian Ivey PMI printed at 60.8 compared to an expectation of 56.0. USD/CAD closed at 1.3234, with an overall weekly decline of -1.5%.



Gained another fraction last week as the United States reported mixed economic data with very few significant economic releases out of New Zealand. The week began with the pair consolidating on Monday as both countries celebrated bank holidays. The rate then made its weekly low of 0.6884 on Tuesday after the New Zealand GDT Price Index declined -3.9% versus a previous reading of -0.5%. On Wednesday, the pair began rallying after the FOMC released its Meeting Minutes. Thursday saw the rate continue gaining after mixed U.S. employment data. The pair then made its weekly high of 0.7043 on Friday before selling off after a lower than expected U.S. Non-Farm Payrolls number. NZD/USD closed at 0.6956, with a gain of +0.4% for the week.

The week ahead

AUD The Australian economic calendar is sparse this coming week, only featuring Building Approvals (4.6%) on Monday, followed on Tuesday by Retail Sales (0.4%). Resistance for AUD/USD is seen at 0.7614/0.7834 and 0.7310/0.7557, with support noted at 0.7222/65, 0.7096/0.7162 and 0.6974/0.7015.

CAD The Canadian economic calendar is rather quiet this coming week, only featuring the BOC Business Outlook Survey on Monday; Building Permits (2.4%) on Tuesday; and the NHPI (0.3%) on Thursday. Resistance for USD/CAD is seen at 1.4001, 1.3464/1.3638 and 1.3312/1.3416, while support shows at 1.3080/1.3177, 1.2923/1.3005 and 1.2821/61.

EUR The Eurozone economic calendar is very quiet this coming week, only featuring the ECB’s Monetary Policy Meeting Accounts on Thursday. Resistance for EUR/USD is seen at 1.0652/1.0964, 1.0620 and 1.0551/68, with support showing at 1.0461/1.0524, 1.0339/1.0419 and 1.0206.

GBP The UK economic calendar is fairly active this coming week, featuring Manufacturing Production data on Wednesday. Monday starts the week’s highlights off with the Halifax HPI (last 0.2%), and Wednesday then offers Manufacturing Production (0.6%) and the Goods Trade Balance (-11.2B). Friday’s highlights then conclude the week with the BOE Credit Conditions Survey and a speech by MPC Member Saunders. Resistance to the topside for GBP/USD shows at 1.2673/1.2864, 1.2511/56 and 1.2301/1.2481, while support for the pair is expected at 1.2199/1.2271, 1.2081/1.2145 and 1.1991.

JPY The Japanese economic calendar is peaceful this coming week, featuring no notable data. Also, Monday is a Bank Holiday in Japan. Resistance for USD/JPY currently shows up at 121.23, 120.47/83 and 117.80/118.65, with support indicated at 116.54/117.19, 115.96/116.07 and 113.79/115.06.

NZD The New Zealand economic calendar is quiet this coming week, featuring no notable data. The chart for NZD/USD shows resistance at 0.7484, 0.7339/0.7420 and 0.6970/0.7238. On the downside, technical support is expected at 0.6930/49, 0.6786/0.6896 and 0.6674.

USD The U.S. economic calendar is busy this coming week, featuring Retail Sales data on Friday. Monday s quiet, so Tuesday starts the week’s highlights off JOLTS Job Openings (5.59M), and Wednesday’s key events include Crude Oil Inventories (last -7.1M). Thursday then offers Weekly Initial Jobless Claims (266K), speeches by FOMC Members Evans and Harker, and Import Prices (0.8%), while Friday’s highlights conclude the week with Fed Chair Yellen, Core Retail Sales (0.5%), PPI (0.1%), Retail Sales (0.5%), Core PPI (0.3%), a speech by FOMC Member Harker and the Preliminary University of Michigan Consumer Sentiment survey (98.6).


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