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After a slow start to the week due to Martin Luther King’s day, we have quite a busy schedule: an important British release every day, with employment numbers being the peak, a rate decision in Canada, Chinese GDP, American housing figures and lots more. Let’s see what’s awaiting us in the third week of January.

Apart from the majors, I’ll be watching EUR/GBP after its breakout.

Monday, January 18th: It’s Martin Luther King Day in the US – this means that trading volume will be weak and the calendar uncrowded. The only notable major event is a speech by BOJ Governor Masaaki Shirakawa.

Tuesday, January 19th: British CPI is expected to continue rising, pushing the Pound higher. Core CPI is also predicted to rise.

In Europe, the German ZEW Economic Sentiment is expected to remain almost unchanged. Last month’s drop in the ZEW Economic Sentiment sent the Euro down.

The Bank of Canada makes a rate decision that isn’t expected to move the Overnight Rate  from the low level of 0.25%. But since many Canadian indicators are improving, including inflation, Mark Carney could change the BOC Rate Statement and talk about a rate hike sooner than the current expectations – June 2010.

In the US, TIC Long-Term Purchases are expected to rise, showing confidence in the dollar. This major indicator show the flow of cash in or out of the US.

New Zealand’s quarterly CPI is predicted to remain unchanged, hurting the current run of NZD/USD.

Wednesday, January 20th: British Claimant Count Change is expected to remain unchanged, after dropping last month. The rise last month was the first in a long time – a turnaround. Also note the British Unemployment Rate, which is a late but important release.

British MPC Meeting Minutes are also important for the Pound. The money is running out of the British Quantitative Easing program, as mentioned int the rate decision. Cautious recovery will probably be heard there.

Canadian CPI is expected to rise very slowly, after a nice rise last month.

In the US, two housing figures aren’t expected to move: Building Permits and Housing Starts are expected to remain unchanged. American PPI is expected to ease after rising lat month.

In New Zealand, Retail Sales are expected to rise in a faster pace than last month.

Thursday, January 21st: Chinese news have a growing impact on forex trading. Chinese GDP is expected to show a strong 10.5% growth rate, much higher than last quarter. Also note Chinese Industrial Production. Both figures have a strong impact on the Aussie, which enjoys strong employment numbers.

In Britain, CBI Industrial Order Expectations are expected to improve, while Public Sector Net Borrowing isn’t expected to move.

After the disappointing NFP, US Unemployment Claims have bounced off the bottom, and are expected to remain unchanged at 444K. The Philly Fed Manufacturing Index which has leaped in the past two months is predicted to drop to 18.3 points.

Friday, January 22nd: Purchasing managers’ indices from Europe will pour in – first in France, then in Germany and then for the whole continent. Most of the number are predicted to improve.

British Retail Sales are expected to rise by 1.4% after a drop last month. Also Canada releases retail sales which are expected to rise by 0.3%, less than last month.

That’s it for the major events of the week. I’ll later post specific currency coverages.

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