Forex Weekly Wrap Up – January 19-23 2009
Weekly Forex Forecasts

Forex Weekly Wrap Up – January 19-23 2009

This was a wild week in forex trading: A strong dollar with Obama’s inauguration, the huge fall of the British pound, rumors of BOJ intervention to weken the Yen and lots of data from Canada. Here’s a wrap up of the major events in the forex market this week.

Forex trading began this week with the end of the Gaza war. The ceasefire declared by Israel was followed by Hamas. This shifted focus from oil prices during most of the week. A renewed surge in oil prices began on Friday, lifting the Canadian dollar.

The main event of this week was the inauguration of Barack Obama as the President of the USA. His optimism affected the US dollar, that made gains almost everywhere. It strengthened despite bad economic data. The high hopes that Obama’s stimulus plan will revive the American economy gave the dollar back wind.

The dollar weakened only against the Japanese Yen. USD/JPY is now at 88.70,  after hitting a 13 year low at around 87. The strong Yen is alarming for the BOJ, that might intervene to weaken the Yen, or at least hint it. Also GBP/JPY made a sharp move, falling as low as 118.84. Currently it’s above 122.

The British pound was heavily beaten during the week. It began with fears about the banking system being nationalized, continued with talks about a British bailout plan for the banks, and ended with the official statement that Britain is in recession, and even deeper than expected.  

GBP/USD fell to 23 year lows, at 1.3505, before closing the week at 1.3790. GBP/USD parity  cannot be dismissed.  The pound also lost ground to the Euro. EUR/GBP at 0.9388. EUR/GBP parity  isn’t near, due to Euro weakness, but it’s getting closer.

The Eurozone saw some good economic data this week, but bowed  before the US dollar. EUR/USD fell under 1.30, as low as 1.2768, before getting back to 1.2980.

The  ZEW Economic Sentiment, especially in Germany was better than expected. Also the  Flash Manufacturing PMI and  Flash Services PMI figures were better than expected. Europe shows some stability.

Another notable currency this week is the Canadian dollar. As aforementioned, oil prices took it back up at the end of the week. But during the week, USD/CAD went against the Canadian dollar: the rate was cut by 0.5% to 1%.

In addition,  Core Retail Sales,  Retail Sales, Core CPI and CPI were all below expectations in Canada. USD/CAD finished the week at 1.23, despite all this data. The power of oil prices is strong…

Unfortunately, forex trading news and moves consumed most of my week, and I didn’t have enough time to research Forex Autopilot Systems. At least I found an open source forex autopilot system, which is quite interesting. Hopefully I’ll write more on forex software issues next week.

Have a great weekend!

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.