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Weekly Outlook | Weaker Dollar ahead of important rate decisions
Updated Updated Tue, 2025 January 28 01:19
Important events this week:
Last week the Dollar continued its decline. Most other currencies geared up steam against the Greenback and further downside might occur. Important to note that equities continue to be well- bid. Oil prices have started being under pressure again and with Trump’s return to an increase the output of fossil fuels this trend might continue. Meanwhile the run in gold prices continues. The push to higher levels might indicate potential cracks in the stock market medium term.
– CA interest rate decision– It is widely expected that the Bank of Canada willcut rates as they have done in the past few meetings. The expectation in itself might not weaken the Dollar. However, the Loonie has been losing steam against most other currencies.
The weekly chart of the EURCAD currency pair shows, that more upside momentum might follow soon. The recent break of the psychological 1.5000 zone could unleash further upside potential as well. Since the 1.5150 zone being in reach a break might also ignite more upside momentum soon. Should the strength of the EUR continue now the 1.5150 area might also be tested soon. The interest rate decision from Canada will be held on the 29rd January, 2025, at 15:45 CET.
– US interest rate decision – This week won’t be complete with yet another important interest rate decision. The FED is also going to decide upon their interest rate moving forward. In light of recent rather rising inflation data one might wonder if a rate increase might be on the table.
That aside if we focus on the daily chart above the EURUSD currency pair seems to continue its upward trend. Not only has the market broken the 50- moving average at the 1.0460 zone but also shows strong momentum as per the recent candlesticks. This might hence lead to further potential. The currency pair might be on track towards the next resistance zone at 1,0650. The interest rate decision from the US will be held on the 29rd January, 2025, at 20:00 CET.
– EU interest rate decision – As we stated above the EUR has been in a positive trend in recent trading days. The ECB is expected to cut rates this month after their last meeting in December. Recent employment data show that the economic sentiment in the Eurozone seems to pick up slight momentum. Yet also inflation data has grown in November last year compared to the December figure but overall, the trend is still showing a slowdown. In general, this might point to the Euro rising against its peers for now.
The weekly chart in the EURUSD currency pair above shows that a break of the psychological level of 1.0500 might unleash fresh upside potential. Corrections might offer cheap entry opportunities. The interest rate decision in the EU will be held on the 30rd January, 2025, at 14:15 CET.
