The EUR/USD currency pair may grow in the medium term, according to our technical and fundamental analysis. A possible scenario is that the price may break the range to the upside and then continue moving upwards to reach 1.2500.
The most important data about the EUR this week will be the Euro Zone GDP QoQ (+0.6% expected; unchanged previously); MoM (+2.7% expected; unchanged previously), on Wednesday.
There are also expected important data from the USA: US CPI YoY (expected+1.9% ; +2.1% previous), and US retail sales MoM (expected +0.2%; +0.4 previous). On Thursday, will be released US PPI MoM (+0.4% expected; -0.1% previous), and US YoY (expected +2.5%; +2.6 previous).
Recently the economy of the Euro area has gone from strength to strength and it is expected to continue to do so, according to the most of the analysts.
The main event of the week ahead is the ECB Council Meeting, on January 25. The big question is whether President Draghi will attempt to dial back market expectations around an actual shift in interest rate policy. Ahead of the ECB meeting, we have the preliminary Eurozone 'flash' PMI surveys on Wednesday. Manufacturing reached a survey history high of 60.6 in December and is forecast to moderate to 60.3 in January.
According to the technical analysis, the EUR/USD currency pair might go up to 1.2400 for the next period. The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis might remain unchanged or might be on a slight rise (+3.3 expectation; +3.2% previous).
According to recent data, the Canadian economy is performing well at the moment. Canada had solid economic growth of 3.1% in 2017 and this growth is expected to continue in 2018. The labour market has been thriving, adding 343,000 jobs. While the growth of the Canadian economy is expected to slow to about 2.2% in 2018, this is still decent growth.
The USD/CAD pair might fall at 1.2150 in the next three weeks. The most important data about the CAD this week will be the GDP YoY (+3.4% expected; +3.4% previous); MoM (+0.4% expected; unchanged previously), on Wednesday. On Friday, there are also expected positive data from the USA: NFP (expected+180k ; +148k previous); unemployment rate (expected +4.1% ; +4.1% previous).