Below is this week’s market forecast from our trade desk.
FX markets start the week quietly amid the European open, but with the fundamental trends for 2023 unaltered. The news of China’s reopening continues to support emerging market currencies, while demand for the Japanese yen is still high ahead of Wednesday’s BoJ decision. Softer China data this week will put yuan bulls to the test, and UK inflation and labour data will be crucial for GBP.
DXY has recovered from an overnight low of 101.80 in Asia to start the week. Due to a partial market vacation in the US today in observance of Martin Luther King Jr. Day, it’s possible that the choppy trading environment from last week will continue.
The EUR/USD is comfortably trading over 1.09. The World Economic Forum in Davos, where European Central Bank President Christine Lagarde will talk on Friday, maybe the focus in Europe this week. The happenings in Asia this week will likely influence the EUR/USD, as mentioned above. However, we believe that the levels around 1.0900/1.0950 can be the best of the week.
All the team at LTI wishes you a great week. Trade safe.