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Important Economic Events and News of the week

Here are some important market events of the week, that may impact the price trends significantly.

UK Monthly PMI

The monthly PMI’s from the UK covering the construction and services sector will be released this week.

Economists forecast that construction PMI fell to 52.6 in January, down from 52.8 in the month before.

The services sector activity is expected to remain muted at 51.1, slightly down from 51.2 seen in the month before.

The data comes as last week’s manufacturing PMI showed that the UK’s manufacturing activity fell to 52.8.

New Zealand Unemployment Figures

New Zealand will be releasing its quarter unemployment figures this week.

Data is forecast to show that the quarterly employment change increased 0.3% on the fourth quarter of 2018.

New Zealand’s unemployment rate is forecast to rise 4.1% in the fourth quarter of the year following a decline to 3.9% in the second quarter.

UK Monetary Policy Meeting

The Bank of England will be holding its monetary policy meeting this week on Thursday.

The central bank is expected to hold interest rates unchanged at this week’s meeting.

Policy makers are however expected to come out with hawkish forward guidance with the recent rise in wage growth and a fall in inflation.

U.S. advance GDP report

The U.S. advance GDP report will be coming out this week.

The data covers the fourth quarter GDP period ending December 2018.

The fourth quarter GDP is expected to ease to a pace of 2.6% in the fourth quarter.

This marks a slowdown in the GDP activity for the second consecutive quarter of the year.

The data is later followed by retail sales which is expected to show a 0.1% increase on the month ending December.

Australia Monetary Policy Meeting

The Reserve Bank of Australia will be holding its meeting this week.

The RBA is expected to keep interest rates unchanged at this week’s meeting.

The central bank is however expected to acknowledge the uptick in the unemployment figures which saw the unemployment rate in Australia falling to 5.0%.

However, wage growth has remained broadly subdued.

Gold Technical Analysis & Current Trend

Gold prices maintained strong gains last week as price action posted gains and pushed the price of the precious metal to fresh highs.

Gold prices tested highs of 1326 last week before easing back to close lower by Friday.

The gains came amid dovish central bank policy messages.

Gold prices are seen currently trading near the resistance level of 1321 and 1315 levels.

This marks a strong hidden bearish divergence on the daily chart as signaled by the Stochastics oscillator.

This potentially indicates that gold prices could be looking to post a correction in the near term.

Unless there is a breakout above 1321 level, we expect gold prices to retest the 1280 level where support is likely to be retested again.

The test of the 1280 level will remain key.

As long as the support holds, gold prices are expected to remain range bound within the current levels.

However, there is a risk that gold prices could break the support level at 1280 and push lower.

In the near term, watch for gold prices to post a decline.

The initial downside target is seen at 1280.

At the initial test of this support, gold could potentially rebound off the support and turn flat within the said levels.

However, a break down below 1280 could accelerate the declines down to the 1233.50 level where support is pending a firmer retest.

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