The Week Ahead – Earnings Set to Eclipse 2023 – Orbex Forex Trading Blog

EURUSD preparing for another downturn

The euro gears up for another downturn as US inflation holds steady. Inflation effectively decelerated in the Eurozone in December, which gave policymakers some relief. As the ECB reassesses the tightening schedule, this could ease pressures that have triggered expectations. The economic fundamentals keep the recession at bay for now. However, it will be a long year ahead for the euro. The pair is to test 1.08 with 1.0745 a fresh support and a possible move towards 1.07.

USDCAD pushing for resistance

The Canadian dollar steadies as the market looks for any further hikes from the BoC. With retail sales falling back into negative territory, price action favours the greenback with the currency pair. Inflation eased more than expected in December thanks to lower oil prices. Economists expect the central bank to be near its peak rate. With a soft landing expected in America, the same can’t be said for Canada now. The pair is testing the floor at 1.3440 with another swing back to 1.36 more likely.

UKOIL remains consolidated

Brent crude kept the sideways trend going as price action tests the 80 region again. Weak data out of the top consumers kept pressure on market sentiment. Even though China’s GDP grew in 2023, economic strains are still prowling as the growth data remains unreliable. Disappointing US manufacturing output raises concerns of a hard-pushed soft landing. The price is hovering between 75.00 and 80.00, with a break at the latter being a possible shift in momentum towards 85.00.

SPX 500 seeking another record

The S&P 500 remains choppy as earnings season is in full swing. The macroenvironment shows decent economic data coupled with hawkish Fed comments seemingly propelling the index. With a terminal rate looking likely, all eyes will be on the upcoming FOMC to see if rates will stay higher for longer. The index is pushing once again to record highs after meeting heavy resistance last time around. With 4800 being the psychological target to break, can decent earnings run finally break the trend?

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