Eurozone GDP Data and Its Impact on Trends – 28 January 2025

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As we move into Tuesday, January 28, 2025, the global forex market is poised for heightened volatility as traders react to a series of critical U.S. economic data releases. The Core Durable Goods Orders (MoM), CB Consumer Confidence, and Atlanta Fed GDPNow updates are likely to dominate market sentiment. These reports will provide insights into the state of the U.S. economy and the Federal Reserve’s monetary policy direction. Meanwhile, Japan’s Core CPI figures and Australia’s CPI data remain focal points for their respective currencies.

In the currency markets, the EUR/USD pair displayed resilience as traders balanced mixed signals from the Eurozone and the U.S. The USD/CAD saw significant swings as oil price volatility influenced the Canadian dollar. Meanwhile, the USD/JPY declined amid heightened volatility, reflecting the market’s sensitivity to Japanese inflation data and overall risk sentiment.

EUR/USD

Technicals in Focus

The EUR/USD pair hovered near 1.0505 after showing a choppy trading session. The pair’s movements reflected cautious sentiment ahead of key U.S. data releases.

  • MACD Indicator: Indicating a bullish bias as momentum strengthens.
  • Stochastic Oscillator: Approaching overbought territory, signaling possible consolidation.
  • 14-day RSI: Neutral, suggesting a balanced sentiment.

Trading Strategy: Neutral to Buy

  • Buy above 1.0510 with targets at 1.0540-1.0560 and 1.0590-1.0620, with a stop loss below 1.0480.
  • Alternatively, consider selling below 1.0480 with targets at 1.0450-1.0420, with stops above 1.0510.

USD/CAD

Technicals in Focus

The USD/CAD pair traded near 1.4385 after experiencing notable swings influenced by fluctuating oil prices and mixed U.S. housing data.

  • MACD Indicator: Trending lower, reflecting bearish momentum.
  • Stochastic Oscillator: Moving out of oversold territory, indicating potential corrective upside.
  • 14-day RSI: Neutral, suggesting no clear directional bias.

Trading Strategy: Neutral to Sell

  • Sell below 1.4380 with targets at 1.4350-1.4320 and 1.4280-1.4260, with a stop loss above 1.4410.
  • Alternatively, consider buying above 1.4410 with targets at 1.4440-1.4470, with stops below 1.4380.

USD/JPY

Technicals in Focus

The USD/JPY pair fell sharply to 154.45, reflecting strong yen demand amid concerns over U.S. growth and Japanese inflation data.

  • MACD Indicator: Bearish crossover, signaling strong downward momentum.
  • Stochastic Oscillator: Exiting oversold territory, hinting at a potential corrective bounce.
  • 14-day RSI: Slightly bearish, supporting near-term downside pressure.

Trading Strategy: Neutral to Sell

  • Sell below 154.40 with targets at 154.00-153.70 and 153.40-153.10, with a stop loss above 154.80.
  • Alternatively, consider buying above 154.80 with targets at 155.10-155.50, with stops below 154.40.

Market Outlook

The market’s focus will center on U.S. Core Durable Goods Orders and CB Consumer Confidence data for insights into consumer and business spending trends. The Atlanta Fed GDPNow update is also anticipated to shed light on U.S. growth prospects, potentially setting the tone for the Federal Reserve’s next policy moves. Japan’s Core CPI results are expected to shape sentiment for the yen, especially given ongoing speculation around the Bank of Japan’s policy changes.

Overall, the session is expected to bring increased volatility as traders adjust positions based on fresh economic insights. As always, risk management will be crucial amid rapid market movements.

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