Upcoming US GDP Data Impact on Forex Volatility – 27 Jan 2025

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As we head into Monday, January 27, 2025, global markets are bracing for a week dominated by key U.S. economic events. Market participants are particularly focused on upcoming GDP data and durable goods orders, which are likely to shape sentiment around the U.S. dollar. Following last week’s volatile sessions, attention remains on the Federal Reserve’s monetary policy outlook amidst continued inflationary concerns.

USD/CAD

Technicals in Focus

The USD/CAD pair experienced notable downside pressure last Friday, dropping below the 1.4350 level as Canadian data, including Wholesale Sales, indicated relative weakness in domestic demand. The pair tested support near 1.4315 before stabilizing. On the technical front, the MACD shows a deepening bearish divergence, while the Stochastic Oscillator has entered oversold territory, signaling a potential correction to the upside. RSI hovers near 30, reflecting bearish momentum.

Trading Strategy: Neutral to Sell

Sell below 1.4350, targeting 1.4310–1.4280, with a stop loss above 1.4380. Alternatively, consider buying above 1.4380, targeting 1.4410–1.4430, with stops below 1.4340.

EUR/USD

Technicals in Focus

EUR/USD gained momentum, breaking through the 1.0485 resistance on Friday after U.S. economic indicators hinted at moderating growth. The pair tested highs near 1.0515 before consolidating. On the technical side, MACD suggests strengthening bullish momentum, and the RSI at 60 supports continued upside potential. The Stochastic Oscillator is moving into overbought levels, suggesting caution for further gains.

Trading Strategy: Neutral to Buy

Buy above 1.0500, targeting 1.0530–1.0550, with a stop loss below 1.0480. Alternatively, consider selling below 1.0480, targeting 1.0450–1.0430, with stops above 1.0510.

USD/JPY

Technicals in Focus

USD/JPY posted a mixed session last Friday, oscillating around the 155.80 level as traders digested Japan’s Tokyo Core CPI data alongside anticipation of U.S. GDP results. The pair managed to recover from a low near 155.20 to trade above 155.90. Technical indicators remain mixed; MACD is neutral, while the RSI at 45 suggests a lack of clear directional bias.

Trading Strategy: Neutral

Buy above 156.00, targeting 156.30–156.50, with a stop loss below 155.70. Alternatively, sell below 155.60, targeting 155.30–155.00, with stops above 156.00.

Market Outlook

Looking ahead, the spotlight will be on the U.S. GDP (QoQ) and Durable Goods Orders data, which are expected to provide further clarity on the U.S. economic trajectory. Strong GDP figures could bolster the dollar, while weaker readings may intensify discussions of a potential policy shift from the Federal Reserve.

Additionally, the Canadian GDP report later in the week will also weigh on USD/CAD movements, as market participants assess the divergence between U.S. and Canadian economic trends.

Overall, heightened volatility is expected as traders react to these major economic releases, positioning themselves for the next directional move in the dollar and related currency pairs.

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