FXR Team

This week will likely have a slow start, with the US out for Martin Luther King Day on Monday. But later on Monday things will pick up as UK/EU Brexit negotiations are likely to (re)start after May’s latest defeat. May is due in parliament on Monday to reveal her plan on how to proceed. However, on Friday, EU leaders were in 'disbelief' after Theresa May Presented Unchanged Brexit Demands. I still think No Deal is an increasingly likely option.

In other news, the annual conference in Davos will be dull with very few influential leaders attending.

Themes for the Week:

  • Brexit: PM May will unveil plan B (if there is one) and Parliament will have to vote on it before Jan 29th. GBP has been rising as chances of "No Deal" seemed to be disappearing, but unless a deal is reached, there's always 2-way risk on the Pound. Expect more volatility this week.
  • ECB decision:  Draghi is unlikely to change his stance this week, as EU data has been weak and the slowdown could last longer than anticipated.
  • China Slowdown? The coming days will show whether China’s run of weak economic data continues as it releases fourth quarter growth numbers as well as investment and retail sales for December. .
  • The US shutdown: there have been no immediate signs of a resolution and we still have no indication of when the delayed BEA and Census Bureau data will eventually be released.

Data in the Week ahead:

  • China GDP
  • UK Employment Data
  • BOJ Decision
  • Cad Retail Sales
  • AUD Employment Data
  • ECB Decision

On the Radar:

It's still slim pickings for trend-following strategies since there has been very little trendiness in 2019 thus far. So going into the week the only things that look interesting based on Friday's close are: Crude Oil (long), Dax  (tentative longs, low convinction), NzdCad (short), EurUsd (short).

About the Author

Justin is a Forex trader and Coach. He is co-owner of www.fxrenew.com, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial), or get FREE access to the Advanced Forex Course for Smart Traders. If you like his writing you can subscribe to the newsletter for free.