Weekly Market Analysis: 25 - 29 January 2021

Weekly market analysis 25 - 29 January 2021 will discuss for a week things that can affect the forex market such as, According to economists, the movement of the US Dollar currency stopped strengthening against other major currencies that had been experienced for 2 weeks, but is expected to find support for strengthening again for the next few months, before continuing its weakening trend lower. The greenback is predicted to weaken, the impact of the increase in bond yields turned out to be only temporary, with interest rate increases expected to still not be carried out by the American central bank due to the Covid-19 stimulus package policy for a long period of time. Economic activity in the European zone declined sharply in January, the impact of a strict lockdown to limit the spread of the Corona virus which has hit the dominant industrial and service sectors in the European zone bloc. Meanwhile, the UK economic data released for purchasing power at the UK retail level is still negative. British PM "Boris Johnson" also said last Friday that there was clear evidence that the new variant of Covid-19 that had been discovered at the end of 2020 could be associated with higher death rates. On the other hand, the proposed stimulus package has not yet received approval from Congress even though the Democratic Party already controls the majority of the House of Representatives and the Senate. The effect of this uncertainty is what caused market players to sell off safe haven assets, namely Gold, last Friday. In contrast, the mass vaccination that has begun will provide hope for economic recovery and an increase in inflation, which the Fed hopes will potentially limit the stimulus package in the future. Meanwhile, oil prices ended down at the end of the session last Friday, due to pressure from reports regarding crude oil reserves in the United States. Oil reserves in Uncle Sam's country showed an increase in reserves of 4.4 million barrels, as well as the still high number of new cases of Covid-19 in a number of countries. According to Goldman Sachs Inc's prediction, the initial steps taken by the administration of US President Joe Biden will be able to help boost the oil market this year and next year. Oil prices have been rising since the end of 2020, due to the start of the distribution of the Corona vaccine around the world which has pushed oil prices to their highest levels in months, as investors digest that with the distribution there will soon be normal fuel orders and usage.

1. Important Data/High Impact on Weekly Market Analysis 25 - 29 January 2021

1.1 CPI & Trimmed Mean CPI (AUD)

Wednesday, 07:30 WIB. This data calculates changes in the prices of goods and services at the consumer level. The average prices of various goods and services are sampled and then compared with the sampling in the previous period. Consumer prices are the majority of the overall data for calculating a country's inflation rate. Inflation is very important for assessing whether a country's currency is weakening or strengthening, because if prices rise, the central bank will raise interest rates in order to control inflation. If this data is released, it will have a major impact on market movements. For Trimmed Mean CPI, it is data that calculates the rate of change in the prices of goods and services at the consumer level, this price is outside the 30% of the most unstable goods. Consumer prices are the majority of the overall data for calculating a country's inflation rate. Inflation is very important for assessing whether a country's currency is weakening or strengthening, because if prices rise, the central bank will raise interest rates in order to control inflation. If this data is released, it will have a major impact on market movements.

1.2 FOMC Statement & Federal Fund Rate (USD)

Thursday, 02:00 WIB. FOMC (Federal Open Market Committee) is a meeting of the heads of the central banks of the United States headed by The Fed. They meet to agree on the policies to be taken. In 1 year they will hold 8 meetings and this is a detailed record of the latest FOMC meeting, after they meet they will usually vote on setting interest rates. The Federal Fund Rate is the decision of a country's central bank to maintain, raise or lower interest rates. Short-term interest rates are the most important factor in determining the value of a country's currency. Market players will definitely pay attention to the release of this data. After this data is released, it will usually be followed by a statement and inform the mass media which will also be followed by a question and answer session, where this question and answer session will move the market volatile.

1.3 FOMC Press Conference (USD)

Thursday, 2:30 p.m. WIB. This data is about a press conference that has 2 parts - first a prepared statement is read, then the conference is open to questions from the press. The questions often lead to unscripted answers that create great market volatility. This is one of the main methods the Board uses to provide investors with information about monetary policy. It covers in detail the factors that influenced the latest interest rate decision, such as the overall economic outlook and inflation. Most importantly, it provides clues about what monetary policy will be in the future.

1.4 Advanced GDP (USD)

Thursday, 20:30 WIB. This data is data that measures the level of income and purchasing power of a country, and data that records the annual rate of change in the inflation-adjusted value of all goods and services produced by the country. The release of GDP (state income and expenditure) data has several levels in its release, namely Advance GDP, Preliminary GDP, and Final GDP. Because Advanced is the earliest to be released, it will be awaited by market players and is able to move the market volatilely.

2. Technical Review According to Weekly Market Analysis 25 - 29 January 2021

2.1 EUR/USD

2.2 USDCHF

2.3 GBPUSD

2.4 USDJPY

2.5 Gold

2.6 AUDUSD

2.7 Oil