The lack of important news and economic statistics at the end of this week led to the beginning of consolidation in the foreign exchange market.
After a noticeable weakening at the beginning of this year, the U.S. dollar stabilized against major currencies. This behavior can be characterized as an expectation, and nothing more. Next week the ECB will hold a meeting on monetary policy, important data on GDP of the United Kingdom and the United States will also be published, and the minutes of the last meeting of the Central Bank of Japan will be made public.
These events and statistics are very important since before, it is likely for the central banks of Japan, United Kingdom, and the eurozone had recently reassured the markets of short-term adjustment of monetary policies courses. On this wave, the euro and the yen strengthened strongly, and sterling tried to keep up with them.
As for the events today, the data on the volume of retail sales in the UK and the package of economic data in the US from the University of Michigan will be interesting.
According to the data, the volume of retail sales in the UK fell by 0.6% in December against the growth of 1.1% in November. In annual terms, the base retail sales index could add up to 3.0% against a 1.5% rise in the period, although its monthly December value is supposed to decrease by 0.8% against the November growth of 1.2%.
As for the data from the University of Michigan, positive figures are assumed here. The consumer expectations index from the University of Michigan for the month of January can add up to 90.6 points against the December value of 84.3 points. The mood index should increase this month to 97.0 points against the previous value of 95.9 points. Additionally, the mood indicator increased to 115.5 points against 113.8 points a month earlier.
Assessing the current sentiment in the foreign exchange market, we believe that the consolidation period in the major currency pairs related to the U.S. dollar will continue today.
Forecast of the day:
The EUR/USD pair will most likely consolidate in the range of 1.2165-1.2300 today.
The USD/CAD pair is trading in the range of 1.2360-1.2585 on the wave of correction of oil prices down, as well as expectations of news and economic statistics. Most likely, the pair will remain in this range today.
