The U.S. dollar and Swiss franc are likely to hold gains next week should tensions in Egypt persist, raising concerns about stability in the Middle East and North Africa and increasing investor demand for safer havens.
A slew of economic data and central bank decisions is due next week, including the U.S. government’s closely watched monthly non-farm payrolls report, but analysts said civil unrest in Egypt, if not contained, could easily trump macro fundamentals.
Both the dollar and Swiss franc rallied on Friday, with the greenback and franc rising 0.8 percent and 1.2 percent, respectively, against the euro.
Trading Setups / Chart in Focus:
The NZDUSD formed a bearish pin bar setup Friday off the top of its recent trading range between 0.7790 – 0.7550. Price could move lower this week and re-test support near 0.7550 if this pin bar breaks to the downside.
The EURUSD rejected resistance between 1.3700 – 1.3800 on Friday, rotating lower into its 8 day ema. We discussed the potential for a move to the downside in Thursday’s commentary, should price continue to fall this coming week we would keep an eye on support near 1.3430 and the 21 day ema for bullish price action setups.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my price action forex trading course.
On Wall Street Friday stocks experienced their biggest one-day loss in almost six months as anti-government rioting in Egypt caused investors to flee riskier assets.
The Dow dropped 166.13 points, or 1.39 percent, the S&P 500 lost 23.20 points, or 1.79 percent, and the Nasdaq lost 68.39 points, or 2.48 percent.
Upcoming important economic announcements: 1/31/2011
8:30am EST: Canada – GDP m/m
4:45pm EST: New Zealand – Labor Cost Index q/q
8:00pm EST: China – Manufacturing PMI
10:30pm EST: Australia – Cash Rate
10:30pm EST: Australia – RBA Rate Statement