Week Ahead: EURUSD on brink of major breakout?

<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a> </strong></p>
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<ul>
<li>EURUSD braces for heavy event week</li>
</ul>
<ul>
<li>Keep eye on top-tier EU + US data</li>
</ul>
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<li>Speeches from central bank officials also in focus</li>
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<li>Major breakout could be on horizon</li>
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<li>First points of interest at 1.10 and 1.09</li>
</ul>
<h3>The EURUSD could be pumped with fresh life next week due to key economic data, speeches from central bank officials and threat of a partial US government shutdown.</h3>
<p><strong>Monday, 15th January </strong></p>
<ul>
<li>CNH: China medium-term lending facility rate</li>
<li>CAD: Canada existing home sales</li>
<li>EUR: Eurozone industrial production, Germany 2023 GDP report</li>
<li>World Economic Forum in Davos</li>
<li><strong>US markets closed – Martin Luther King Jr. holiday</strong></li>
</ul>
<p><strong>Tuesday, 16th January </strong></p>
<ul>
<li>EUR: Germany CPI, ZEW survey expectations</li>
<li>GBP: UK jobless claims, unemployment</li>
<li>CAD: Canada CPI, housing starts</li>
<li>USD: US Empire Manufacturing, Fed Governor Christopher Waller speech</li>
<li>WSt30_m: Goldman Sachs earnings</li>
</ul>
<p><strong>Wednesday, 17th January </strong></p>
<ul>
<li>CNH: China GDP, retail sales and industrial production</li>
<li>EUR: Eurozone CPI, ECB President Christine Lagarde speech – Davos</li>
<li>GBP: UK CPI</li>
<li>USD: US retail sales, industrial production, Fed Beige book, New York Fed President John Williams speech</li>
</ul>
<p><strong>Thursday, 18th January </strong></p>
<ul>
<li>AUD: Australia unemployment</li>
<li>NZD: New Zealand food prices</li>
<li>EUR: ECB minutes, ECB President Christine Lagarde speech – Davos</li>
<li>JPY: Japan core machine orders, industrial production</li>
<li>USD: US housing starts, initial jobless claims, Atlanta Fed President Raphael Bostic speech</li>
</ul>
<p><strong>Friday, 19th January </strong></p>
<ul>
<li>CAD: Canada retail sales</li>
<li>JPY: Japan CPI, tertiary index</li>
<li>EUR: ECB President Christine Lagarde speech – Davos</li>
<li>USD: University of Michigan consumer sentiment, San Francisco Fed President Mary Daly speech</li>
<li><strong>Deadline for avoiding partial US government shutdown</strong></li>
</ul>
<blockquote><p><strong>It has felt like the same old story for the EURUSD since the start of the new year with prices swinging within a range on the daily charts. </strong></p></blockquote>
<p><img fetchpriority="high" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/EURUSDH4_6.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="87c05b43-74a7-47c5-ab90-949378ea4d45" data-src="/s3-static/users/user17/EURUSDH4_6.png" /></p>
<p>Given the exceptional list of major risk events over the coming week, a significant move could be around the corner…</p>
<p><strong>Here are 4 factors to keep an eye on:</strong></p>
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<h3>EU data dump + ECB President speech</h3>
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</ol>
<p>It’s a week packed with crucial European economic reports that may influence expectations around when the <strong>European Central Bank (ECB) will cut interest rates this year. </strong></p>
<p><strong>Data from Germany, Europe’s largest economy</strong> will be under the spotlight with much focus on the <strong>2023 growth figures, CPI and ZEW survey expectations.</strong>  This will be complemented by the <strong>ECB meeting minutes</strong> for December’s meeting which will be scrutinized for fresh clues on the ECB’s next move. But the main course will be <strong>Christine Lagarde’s remarks during the World Economic Forum. </strong></p>
<p>Traders are currently pricing in a 40% probability of a 25-basis point ECB rate cut by March 2024, <strong>with a move fully priced in for April. </strong></p>
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<li><strong>The euro may weaken </strong>if overall economic data disappoints and Lagarde strikes a dovish tone in Davos – <strong>sending the EURUSD lower as a result. </strong></li>
<li>Should overall economic data beat forecasts and Lagarde pushes back against rate cut bets, <strong>the euro could rise – elevating the EURUSD.</strong></li>
</ul>
<ol start="2">
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<h3>Key US data + Fed speeches</h3>
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<p>A barrage of top-tier US economic data has the potential to rock the dollar, <strong>impacting the EURUSD as a result. </strong></p>
<p>Investors will be paying close attention to the latest retail sales figures, manufacturing data and consumer sentiment to gauge the health of the US economy. Speeches from a host of Fed officials will be added to the mix, coupled with the beige book which could impact speculation around when US rates will be cut this year.</p>
<p>The latest hotter than expected US inflation report has slightly dented expectations around when the Fed will cut rates, but traders still see a <strong>76% probability of a cut in March. </strong></p>
<ul>
<li>Stronger-than-expected data and hawkish remarks by Fed officials may boost the dollar as rate cut bets decline. <strong>This may pull the EURUSD lower.</strong></li>
<li>Should overall US economic data disappoint, and Fed officials sound dovish, <strong>the dollar may weaken – pushing the EURUSD higher. </strong></li>
</ul>
<ol start="3">
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<h3>Possible partial government shutdown</h3>
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<p>The United States is facing a partial government shutdown deadline set to <strong>expire on January 19th.</strong></p>
<p>Sentiment towards the US economy could take a hit, especially if a <strong>full shutdown happens beyond the February 2nd deadline.</strong> Given how this development is likely to influence the USD, its impact will most likely be seen on the EURUSD.</p>
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<h3>Technical forces</h3>
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<p>The EURUSD is respecting a bullish channel on the daily timeframe with a <strong>“golden cross” technical pattern in play</strong>. However, prices remain trapped within a 100-pip range with minor support at 1.1000 and resistance at 1.0900.</p>
<ul>
<li>A strong breakout and <strong>daily close above 1.1000</strong> could trigger a move towards the monthly resistance around <strong>1.1100 and 1.1230 – a level not seen since mid-July 2023.</strong></li>
<li>Should prices slip back below <strong>1.0900</strong>, this could open a path back toward the <strong>200-day SMA at 1.0840 and 1.0756.</strong></li>
</ul>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/EURUSDDaily_58.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="054ebeb4-87d2-422c-9a62-c18c16f5712d" data-src="/s3-static/users/user17/EURUSDDaily_58.png" /></p>
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<p><img loading="lazy" decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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