Forex Major Currencies Outlook (January 28, 2014)

New home sales showed a 414K figure instead of the estimated 457K reading while the previous month’s report was revised down. Headline and core durable goods orders are up for release today, along with the CB consumer confidence report. The latter could show an improvement from 78.1 to 78.3 but durable goods orders are projected to be slightly weaker compared to the previous month’s readings.

EUR

The euro continued to move sideways against the US dollar and the Japanese yen, thanks to the lack of data from the euro zone yesterday. Only the German Ifo business climate report was released and this showed a stronger than expected 110.6 reading, up from the previous 109.5 figure. German import prices are up for release today and the report might show a 0.3% uptick.

GBP

The pound bounced back to life in yesterday’s trading, as traders booked profits ahead of today’s GDP release. There have been no major reports released from the UK yesterday. The GDP report might show 0.7% growth, slightly lower compared to the previous 0.8% GDP figure. However, a weaker than expected reading might trigger a sharp selloff for the pound, as it would confirm the BOE’s bias that growth is not that strong even if the jobless rate is moving closer to their target.

CHF
The franc held on to its wins to the dollar in yesterday’s trading even though there were no reports released from Switzerland. There are still no reports lined up from Switzerland today so USD/CHF might keep moving to the tune of US data.

JPY

The yen took a pause from its recent rallies, except against the US dollar. Risk sentiment seemed to improve yesterday, forcing most traders to book profits off nearby support levels for the yen pairs. There are no reports due from Japan today so the Nikkei’s performance could dictate where yen pairs are headed.

Commodity Currencies (AUD, NZD, CAD)

The Australian dollar recovered against the Greenback, as data from Australia printed improvements. NAB business confidence improved and showed better business conditions while the CB leading index showed a 0.2% uptick. No other reports are due from the comdoll economies for today so risk sentiment might drive price action for these pairs.

By Kate Curtis from Trader's Way