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The upcoming US economic calendar is loaded with high rated event risk, as well as the January Fed meeting – which unfortunately might not bring much volatility.
Fundamental Forecast for the US Dollar[1]: Neutral
- The DXY Index closed lower on the week for the first time in 2021, but the losses were contained and offered little meaningful technical advance or decline.
- The upcoming US economic calendar is loaded with high rated event risk, as well as the January Fed meeting – which unfortunately might not bring much volatility.
- The IG Client Sentiment Index[2]suggests the US Dollar is on mixed footing ahead of the January Fed meeting.
US Dollar Trading Choppily
The US Dollar (via the DXY Index) broke the uptrend from the early-January lows at the start of last week but found like downside follow through. Instead, meandering price action took hold across USD[3]-pairs, with the DXY Index falling by a mere -0.56% on the week. The largest component of the DXY Index, EUR/USD[4], added +0.79%, while the resilient post-Brexit GBP/USD[5] added +0.71%. A lack of a push higher in US Treasury yields may be contributing to the greenback’s lack of enthusiasm, setting it up for another week of choppy trading.
US Economic Calendar Gets Busier
The economic calendar during the final week of January will offer will provide some key insights into the US economy, which appears to have continued its deceleration at the end of Q4’20 (see more below). On the data side of the calendar, there are five ‘high’ rated releases, as well as the medium-ranked weekly initial jobless claims, which have been the ‘canary in the coalmine’ of sorts as a bellwether for the
