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Weekly Market Outlook – 01/05/16

Weekly Market Outlook – 01/05/16

The USD The USD The USD is the official currency of the United States of America. It is the largest reserve currency... More is the official currency of the United States of America. It is the largest reserve currency... More traded weaker against the EUR The EUR The EUR is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More is the official currency of the European Union. Presently 19 out of the 28 collective  nati... More and GBP The GBP The GBP is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More is the official currency of the United Kingdom. The GBP is a major currency and currently ra... More last week on the impetus of an FOMC Statement that cautiously spoke about slowing economic activity in the States. The Fed The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy When used by traders and investors monetary policy usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More usually refers to Central Bank policy concerning ... More ... More is the Central Bank of the United States of America and sets the monetary policy... More report was not conclusive about a potential rate increase in June and if the Central Bank does not hike then it will be even harder to raise the Federal Fund lending rates before the November election for President. After a couple of months of almost perpetual reversals when testing resistance When investors and traders use the term resistance When investors and traders use the term resistance When investors and traders use the term resistance, or resistance level, they are often speaking abo... More , or resistance level, they are often speaking abo... More , or resistance level, they are often speaking abo... More , the EUR and GBP were both able to break through and this sets the tone for interesting days ahead for traders. U.S. data also continued to be unsound last week.

China published their official government Manufacturing PMI numbers early this Sunday and the Caixin Manufacturing PMI data will be released early on Tuesday. The question for Asian investors is if the pullback on stimulus by the Chinese government will continue to show an impact on their economy.

Some analysts have been saying that the China economic data has been improving, but if the Caixin figures prove otherwise on Tuesday it could make Asian traders shudder and cause the JPY The official currency of Japan is the JPY The official currency of Japan is the JPY which is also knows as the Japanese Yen The official currency of Japan is the JPY which is also knows as the Japanese Yen The official currency of Japan is the JPY which is also knows as the Japanese Yen to investors and t... More to investors and t... More to investors and t... More which is also knows as the Japanese Yen to investors and t... More to continue to get stronger against the USD if safe havens are sought. Market participants should note that Japanese banks are on holiday Tuesday, Wednesday and Thursday which could set up the FX markets for some volatility early on Monday from JPY traders who are trying to position themselves before a major drop off in liquidity for the reserve currency the following three days.

The drop in value of the USD was said to be the culprit for negative returns on Wall Street before going into the weekend by some analysts, but quarterly earnings also continue to show that most corporations are struggling to attain the better profits that shareholders desire. Earnings will continue this week from the States, but the focal point for many traders may be the Non-Farm Employment Change numbers this coming Friday.

However, tomorrow from the States the ISM Manufacturing PMI reading will be published. The fact of the matter is that important U.S. economic data continues to underperform. The Advance GDP reading on Thursday was below expectations, the Chicago PMI reading on Friday came in lower, and Consumer Sentiment continues to show signs of deterioration.

So while the jobless numbers that start on Wednesday via the ADP report and conclude on Friday with the official numbers – will be important as always, there is plenty of evidence to suggest that the American economy is not strong and this leads us back to the Federal Reserve The Federal Reserve The Federal Reserve is the Central Bank of the United States of America and sets the monetary policy... More is the Central Bank of the United States of America and sets the monetary policy... More and their monetary policy. Simply put there seems to be little evidence for the need of an interest rate hike in the U.S. currently, the economy is lackluster and inflation In economics the term inflation In economics the term inflation In economics the term inflation refers to price values that are rising on a regular basis in which t... More refers to price values that are rising on a regular basis in which t... More refers to price values that are rising on a regular basis in which t... More is lacking. The USD may very well continue to be a focus for traders this week who have seen the Greenback The USD is the official currency of the United States of America. It is the largest reserve currency... More put under sustained pressure for the first time in many months in a substantive manner.