EUR & CHF Weekly Forecast (Jan. 20 – 24)

Got the ECB policy decision and a fresh batch of PMI readings coming in from the euro zone this week! Here’s what’s expected from these catalysts.

ZEW economic sentiment index (Jan. 21, 10:00 am GMT)

• Leading indicator of economic performance based on survey of institutional investors and analysts
• German ZEW economic sentiment index to climb from 10.7 to 15.2 in Jan
• Euro zone ZEW economic sentiment index to rise from 11.2 to 16.3 in Jan
• Figures have been climbing over the past three months

ECB monetary policy decision (Jan. 23, 12:45 pm GMT)

• No actual changes to interest rates or LTRO purchases expected
• Central bank’s growth and inflation outlook to guide interest rate expectations
• Dovish remarks could keep market watchers on the lookout for further easing while optimism regarding the recent pickup could boost the shared currency
• Focus to be on strategic review being launched and potential adjustment in price stability targets
• ECB press conference to take place at 1:30 pm GMT

Flash PMI readings (Jan. 24, starting 8:15 am GMT)

• French flash services PMI to dip from 52.4 to 52.2, reflecting slower expansion
• French flash manufacturing PMI to tick higher from 50.4 to 50.5
• German flash services PMI to climb from 52.9 to 53.2 to signal faster growth
• German flash manufacturing PMI to rise from 43.7 to 44.6
• Euro zone flash services PMI to improve from 52.8 to 52.9
• Euro zone flash manufacturing PMI to climb from 46.3 to 46.9

Technical snapshot

• Stochastic paints a mixed picture of euro pairs, with EUR/JPY indicating overbought conditions and both EUR/USD and EUR/CHF looking bullish in oversold territory.

• The short-term trend strength analysis tool reveals that franc pairs are mostly bearish.

Missed last week’s price action? Read the EUR & CHF price recap for January 13 – 17!