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06.01.2025 12:05 PM
What to Expect This Week? (Resumption of EUR/USD and GBP/USD Declines Expected)

The new week of the new year begins on a cautious note. Last week concluded with attempts at stock market recovery and a noticeable, though localized, strengthening of the U.S. dollar. However, it is too early to claim this movement could transform into a stable trend.

In Monday's trading session, the dollar is weakening, while gold prices are significantly dropping amid mixed dynamics in the Asia-Pacific region and movements in futures for major U.S. stock indices.

As Donald Trump's inauguration approaches, market tension increases. The uncertainty surrounding his upcoming presidency—whether he will immediately launch his new economic policies or not—adds to the strain. Meanwhile, investors are focused on key labor market data from the U.S., which could shape expectations for the Federal Reserve's monetary policy.

Key Events of the Week:

  1. Tuesday: JOLTS Job Openings Expected to rise strongly from 7.744 million in the previous period to 7.770 million in November. Such growth signals a potential recovery in the U.S. labor market after its decline since mid-2022.
  2. Wednesday: ADP Employment Report Forecasted to show a smaller increase of 131,000 jobs in December compared to 146,000 in November. While the report's market impact is not always consistent, significant deviations from expectations could lead to localized stock market movements, notably on Forex.
  3. Fed Officials' Speeches: Several Fed members are scheduled to speak this week, likely reiterating a cautious approach to interest rate cuts in 2025. Current projections anticipate only two rate cuts of 0.25% each this year, a substantial reduction from the September forecast of a 1.0% total easing. If the December meeting minutes confirm this stance, it would support the dollar. The currency has already gained strength ahead of Trump's inauguration on January 20, as his proposed economic policies—such as higher import tariffs, immigration restrictions, and overall economic stimulation—are seen as inflationary.
  4. Thursday: Weekly Jobless Claims The data, remaining within reasonable bounds, will likely not exert significant pressure on the overall labor market picture.
  5. Friday: U.S. Nonfarm Payrolls and Average Hourly Earnings Expected to show a decline in December job growth to 154,000 from November's 227,000, along with a slowdown in monthly wage growth from 0.4% to 0.3%.

Weekly Outlook:

If U.S. labor market data meet or exceed consensus forecasts and Fed comments maintain their dovish tone consistent with December's meeting summary, the dollar is likely to strengthen further. Additionally, local stock markets may continue their recovery attempts. However, overall market dynamics are unlikely to be energetic before Trump's inauguration on January 20.

Daily Forecast:

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EUR/USD

The pair is supported by expectations of rising eurozone inflation. If inflation data confirm an increase to 2.4% from 2.2% year-on-year or slightly higher, the pair could rise to 1.0400. However, this potential increase is unlikely to be a turning point, as the eurozone remains in recession. Moreover, Trump's upcoming economic policies could strongly support the dollar. Considering this, the pair may reverse and decline to the recent low of 1.0245 after a possible rise to 1.0400.

GBP/USD

The pair has partially recovered and is trading below the resistance level of 1.2485. Its inability to surpass this level, coupled with positive dollar news, could lead to a reversal and renewed decline toward 1.2350.

Pati Gani,
Analytical expert of InstaForex
© 2007-2025
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