After a volatile trading week with two important rate decisions also this week might offer some market momentum moving forward. Especially due to the risk- off moves in markets towards the end of last week, the interest rate decision of the Royal Bank of Australia might offer some insights into the economy as we will analyze below. Furthermore, also the Bank of England’s rate decision might move markets. It is not expected that the BoE will adjust rates so the biggest move might follow on Friday with the news from the US.

With the Dollar gearing up some momentum against other currencies the NFP report on Friday might also offer some interesting insights. Traders should hence approach markets with caution this week.

Important events this week:

– AU- Interest rate decision– The Australian Dollar has been rising for the past two trading weeks and especially the breakout to the upside above the technical 0.6700 resistance zone was offering strength for the AUDUSD currency pair. The positive risk sentiment helped the Aussi, which is typically rising when investors favor risky assets. Yet, the trend has changed direction and the AUS remained under pressure towards the end of last week.

AUDUSD weekly chart

As the weekly chart above shows, the market has created a bearish pinbar candlestick pattern. This might indicate, that prices should be expected to fall, unless the market is able to break the 0.7050 resistance level. The bearish pressure might even intensify below the 0.6900 price level, which was a support zone several times in the past. Hence a retest of the 0.6700 level could be on the cards if the strength of the US- Dollar continues to gear up momentum. Due to the recent rise in inflation in Australia the Central Bank is expected to increase the interest rate again. This, in general, should be seen as positive but might only cause a small impact given the current circumstances. The data will be released on Tuesday, the 03^rd of February at 04:30 CET.

– US- Nonfarm Payrolls report– it is expected that the US only added 67.000 new jobs to the economy last month. As employment figures have been falling in recent months the downside momentum might hence continue. Yet, this months’ reading is already expected to come in better compared to the previous month and might hence give the Dollar a boost if proven true.

XAGUSD monthly chart

The Silver market is not strongly related to the news release but might still move a lot. The Dollar has been gearing up steam and since the risk appetite remains limited and the market might continue to move lower. The monthly chart shows the strong bearish pattern. Silver had fallen sharply during Friday’s trading last week and lost nearly 40% of its value. The risk averse market sentiment might indicate that silver prices could continue to fall given the current outlook. A stronger Dollar would cement such views. The NFP report will be released on Friday, the 06^th of February at 14:30 CET.