Currency market was in search for direction during festive period

January 06, 2020 13:30

Last week sentiment in the currency market fluctuated but showed no trend. In the last days of 2019, the world reserve currency depreciated, but appreciated in the second half of the week. The rise was fueled by political news as U.S. troops blew up a car, in which there was Iranian major general Qasem Soleimani, fueling speculation about escalating tensions in the Middle East and the U.S. - Iran conflict.


Economic data in the U.S. was significantly below market expectations. The focus was on the ISM manufacturing PMI index, which was at 47.2 points, the lowest level since June 2009, while Markit's index was 52.4 points and also depreciated. In the domestic industry, negative pressures and poor sentiment remain, as evidenced by the results of rail transportation, which shrank by -3.9% per year. All segments of the railway market recorded a decline, except for petroleum products, as the country's oil production grew moderately in 2019 and had a positive impact on the economy. The Consumer Confidence Index was 126.5 points and was below market expectations, albeit remaining stable over the past 4 months. The number of new unemployed applications reached 222 thousand and normalized over the last year.

The U.S. Federal Reserve released minutes of its last meeting, which mentioned that its members plan to remain conservative in 2020 and keep interest rates unchanged if the economic situation does not deteriorate significantly compared to the latest data.


The main currency pair EUR/USD slightly depreciated and tested its 200-day moving average on Friday. Among economic data, investors were observing manufacturing PMI index results who showed no signs of recovery. In Europe, the index stood at 46.3 points, while in Germany it was 43.7 points, both of which remained in long-term lows and in the negative zone. Less than 50 points were recorded in Spain, Spain, the Netherlands, Austria, Ireland and other smaller countries, suggesting that negative sentiment is prevalent in many economies in the Old Continent. In Germany, labour market figures were published, showing that the number of unemployed increased by 8 thousand. EUR/USD pair closed weekly trading dropping -0.2% during the week.


The main Asian pair, USD/JPY, exhibited a moderate depreciation trend, where the pair finished the last 2 trading sessions of the week below the 200-day moving average and at its lowest point in the last 2 months. No relevant data was published in Japan. The USD/JPY ended the week depreciating -1.2%.


The British pound gained more at the beginning of the week but then lost all gains. Economic data was scarce, with the manufacturing PMI index reaching 47.5 points and returning to multi-year lows, while the same index for the construction sector was only 44.4 points and plummeting. There was no news on Brexit. GBP/USD finished the week unchanged.

Economic Events

This week will begin with the results of service PMI indices. European inflation and retail sales will be monitored on Tuesday. German industrial order data and European business sentiment and consumer confidence indices are expected on Wednesday. On Thursday, important data has not been scheduled, and on Friday, results from the U.S. labour market, which historically had a major impact on market volatility, will be the focus of attention.

According to Admiral Markets market sentiment data, 34% of investors have long positions in the EUR/USD pair (up 16 percentage points compared to last week). In the main Asian pair USD/JPY, 65% of investors have long positions (up 39 percentage points). In the GBP/USD pair, 52% of participants expect a rise (increased 7 percentage points). Such market data is interpreted as contraindicative, suggesting a rise in EUR/USD and a fall in GBP/USD and USD/JPY pairs. Analysis of positioning data analysis should be combined with fundamental projections and technical analysis.

Sources:,, Admiral Markets MT4 Supreme Edition,

Discover the world's #1 multi-asset platform

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.
Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks


Admirals An all-in-one solution for spending, investing, and managing your money

More than a broker, Admirals is a financial hub, offering a wide range of financial products and services. We make it possible to approach personal finance through an all-in-one solution for investing, spending, and managing money.