EUR/USD Forecast: bearish below 1.1440

After setting a new 11-year low at 1.1097 following Greek elections result last Monday, the EUR/USD pair spent the week in consolidative mode, finding finally sellers in the 1.1422 level, slightly below the 61.8% retracement of the post ECB-QE-announcement slide. As the week fades, the pair trades right below the 1.1300 mark, under pressure as dollar strengthens across the board, closing in the green for the first time in eight weeks.

The weekly chart shows that technical indicators maintain a strong bearish momentum in extreme oversold levels, which suggest there’s still room for further gains in correction mode, but are in no way confirming a bottom. In the daily chart, indicators have bounced from extreme oversold readings but remain deep in the red, whilst moving averages maintain their bearish slope well above current price, being the shortest, and the closest, 20 SMA around 1.1520. Price has been consolidating for most of these last days in a quite tight range, but as long as capped below 1.1440, 61.8% retracement of the above mentioned rally, the upside will likely remain limited. It will take some steady follow through above the mentioned 1.1520 to see the corrective movement extending over the upcoming days, eyeing tops early January lows in the 1.1750 price zone.
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Central Banks still on the makes, US NFP next

This past week did not lacked entertainment, although it was quite soft as just “minor” Central Banks played the currencies’ war.  The Singapore Central Bank eased its currency policy announcing it would take measures to slow the appreciation of the Singapore dollar. The Denmark one cut its rate for third time in two weeks, whilst Russia cut its benchmark from 17% to 15%, just one month after a surprise hike from 10% to 17%. There was no official announcement coming from Switzerland, but the EUR/CHF spiking 100 pips in an hour, almost daily basis, should lift suspects they are somehow working on weakening CHF.
Data was quite soft in Europe, with inflation in the EZ and Germany taking another step into deflation. In the US, macroeconomic readings were far from bright, except when it came to confidence: Americans are overly optimistic, despite the first year meeting of the FED brought nothing new.
The dollar continued its advance to multiyear highs against most rivals, with commodity currencies leading the slide, and EUR and JPY fighting back. But should be no surprise as both currencies in their crosses against the greenback had been largely oversold for months. At this point, seems more as some sort of consolidation/correction going on in both, in the middle of the dollar bullish trend.
The worse and the best word these days around the world is not growth, but “inflation.” Deflationary pressures in Europe triggered QE which finally decided to inject easy money into the markets sending local share markets strongly up. Low inflation in the US is the milestone to overcome for the FED to start rising rates.  There won’t be much on that front among majors economies next week, but there will be plenty of fundamental data that will provide information of how consumption is doing, and therefore where inflation is heading too. Everything will be read in regards of inflation, or at least most of it.
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OPEC oil output rises in January as key members stand firm: survey

LONDON (Reuters) - OPEC's oil supply has risen this month due to more Angolan exports and steady to higher output in Saudi Arabia and other Gulf producers, a Reuters survey showed, a sign key members are standing firm in refusing to prop up prices.
The Organization of the Petroleum Exporting Countries at a November meeting decided to focus on market share rather than cutting output, despite concerns from members such as Iran and Venezuela about falling oil revenue.
Supply from OPEC has averaged 30.37 million barrels per day (bpd) in January, up from a revised 30.24 million bpd in December, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants.
At the Nov. 27 meeting, OPEC retained its output target of 30 million bpd, sending oil prices to a four-year low close to $71 a barrel. Crude since fell to a near six-year low of $45.19 on Jan. 13 and was trading above $49 on Friday.
OPEC Secretary General Abdulla al-Badri, speaking in London on Monday, defended the no-cut strategy and said prices may have reached a floor, despite oversupply. Other OPEC delegates have since echoed this message.
"Prices are stabilizing," said a delegate from a Gulf producer. "But the world economy is not very strong and stocks are too high."
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Crude oil rallies over 1% but supply glut worries still weigh

Crude oil futures rallied over 1% on Friday, on the back of a weaker dollar but the commodity still remained within close distance of a nearly six-year low as ongoing concerns over a glut in global supplies continued to weigh.
On the New York Mercantile Exchange, U.S. crude oil for delivery in March traded $0.56 or 1.26% higher to $45.10 a barrel during European early afternoon trade.
Prices rose $0.08 or 0.18% on Thursday to settle at $44.53.
Futures were likely to find support at $43.58, Thursday's low and a nearly six-year low and resistance at $46.55, the high from January 27.
Oil prices have fallen nearly 60% since June as the Organization of Petroleum Exporting Countries resisted calls to cut output, while the U.S. pumped at the fastest pace in more than three decades, creating a glut in global supplies.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.27% to 94.71, moving away from last Friday's more than 11-year highs of 95.77.
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Wall St. closes down for January, Shake Shack rallies in debut

NEW YORK (Reuters) - U.S. stocks closed down on Friday after a volatile session as investors worried at the end of a rough month for the market about weak U.S. growth data and whether instability in Europe could hurt corporate earnings in the United States.
U.S. economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006.
This came after Greece's finance minister said the government would not cooperate with the European Union and International Monetary Fund mission.
A brief afternoon rally from rising oil prices failed to stick as investors, nervous about U.S. and global economies, fled to bonds from equities and even sold off utilities stocks, the worst performing sector on the day.
"It feels like a flight-to-safety trade on a month-end. People are putting money into assets that have done well this month," said Peter Coleman, head trader at ConvergEx Group in New York, who said Friday was a good reflection of the month.
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Forex - USD/CAD jumps over 1%, hits fresh 6-year highs

The U.S. dollar rose over 1% to fresh six-year highs against its U.S. counterpart on Friday, even as data showed that the U.S. economy grew at a slower pace than expected in the last quarter, as downbeat Canadian growth data weighed on the nation's currency.
USD/CAD hit 1.2750 during early U.S. trade, the pair's highest since March 2009; the pair subsequently consolidated at 1.2755, climbing 1.09%.
The pair was likely to find support at 1.2506, Thursday's low and resistance at 1.3063.
The Bureau of Economic Analysis reported on Friday that U.S. gross domestic product rose 2.6% in the last quarter of 2014, down from a previous estimate of 3.0% and from a growth rate of 5.0% in the three months to September.
The greenback remained supported after the Federal Reserve indicated this week that interest rates could start to rise around mid-year.
Meanwhile, a report by Statistics Canada showed that the country's GPD fell 0.2% in November, compared to expectations for a 0.1% downtick and after a 0.3% gain in October.
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Forex - EUR/USD off session highs after batch of U.S., E.Z. data

The euro erased gains against the U.S. dollar on Friday, despite tepid U.S. economic reports as earlier data from the euro zone failed to boost confidence in the bloc's economic recovery.
EUR/USD pulled away from 1.1364, the session high, to hold steady at 1.1308 during U.S. morning trade.
The pair was likely to find support at 1.1223, the high of January 27 and resistance at 1.1421, the high of January 27.
In a revised report, the University of Michigan said its consumer sentiment index ticked down to 98.1 in January from 98.2 the previous month. Analysts had expected the index to remain unchanged this month.
The UoM also said its inflation expectations for the next 12 months rose to 2.5% this month from 2.4% in December.
A separate report showed that the Chicago purchasing managers' index rose to 59.4 this month from 58.8 in December, whose figure was revised up from a previously estimated reading of 58.3. Analysts had expected the index to fall to 57.5 in January.
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