Weekly market analysis from 3rd February 2025

This week’s economic calendar is filled with key data releases and central bank decisions that could influence market sentiment, particularly for the USD, GBP, CAD, and NZD.

The week begins on Monday with the ISM Manufacturing PMI for the US, expected to hold steady at 49.3, with any surprise potentially setting the tone for risk sentiment and dollar movements.

On Tuesday, attention turns to the US JOLTS Job Openings, forecasted to decline to 7.88M from 8.10M, suggesting a potential slowdown in labor demand. Later, New Zealand's labor market data is in focus, with Employment Change q/q projected at -0.2%, improving from the previous -0.5% contraction, while the Unemployment Rate is expected to rise to 5.1% from 4.8%.

Midweek, the ADP Non-Farm Employment Change report could provide further insights into US employment conditions, with expectations of 149K new jobs, up from 122K, signaling steady labor market growth. This is followed by the ISM Services PMI, which is forecasted to tick slightly higher to 54.2 from 54.1, reflecting continued expansion in the services sector.

On Thursday, the spotlight turns to the Bank of England, with the Monetary Policy Report, Policy Summary, and MPC Official Bank Rate Votes set to drive volatility in GBP pairs. The BoE is expected to cut its Official Bank Rate to 4.50% from 4.75%, with markets keenly awaiting the vote breakdown for further policy direction. Across the Atlantic, US weekly Unemployment Claims are forecasted to rise slightly to 214K from 207K, providing another indicator of labor market strength.

The week wraps up on Friday with significant employment data from Canada and the US. Canada’s Employment Change is expected to show a sharp slowdown to 26.5K from 90.9K, while the Unemployment Rate is forecasted to rise to 6.8% from 6.7%, reflecting signs of softening in the labor market. Meanwhile, in the US, Average Hourly Earnings m/m is set to remain steady at 0.30%, while Non-Farm Employment Change is expected to drop to 154K from 256K. The Unemployment Rate is projected to hold at 4.1%, reinforcing expectations for a stable but gradually moderating labor market.

As traders digest these releases, market volatility could pick up, particularly in forex and equities, as investors adjust expectations for economic momentum and monetary policy shifts.

Here are 3 markets to watch this week

All technical analysis is provided by Trading Central.

USD/CAD

If USD/CAD remains above the pivot point at 1.4260, the pair could potentially rise toward the resistance levels at 1.5000 and 1.5350. Alternatively, a break below the pivot at 1.4260 may lead to further downside, targeting 1.3945 and 1.3820. While a technical pullback cannot be ruled out, the downside appears limited as the RSI remains bullish, supporting further upside momentum.

GBP/USD

If GBP/USD remains below the pivot point at 1.2810, the pair could potentially decline toward the support levels at 1.2160 and 1.2035. Alternatively, a break above the pivot at 1.2810 may lead to further upside, targeting 1.3043 and 1.3260. While a technical rebound cannot be ruled out, the upside appears limited as the RSI remains bearish, signaling further downside potential.

Gold

If gold remains above the pivot point at 2650.00, the price could potentially rise toward the resistance levels at 2860.00 and 2920.00. Alternatively, a break below the pivot at 2650.00 may lead to further downside, targeting 2600.00 and 2540.00. While a technical pullback cannot be ruled out, downward momentum appears limited as the RSI lacks bearish pressure.

This week's high impact market events

The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks. Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.

Time (GMT +3)

Monday 3rd February

Tuesday 4th February

Wednesday 5th February

Thursday 6th February

Friday 7th February

How will you trade the markets this week?

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