Trading on key Forex news: we are awaiting the outcome of the Fed meeting, the publication of macro data reflecting GDP growth in the Eurozone, inflation indicators for Australia, Germany, data on the US labor market for January, as well as the results of the vote in the British Parliament on the new Brexit plan proposed last monday by the UK Prime Minister Teresa MayDue to a significant decline on Friday, the dollar closed the last trading week in the negative territory. Last week, the dollar index DXY, reflecting its value against a basket of 6 currencies, fell by 0.5% to 95.50.Investors took profits in long positions in the dollar at the end of the week and before the new week, which is expected to be saturated with economic news.As expected, neither the Bank of Japan, nor the ECB began to change their current monetary policy at the meetings that ended last week.The management of the Bank of Japan stressed its intention to keep interest rates extremely low for a long period of time. The Bank of Japan still intends to make purchases of government bonds in the amount of about 80 trillion Japanese yen (731 billion US dollars) per year. Inflation and economic forecasts of the Bank of Japan point to the continuation of extra-soft monetary policy for the next year or two.On Thursday, the ECB also left its interest rates and monetary policy unchanged. ECB President Mario Draghi reported on the prevalence of downside risks for the Eurozone economy, including protectionism in international trade and geopolitical tensions. Meanwhile, the composite PMI index of the Eurozone calculated by Markit dropped to 50.7 in January, reaching a minimum since July 2013, with the forecast of 51.4.The euro fell against the dollar last Thursday by 0.7% to 1.1290, the lowest level since December 17. However, the Eurodollar rose sharply on Friday, offsetting the fall in the previous days and closing the past week in positive territory.The dollar fell on Friday and by the end of the week. Investors paid attention to factors such as tensions between the United States and China, as well as the suspension of the operation of the US government, which has lasted for the 35th day in a row, the longest time in history.US President Donald Trump said last Friday that an agreement had been reached to put an end to the shutdown and restore the work of the federal government. However, in his opinion, “the government can stop work on February 16 again if the deal is not concluded”.Next week, participants of the financial markets will study economic indicators presented by the statstic services of Australia, Germany, Eurozone, USA, as well as the results of the Fed meeting and the vote in the British parliament according to the new Brexit plan proposed by Prime Minister Teresa May. As always, a number of important macroeconomic data and several important news are expected to be published on the new trading week.

Sunday, January 27

23:50 (GMT) JPY Meeting of the Bank of Japan Monetary Policy Committee

The committee will analyze the economic situation in Japan and provide guidance on possible future prospects for the Bank of Japan's financial policy. If the tone of the protocol indicates strong intentions regarding monetary policy in the country, this will negatively affect the Japanese stock market and strengthen the yen. Vice versa, soft rhetoric regarding the prospects for the bank’s monetary policy will contribute to the weakening of the yen and the growth of the Japanese stock market.At the end of last week’s meeting, the Bank of Japan maintained its extra-soft monetary policy unchanged. The Board of Directors of the bank decided to maintain the key short-term rate at the level of -0.1% and the zero target rate of return on 10-year government bonds. The Bank also revised its inflation forecasts downward for the next two years. The management of the Bank of Japan stressed its intention to keep interest rates extremely low for a long period of time. The Bank of Japan still intends to make purchases of government bonds in the amount of about 80 trillion Japanese yen (731 billion US dollars) per year.

Monday, January 28

14:00 EUR Speech by ECB President Mario Draghi

The market reacts strongly to Mario Draghi's speeches that follow immediately after the ECB meetings on monetary policy.Other appearances by Mario Draghi cause less market reaction. However, if Mario Draghi makes unexpected statements about the last meeting of the ECB and the bank’s monetary policy, this will again cause a surge in euro volatility.Mario Draghi acknowledged the slowdown in the European economy and the fact that recent economic data was weaker than expected.

Tuesday, January 29

GBP UK Parliament Voting on Brexit

The British Parliament will either approve or decline the new Brexit deal plan presented by Teresa May. If Parliament does not accept this plan, the likelihood of a hard Brexit will increase dramatically. This will most negatively affect the quotes of the pound.

Wednesday, January 30

00:30 AUD Consumer Price Index. The RBA core inflation index by truncated average method (4 quarter)

The inflation consumer price index (CPI) for the 4th quarter of 2018 published by the RBA and the Australian Bureau of Statistics assesses the dynamics of retail prices for goods and services in Australia. CPI is the most significant indicator of inflation and changes in customer preferences. A high value is a positive factor for the AUD, and a low one is negative. The previous value of the indicator +0.4% (+1.9% in annual terms). According to the forecast, the value of the indicator is expected to be at +0.4% (+1.7% in annual terms), which may adversely affect the AUD. If the value of the indicator is better than the forecast, it will have a positive impact on the AUD.The RBA core inflation index by the truncated average method for the 4th quarter published by the RBA and the Australian Bureau of Statistics reflects the dynamics of retail prices of goods and services that make up the consumer basket. The simple truncated average method takes into account the weighted average core, the central 70% of the index components. The previous value of the index +0.4% (+1.8% in annual terms). According to the forecast, it is expected that the value of the indicator has not changed and remained at +0.4% (+1.8% in annual terms). If the value of the indicator is worse than the forecast, then this will negatively affect the AUD.

13:00 EUR Harmonized Index of Consumer Prices (HICP) in Germany

This index is published by the EU Statistics Office and is calculated on the basis of statistical methodology agreed upon between all EU countries. It serves as an indicator for estimating inflation and is used by the Governing Council of the ECB to assess the level of price stability. A positive result strengthens the EUR, a negative one weakens it.In December, the HICP index (in annual terms) grew by +1.7%. If the data for January turns out to be better than the previous value, the euro will strengthen in the short term. Forecast: +1.8% in January. Probably, this value and its publication will have a short-term impact on the euro.

19:00 USD The decision of the Fed on the interest rate. The Fed's comments on monetary policy

It is widely expected that the rate will remain at the same level of 2.5%. During the publication of the decision on the rate, a surge in volatility is expected across the entire financial market, primarily in the US stock market and in dollar quotes.Comments by Fed Chairman Jerome Powell may affect both short-term and long-term USD trading. A more hawkish position on the Fed’s monetary policy is seen as positive and strengthens the US dollar, while a more cautious one is evaluated as negative for the USD. Any hints by Powell to the possibility of a faster increase in interest rates will cause a strengthening of the dollar and a fall in US stock markets.Investors want Powell to express his opinion on the Fed’s plans for this year, after the Fed’s leaders expressed a cautious assessment in December about the prospects and pace of tightening of the Fed’s monetary policy.

Thursday, January 31

10:00 EUR Eurozone GDP for the 4th quarter (preliminary estimate)

GDP is considered an indicator of the overall state of the Eurozone economy. The growing trend in GDP is considered positive for the EUR, a low result weakens the EUR.Recently, macro data from the Eurozone has been indicating a slowdown in the European economy. Against the backdrop of steadily low inflation, the risks of a slowdown in the European economy may force the ECB leaders to refrain from raising interest rates for a long time after the end of the QE program in December. Mario Draghi also previously stated that the QE program can be extended if necessary.Forecast: in the 4th quarter, Eurozone GDP grew by +0.2% (+1.2% in annual terms). In Q3, GDP growth was +0.2% and +1.6%, respectively. If the data turns out to be even weaker, then the euro may decline significantly in the short term. Data better than the forecast will strengthen the euro.

Friday, February 1

13:30 USD Average hourly wages. Non-Farm Payrolls. Unemployment rate

These are most important indicators of the state of the labor market in the United States in January. Forecast: +0.3% (against +0.4% in December) / 168,000 (against 312,000 in December) / 3.9% (against 3.9% in December).In general, the indicators can be described as strong. If they are better than the forecast, it will have a positive impact on the USD. However, it is often difficult to predict the market response to the publication of indicators. In any case, when these indicators are published, a surge in volatility is expected in trading not only for the USD, but also for the entire financial market. The most cautious investors might prefer to stay out of the market during this period.

15:00 USD PMI index in the manufacturing sector of the US economy. Gradual acceleration of inflation index (from ISM)

The PMI business activity index in the manufacturing sector of the US economy published by the Institute for Supply Management (ISM) is an important indicator of the state of the American economy as a whole. A result above 50 is considered positive and strengthens the USD, one below 50 is negative for the US dollar. Forecast: 54.3 in January (against 54.1 in December), which is likely to have a positive impact on the US dollar.The gradual acceleration of inflation index published by the Institute for Supply Management (ISM) points to business expectations for inflation in the United States. A high and growing value is seen as a positive factor and strengthens the USD, a low and declining value is seen as a negative factor for the US dollar. Forecast: 58.0 in January (against 54.9 in December), which is likely to have a positive impact on the US dollar.