20.01.202009:03 Forex Analysis & Reviews: We expect moderate demand for risky assets to continue this week (we expect EUR/USD and USD/JPY pairs to increase this week)

World markets ended the week on a positive note, satisfied with the final signing of the US-China "first phase" trade agreement, as well as positive economic statistics from both America and China.

Although most experts believe that the trade "world" between the US and China will be in the nature of a hidden, powdery conflict, it still suits everyone, which means that the markets have prospects for maintaining demand for risky assets. And here, the statistics that were released last week from economic statistics from the "under heaven" and the United States are of great help.

On the other hand, Chinese data showed an acceptable growth rate in the fourth quarter and on an annualized basis of 1.5% and 6.0%, respectively. However, greater interest was caused by the volume of industrial production, which jumped by 6.9% against 6.2% in annual terms, by the way, while it was expected to decrease in growth to 5.9%. What is also important were the numbers and retail sales, which maintained growth at 8.0% amid an expected decline to 7.8%.

From US data, of course, we should single out the values of retail sales and the Philadelphia index of manufacturing activity, which were published on Thursday and showed respectively an increase of 0.7% from 0.1% for the previous reporting period and an increase to 17.0 points from 2.4 points.

Meanwhile, protective assets have come under pressure against the backdrop of these important data for the global economy, though not for such a long time. But this is more true for gold, which is in demand, primarily, as some alternative to the dollar among the countries-opponents of the USA, for example, in Russia. Nevertheless, a slight pullback supported the yields on the US Treasuries, the dollar against the Japanese yen and the Swiss franc.

We believe that the coming week may turn out to be quite calm as a whole, despite the expected meeting of the ECB and the publication of important economic data from both the eurozone, Germany, and the United States.

Today, we do not expect much activity in the markets due to the weekend in America - Martin Luther King Day.

Forecast of the day:

This week, the EUR/USD pair may test the level of 1.1240 again if the ECB's final decision is unclear regarding the prospects of monetary policy and if the pair stands above the level of 1.1085.

The USD/JPY pair remains in a short-term upward trend. Thus, maintaining positive sentiment in the markets may stimulate the continuation of growth of the pair to 112.20, but for this to happen, it should stay above 109.75.