Race Against Time The information presented in this publication is communicated to you for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy, and should not be used as a basis or be considered as an incentive to engage in any investment. The macro point Race Against TimeThe Macro PointThe economic indicators published last week, mainly covering the month of December, confirmed a rather significant recovery in industrial activity. Across the Channel, the manufacturing PMI index reached the threshold of 57.5 while in the eurozone it was at 55.2. It should be noted that in the United States, durable goods orders are now close to their pre-crisis levels. This recovery could be jeopardized by the recently observed mutations of the virus and the necessity to implement new restriction measures, or even lockdowns, to contain them. Last week, several countries implemented lockdowns: China in two cities in the Hebei province (east of the country), Canada, the United Kingdom (very strict lockdown), Japan with the establishment of a state of emergency in Tokyo, and Germany which extended the lockdown until the end of the month. A race for vaccination is now underway to prevent the health situation from worsening, but it is unlikely to avoid even stricter social distancing measures in the coming weeks. It can already be considered that the first quarter of this year will be marked by a significant slowdown in economic activity, or even a new contraction, as will likely be the case in the United Kingdom.At the level of central banks, the minutes of the FOMC of the Federal Reserve confirmed the maintenance of an accommodative bias for as long as necessary. Even though participants highlighted the strength of the recovery at the end of 2020, they also pointed out the risks weighing on the recovery at the start of 2021, which we have just highlighted. In the short and medium term, monetary policy should remain on autopilot, with the asset purchase program remaining unchanged. The current pace is considered appropriate by the central bank. If new measures are required in the United States to support the recovery, it would certainly be the budgetary lever that would be used.Additionally, market expectations regarding the monetary policy of the Bank of England have changed following the implementation of a strict lockdown, similar to that of March, across the Channel. Traders now anticipate a cut in the key interest rate by 10 basis points, potentially as early as February. Ultimately, it will not be Brexit but the pandemic that may force the Bank of England to act again. Technical point On the foreign exchange market, the euro remained within a narrow range against the US dollar, between 1.22 and 1.24. In the absence of a catalyst, the pair is currently unable to break through the psychological threshold of 1.25. However, in the medium to long term, the upward movement is likely to continue, capitalizing on hopes related to the Biden administration's implementation, the search for diversification and yield by market operators, and the ongoing cyclical recovery. From a technical analysis perspective, the levels to watch this week are located at 1.2158 (support) and at 1.2368 and 1.25 (resistances).The supports and resistances displayed below respectively indicate the low and high points within which the prices should evolve during the week.SUPPORTSWEEKLYRESISTANCESWEEKLYS2S1R1R2EUR/USD1.21001.21581.23681.2500EUR/GBP0.86670.88280.91490.9310EUR/CHF1.06441.07391.09281.1022EUR/CAD1.53001.53041.56841.5811EUR/JPY125.31125.75128.87131.03For personalized advice on trends and currency hedging, contact our trading room: Announcements to follow This week will be marked by very little news on the foreign exchange market. The few indicators that will be published, particularly for the United States (such as core inflation and December retail sales), will likely have no impact on prices. We should be in a market configuration where technical analysis will be the dominant factor in exchange rate movements. Therefore, the previously mentioned support and resistance levels will need to be closely monitored. Additionally, there is a high probability of new lockdown measures in European countries that could be announced in the coming days and that could lead to more volatility.Below you will find the publications and events that should have a major impact on currency exchange rate movements.DAYTIMECOUNTRYINDICATORWHAT TO EXPECT?01/1314:30Core CPI (December)Stable month-on-month at 0.2%01/1514:30Retail Sales (December)Consensus at -0.3% versus -1.1% previously.Did you enjoy this content? Share it!