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The liquidity will return in the forex market today after the Christmas Holidays with important economic news related to the economies of Switzerland, UK, US and mainly Japan. As there are only 3 trading sessions until the end of this year, fundamental news have the potential to weigh on new trends, or to the continuation of existing ones depending on the real economic outcomes.

These are the main economic events which can move the forex market today:

European Session

  1. Switzerland UBS Consumption Indicator, UK BBA Mortgage Approvals, France Unemployment Benefit Claims

Time: 07:00 GMT, 09:30 GMT, 17:00 GMT

Higher than expected or rising figures for the consumption indicator and the mortgage approvals are supportive and positive for the Swiss Franc and the British Pound, while lower than expected or declining figures for unemployment benefit claims will be positive for the economy of France and the Euro. Strong readings for consumption indicator and mortgage approvals signal a robust economy with a strong housing market and increased level of consumer consumption and consumer confidence, while low unemployment benefit claims are indicative of a strong labor market, being essential for sustained present and future economic growth.

American Session

  1. US Pending Home Sales, API Crude Oil Stock Change

Time: 15:00 GMT, 21:30 GMT

Rising figures of home sales reflect a strong housing market, which is very important for the US economy as it is highly correlated with the broader state of the economy. Trends in homes sales reflect the state the housing market, any sustained weakness in the US housing market may be an early indicator of future economic slowdown for the broader economy. The forecast for the home sales on a monthly basis are for a decline with a reading of -0.5%, significant lower than the previous reading of 3.5%.

This may be attributed to seasonality, but in any case this swift from positive growth to negative growth is both considered negative for the US Dollar and may influence it directly. The weekly report from American Petroleum Institute (API) provides an overview of US petroleum demand level and any positive of negative surprises have the potential to move crude oil prices.  For example if the increase in crude inventories is more than expected, it implies weaker demand and is considered a negative factor for crude oil prices. So in theory selling pressure for crude oil prices is most probably expected in this mentioned scenario.

Asian Session

  1. Japan Housing Starts, Industrial Production, Retail Sales

Time: 05:00 GMT, 23:50 GMT

As mentioned above in the case of the US economy and the housing market, higher readings for housing starts in Japan will be positive for the economy, signaling a robust housing market, and increased consumer confidence about the future economic outlook.

Also higher figures of retail sales and industrial production are both supportive and positive macroeconomic and fundamental news for the economy of Japan and Japanese Yen, reflecting a strong industrial sector and increased consumer spending, which can lead to higher economic growth, measured by the GDP growth rate. While the forecast is for a negative reading for the housing starts, the expectations are for an increase for both retail sales and the industrial production on a yearly basis, which can influence directly the Japanese Yen, most probably to its appreciation against other currencies, as these are considered positive fundamental news.

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