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The second week of 2014 included a number of significant economic data releases in the European Union, with the German Consumer Price Index (YoY) for December leading the frontline on January 6th, released at 1.4% as expected and acting as a small improvement from the previous month’s 1.3%. The German Harmonised Index of Consumer Prices (YoY) on the other hand decreased for December, falling to 1.2% in comparison to the anticipated 1.4% and the previous figure of 1.6%. The biggest and most pleasant surprise of all in the eurozone last week was the Unemployment Change in Germany for December, which decreased by 15K despite predictions that there would be absolutely no change from the previous month. The December Unemployment Rate remained the same at 6.9% despite the change, however the news were still positive for the euro. The Consumer Price Index (YoY) for the eurozone declined further to 0.8%, continuing in the same vicious circle it has been in since July, declining steadily each month and indicating that the eurozone economy has not yet made a substantial recovery. ECB President Mario Draghi’s comments at the ECB Press Conference on the 9th also fuelled further worry and caused market volatility, as he expressed concern about eurozone inflation and money market conditions and hinted at a need for further action. The EUR/USD dropped to 1.3545 from 1.3620 following the conference but managed to climb back to 1.3610 later on. The GDP (YoY) Q3 for the eurozone marked no change from its steady -0.4%, as was widely expected, illustrating a slow recovery. This week in the eurozone, the most important data is due to be released on the 16th and this includes the final CPIs from Germany and the eurozone and the ECB Monthly Report. December proved to be a month of slow expansion in the US Non-manufacturing sector, with the Non-Manufacturing PMI out at a disappointing 53.0 from November’s 53.9 and a big miss to estimations of a 54.6. The ISM stated that new demand fell substantially for the first time since July 2009. The bad news weakened the greenback and US companies will have to focus on spending to rebuild inventories in the future if the situation is to be reversed. Big news from the US last week was the confirmation of Janet Yellen’s nomination as Federal Reserve Chairperson until February 2018. Led by a new face, the Fed Reserve picked up exactly where it left in the last meeting, with most officials supporting the tapering of $10B at each meeting, and some expressing that cuts should be even larger in order to end the program sooner. Amongst other topics discussed were also changing the thresholds for unemployment and inflation, but no significant conclusions were reached. The most important data release last week was perhaps the announcement of Non-farm Payrolls, which fell drastically to 74K in December compared to November’s 241K and missed expectations of 196K. The drop was the sharpest in months and caused a wave of volatility in the markets, with the EUR/USD shooting to 1.3662 following the release. On a brighter note, the Unemployment Rate was released at 6.7% which was a better than expected figure and a drop from November’s 7.0%. The most important news to look out for this week in the US are the Retail Sales for December which are expected to drop and the Consumer Price Index (YoY) for December which is expected to rise. In the UK, the Bank of England (BoE) is remaining loyal to its long-term plan to keep interest rates at 0.50% and Quantitative Easing at £375B, so last week neither the BoE Interest Rate Decision nor the Asset Purchase Facility had an impact on the GBP. January 10th saw the release of the Industrial Production (YoY) and the Manufacturing Production (YoY), both of which missed expectations and came out at 2.5% and 2.8% respectively. The Markit Services PMI also declined to 58.8 from 60.0, making for a somewhat gloomy week of news in the UK. This week, the most important economic news expected are the releases of the country’s set of CPIs, none of which are expected to change. Japan also experienced a quiet week, with the Coincident Index for November changing ever so slightly from 110.4 to 110.5 and the Leading Economic Index for November also making a small shift upward from 109.8 to 110.8. No important news have been released in Japan yet this week, but in the next days all eyes will be on the releases of Machine Tool Orders, Industrial Production and Consumer Confidence Index. What to Watch this Week: EUR/USD: Support levels can be found at 1.3643, 1.3617 and 1.3596. Resistance levels are 1.3690, 1.3711 and 1.3737. USD/JPY: Support levels can be found at 102.65, 102.17 and 101.48. Resistance levels are 103.82, 104.51 and 104.99. For more information please visit: Forex Time