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Apr 16, 2018

BANK OF CANADA RATE DECISION HEADLINES A BUSY WEEK FOR FINANCIAL MARKETS

BOC AND INFLATION

The Canadian economy comes heavily into focus this week, as we see the release of Canadian Retail Sales and Consumer Price Index data, while the Bank of Canada decide on where to set the nations interest rates. The BOC are widely tipped to keep rates on hold, although the policy statement and monetary report will likely create volatility in the Canadian dollar.

Inflation is also heavily in focus this week, with the Swiss, United Kingdom, Eurozone, Japanese and New Zealand economies all releasing annual and monthly CPI inflation data. We also see Retail Sales and Housing data from the United States economy, whilst the Australian economy releases the RBA Meeting Minutes, and key monthly Employment and Unemployment data.

Monday 16th April, U.S Retail Sales

U.S Retail Sales are expected to slightly increase from the previous month, as the economic recovery in the U.S economy continues. Retail Sales measures the total receipts of retail stores inside the American economy, which appears as the annualized percentage change from the previous month. Retail Sales are seen as an important indicator for investors, as consumer spending is tightly linked with the general health of the U.S economy.

  • The USDJPY pair remains bullish while trading above the 107.00 level, further upside towards 107.80 and 108.45 seems possible.

  • If the USDJPY pair declines below the 107.00 level, sellers may start to test towards the 106.60 and 106.00 support levels.

Tuesday 17th April, Chinese Q1 GDP

China's Gross Domestic Product is released by the National Bureau of Statistics of China and measures the national income and output for the whole economy. GDP is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time. Gross Domestic Product remains the primary indicator of the Chinese economies health.

  • The NZDUSD pair remains bullish while trading above the 0.7310 level, further upside towards 0.7400 and 0.7450 seems possible.

  • If the NZDUSD pair declines below the 0.7310 level, price-action is likely to move towards the 0.7280 and 0.7220 levels.

Wednesday 18th April, BOC Rate Decision

The Bank of Canada Interest Rate Decision is made by the governing council members of the BOC and is focused on where to set the nations interest rate. The Canadian dollar is likely to become volatile before and after the Bank of Canada's decision, as short-term interest rates are the primary factor in a currencies valuation. The BOC also release a policy statement following the decision, which contains the Bank's collective perspective on the economy, and also ideas about future monetary policy.

  • The USDCAD pair is strongly bearish while trading below the 1.2640 level, further downside towards 1.2500 and 1.2430 seems possible.

  • Should the USDCAD pair move above the 1.2640 level, buyers may test towards the 1.2730 and 1.2840 levels.

Thursday 19th April, Australian Unemployment Rate

The Australian Unemployment Rate, release by the Australian Bureau of Statistics, measures the percentage of the total workforce, that is unemployed and actively seeking employment during the previous month. The monthly Unemployment figure has a significant impact on the local currency and stock market, because of the overall importance of employment on the Australian economy.

  • The AUDUSD pair is bullish while trading above the 0.7715 level, weekly resistance is currently found at the 0.7850 and 0.7990 levels.

  • Should the AUDUSD pair move below the 0.7715 level, sellers may test towards the 0.7655 and 0.7610 levels.

Friday 20th April, Canadian CPI Inflation

The Consumer Price Index, released by the Bank of Canada, is a method for measuring inflation. Core CPI excludes energy and food prices, as these prices can be very volatile. It is the most important indicator of inflation for the Canadian economy. An increase in the Consumer Price Index can stimulate the central bank to raise interest rates, with the aim to manage inflation and slow economic growth.

  • The AUDCAD pair remains bearish while trading below the 0.9900 level, further losses towards the 0.9740 and 0.9605 levels seems likely.

  • Should the AUDCAD pair start to trade above the 0.9900 level, further upside towards the 0.9955 and 0.9995 levels remains possible.

 

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