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May 7, 2018

U.S INFLATION DATA AND RATE DECISIONS FROM THE RBNZ AND BOE IN FOCUS

INFLATION AND INTEREST RATES

United States Inflation data and key interest rate decisions from the Reserve Bank of New Zealand and Bank of England are set to capture financial market participants attention this week. The U.S CPI and PPI Inflation releases will be closely watched, as the Federal Reserve are expected to raise rates at the upcoming June 13th Monetary Policy Decision. The Reserve Bank of New Zealand are expected rates on hold, at 1.75 percent, while the Bank of England may keep rates at current levels after a recent string of softening UK economic data points.

The trading week ahead also sees Inflation numbers from the Swiss economy for the month of April, and key Employment and Unemployment figures from the Canadian economy for the month of April.

Monday 7th May, Swiss CPI Inflation

The Consumer Price Index, released by the Swiss Federal Statistical Office, measures the change in the price of goods and services from the perspective of the consumer. The figure is the main indicator that the SNB uses to measure inflation and changes in purchasing trends in the Swiss economy. Inflation reflects a decline in the purchasing power of the Swiss franc, where each Franc buys fewer goods and services.

  • The USDCHF pair is strongly bullish while trading above the 0.9880 level, further upside towards 1.0010 and 1.0100 appears possible.

  • If the USDCHF pair declines below the 0.9880 level, sellers are likely to test the 0.9800 and 0.9740 support regions.

Tuesday 8th May, German Factory Orders

German Factory orders are expected to increase 0.7 percent during the month of April, which is a marked improvement after a recent slowdown in the German economic data. Factory orders, released by the Deutsche Bundesbank, is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total, may indicate an expansion in the German economy and could be an inflationary factor.

  • The EURUSD pair is strongly bearish while trading below the 1.2000 level, further losses towards the 1.1900 and 1.1750 levels seems possible.

  • If the EURUSD pair moves above the 1.2000 level, buyers may be encouraged to test towards the 1.2055 and 1.2130 levels.

Wednesday 9th May, RBNZ Interest Rate Decision

The Reserve Bank of New Zealand are expected to maintain interest rates at 1.75 percent this week, and strike a more balanced tone towards the economy during the RBNZ Monetary Policy Statement. The RBNZ Interest Rate Decision, published by the Reserve Bank of New Zealand, represents the Bank's decision concerning where to set the nations rate after consulting senior bank staff and external advisers.

  • The NZDUSD pair is bearish while trading below the 0.7100 level, further losses towards 0.6930 and 0.6850 levels seems possible.

  • If the NZDUSD pair moves above the 0.7100 level, further upside towards the 0.7150 and 0.7220 resistance levels may occur.

Thursday 10th May, U.S CPI Inflation

Economists are forecasting a slight tick down in year-on-year U.S CPI inflation during the month of April, with a 1.9 percent increase. The U.S Consumer Price Index is released by the Bureau of Labor statistics, and measures price movements by comparison between the retail prices of a representative basket of goods and services. The United States Consumer Price Index also tracks how prices feed through the production process.

  • The USDJPY pair is only bullish while trading above the 109.30 level, further upside towards the 110.03 and 100.45 levels appears possible.

  • If the USDJPY pair declines below the 109.30 level, sellers are likely to test the 108.50 and 107.85 support regions.

Friday 11th May, Canadian Employment Change

Monthly employment in the Canadian economy is expected to increase less than the previous month, with a 20,000 increase in the Canadian employment situation. Employment Change is released monthly by the Statistics Canada, and measures the change in the number of people employed in Canada. A rise of employment, consumption and expenditures may lead to increased inflationary pressures, which could encourage central the Bank of Canada to tighten monetary policy.

  • The USDCAD pair is bullish while trading above the 1.2850 level, further upside towards the 1.2910 and 1.2980 levels appears possible.

  • If the USDCAD pair decline below the 1.2800 level, further losses towards 1.2740 and 1.2690 may occur.

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