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Aug 20, 2018

TRADERS LOOK TO CENTRAL BANK POLICY MAKERS FOR DIRECTION

JACKSON HOLE

During the upcoming trading week, the Jackson Hole Symposium and the European Central Bank interest rate decision take center stage. A host of leading central bank and finance ministers will meet at Jackson Hole to discuss the global economy and monetary policy. The ECB Governing Council will also decide on where to set interest rates this week, while ECB President Mario Draghi will be speaking shortly after the actual rate decision, where he will communicate forward policy guidance to financial market participants and give his latest assessment of the eurozone economy.

This week we also see key Retail Sales data from New Zealand and Japanese economies, eurozone manufacturing data and the Meeting Minutes from the previous RBA and FOMC policy meetings.

Monday 20th August, EUR German Producer Price Index

The German Producer Price Index is released by the Statistisches Bundesamt Deutschland and is an economic index that measures the change in prices received by domestic producers of commodities in all stages of processing. The Producer Price Index is calculated on the basis of a statistical methodology that has been harmonised across all EU member states

  • The EURUSD pair is bearish while trading below the 1.1507 level, key support is found at the 1.1370 and 1.1300 levels.
  • If the EURUSD pair moves above the 1.1507 level, buyers will likely test towards the 1.1553 and 1.1681 resistance levels.

Tuesday 21st August, AUD RBA Meeting Minutes

The Reserve Bank of Australia Monetary Policy Meeting Minutes are published two weeks after the RBA interest rate decision. The RBA Meeting Minutes give a full account of the policy discussion, including factors that influenced policy makers decision and differences of view amongst RBA members.

  • The AUDUSD pair is bullish while trading above the 0.7432 level, key resistance is found at the 0.7450 and 0.7510 levels.
  • If the AUDUSD pair trades below the 0.7380 level, sellers will likely test towards the 0.7290 and 0.7200 levels.

Wednesday 22nd August, USD FOMC Meeting Minutes

The Federal Open Market Committee gives insight into the monetary policy decision-making process of the US central bank and what the Federal Reserve thinks about economic developments inside and outside of the American economy. The FOMC organize eight meetings in a year and give a clear guide to future the United States interest rate policy.

  • The USDJPY pair is bearish while trading below the 110.55 level, further downside towards 110.10 and 109.00 seems likely.
  • If the USDJPY pair moves above the 110.55 level, the price may test towards the 111.00 and 111.52 resistance levels.

Thursday 23rd August, EUR ECB Press Conference

After the ECB interest rate decision is announced, the European Central Bank holds a forty-five-minute press conference, with ECB President Mario Draghi answering questions. The main points of the press conference are inflation and an entire economic overview and examination of the causes of the ECB's interest rate decision. During the conference, President Draghi usually gives important clues related to the future ECB monetary policy.

  • The EURGBP pair is bullish while trading above the 0.8890 level, further upside towards the 0.8965 and 0.9080 resistance levels seems possible.
  • If the EURGBP pair moves below the 0.8890 level, sellers may test towards the 0.8840 and 0.8790 support levels.

Friday 24th August, USD Jackson Hole Symposium

The Jackson Hole Economic Policy Symposium is sponsored by the Federal Reserve Bank of Kansas City and has been held annually since 1978. The event calls upon important central bankers, finance ministers and academics from all around the world. Central bankers will likely turn their focus to the recent troubles in emerging markets and the implications of the United States and China’s ongoing trade dispute.

  • The USDCHF pair is bullish while trading above the 0.9992 level, further upside towards 1.0050 and 1.0098 levels remains possible.
  • If the USDCHF pair trades below the 0.9992 level, sellers are likely to test towards the 0.9950 and 0.9889 resistance levels.
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