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Sep 17, 2018

TRADERS LOOK TO RATE DECISIONS AND KEY INFLATION DATA

INFLATION AND RATES

During the upcoming trading week, interest rates and inflation are in focus as we see the release of CPI inflation data from the eurozone, United Kingdom, Japanese and Canadian economies. We also see interest rate decisions from the Swiss National Bank and the Bank of Japan, both central banks are expected to leave rates unchanged, with the Bank of Japan policy statement likely to be the key market moving event amongst the two central banks.

This week we also see Retail Sales data from the United Kingdom and Canadian economies and PMI data coming out from the United States and Germany. The RBA releases the Meeting Minutes from this months policy meeting while the New Zealand economy releases key GDP data.

Monday 17th September, EUR Eurozone CPI

The eurozone Consumer Price Index is released by Eurostat and measures the changes in the price of goods and services from the perspective of the consumer. A higher value of the CPI represents growing inflationary pressures in the eurozone and may put pressure on the European Central Bank to raise interest rates. CPI data may not affect the markets significantly because CPI is the European Central Bank's mandated inflation target.

  • The EURUSD pair is only bearish while trading below the 1.1600 level, key support is found at the 1.1528 and 1.1425 levels.
  • If the EURUSD pair trades above the 1.1600 level, buyers will likely test towards the 1.1730 and 1.1850 resistance levels.

Tuesday 18th September, 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 also show differences of view amongst RBA members.

  • The AUDUSD pair is bearish while trading below the 0.7230 level, key support is found at the 0.7130 and 0.7080 levels.
  • If the AUDUSD pair trades above the 0.7230 level, buyers will likely test towards the 0.7290 and 0.7340 levels.

Wednesday 19th September, JPY Bank of Japan Rate Decision

The Bank of Japan Interest Rate Decision is released by the Bank of Japan and is a consensus between the central bank’s board members on where to set the rate. Members meet once a month for two days to discuss economic developments inside and outside of the country. Changes in the rate have wide consequences, affecting consumer loans, mortgages, bonds and also the Japanese yen exchange rate.

  • The USDJPY pair is bullish while trading above the 111.75 level, further gains towards 112.50 and 113.40 levels seem possible.
  • If the USDJPY pair moves below the 111.75 level, sellers may test towards the 111.00 and 110.38 support levels.

Thursday 20th September, CHF Swiss National Bank Rate Decision

The board members of the Swiss National Bank meet on Thursday to decide where to set the target range for the nations interest rate. The Swiss National Bank is obliged by the Constitution and by the national Statute to act in accordance with the interests of the country, by raising rates to control inflation or to reduce interest rates to spur the economic growth in Switzerland.

  • The USDCHF pair is bearish while trading below the 0.9780 level, further losses towards the 0.9600 and 0.9480 support levels seems possible.
  • If the USDCHF pair moves above the 0.9780 level, buyers may test towards the 0.9840 and 0.9890 resistance levels.

Friday 21st September, CAD Canadian Consumer Price Index

The Canadian Consumer Price Index is released by the Statistics Canada and measures the change in the price of goods and services from the perspective of the consumer. It is the most important indicator of inflation in Canada and the key measure of inflation that the Bank of Canada watches. An increase or decrease in CPI can stimulate the central bank to raise or lower interest rates to manage inflation and economic growth.

  • The USDCAD pair is bearish while trading below the 1.3120 level, further losses towards the 1.2990 and 1.2840 levels remains possible.
  • If the USDCAD  pair trades above the 1.3120 level, buyers are likely to test towards the 1.3200 and 1.3290 resistance levels.

 

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