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Oct 22, 2018

INVESTORS AWAIT CENTRAL BANKS AND MANUFACTURING DATA

BOC HEADLINES

During the upcoming trading week, traders and investors look to interest rate decisions from the Bank of Canada and the European Central Bank. The Bank of Canada is widely expected to hike rates as the Canadian economy powers forward in 2018. The ECB is expected to keep rates on hold and strike a moderate tone towards the eurozone economy, as inflation starts to gradually rise while global risks are now starting to increase into year end.

Manufacturing data is also in also heavily in focus this week, with key PMI Manufacturing numbers being released from the United States and eurozone economies. The United States economy also releases key Trade Balance, Inflation and Gross Domestic Product data this week.

Monday October 22nd, JPY All Industry Activity Index

The All Industry Activity Index released by the Ministry of Economy, Trade and Industry captures the monthly change in overall production by all industries of the Japanese economy. The index indicates the Japanese GDP and the overall growth figures, providing insight into current levels of Japanese economic expansion. Normally, a high reading is seen as positive for the Japanese yen currency, while a low reading is seen as a negative for the Japanese yen.

  • The USDJPY pair is bullish while trading above the 112.55 level, key resistance is found at the 112.75 and 113.20 levels.
  • If the USDJPY pair moves below the 111.90 level, sellers will likely test towards the 111.60 and 110.50 support levels.

Tuesday 23rd October, EUR German PPI

The Producer Price Index is released by the Statistisches Bundesamt Deutschland and measures the average changes in prices inside the German economy. Changes in the Producer Price Index are widely followed, as they provide an indicator of commodity inflation. Generally speaking, a high reading is seen as bullish for the euro currency, whereas a lower reading is seen as bearish for the euro.

  • The EURUSD pair is bearish while trading below the 1.1500 level, key resistance is found at the 1.1630 and 1.1790 levels.
  • If the EURUSD pair moves below the 1.1430 level, sellers may test towards the 1.1380 and 1.1300 levels.

Wednesday 24th October, CAD BOC Rate Decision

The Bank of Canada Interest Rate Decision is a decision of the governing council members on where to set the rate. Most economists have come to a consensus that the Bank of Canada will likely hike interest rates this week. After the actual rate decision has been announced the central bank releases a policy statement that contains the BOC’s collective perspective on the economy also ideas about future monetary policy.

  • The USDCAD pair is bullish while trading above the 1.3123 level, further upside towards the 1.3220 and 1.3290 levels remains.
  • If the USDCAD pair fails to move above the 1.3123 level, sellers are likely to test towards the 1.2990 and 1.2840 support levels.

Thursday 25th October, EUR ECB Press Conference

After the ECB Interest Rate Decision is announced, the European Central Bank holds a lengthy monthly conference with ECB President Mario Draghi delivering a prepared statement. The main points of the conference are inflation, an economic overview and the examination of the causes of the ECB's interest rate decision. During the conference, ECB President Draghi answers questions and gives important clues related to future monetary policy.

  • The EURGBP pair is bullish while trading above the 0.8860 level, further upside towards the 0.8910 and 0.9000 resistance levels seems possible.
  • If the EURGBP pair moves below the 0.8740 level, sellers are likely test towards the 0.8640 and 0.8550 support levels.

Friday 26th October, USD US GDP Annualized

Gross Domestic Products is the market value of all final goods and services from a nation, usually calculated on an annual basis. US GDP annualized is released by the United States Bureau of Economic Analysis and is solely based on quarterly economic data. Strong Gross Domestic Product growth tends to signal that an economy is undergoing a period of economic expansion.

  • The USDCHF pair is strongly bullish while trading above the 1.0000 level, further upside towards 1.0060 and 1.0100 levels remains possible.
  • If the USDCHF pair trades below the 0.9910 level, sellers are likely to test the 0.9840 and 0.9780 support levels.
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