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Nov 7, 2018

CENTRAL BANKS AND US ELECTIONS TAKE CENTER STAGE

RATES AND VOTES

During the upcoming week traders and investors look to interest rate decisions from the US Federal Reserve, Reserve Bank of Australia and the Reserve Bank of New Zealand. The US Federal Reserve is widely expected to pause rate hikes this month after September’s rate increase, while the RBA and RBNZ are likely to maintain rates at current levels and strike a balanced tone towards monetary policy.

US voters will also go to the polls this week for the US mid-term elections, with the result of the mid-terms likely to have a far-reaching impact on global equity markets and the US dollar. This week we also see the release of important PMI services and inflation data from the Chinese economy and retail sales figures from the eurozone economy.

Monday 5th November, GBP United Kingdom Services PMI

The United Kingdom PMI services is released by both Markit Economics and the Chartered Institute of Purchasing and Supply. PMI services measure the economic situation in the UK services sector, which makes up nearly eighty per cent of the United Kingdom’s Gross Domestic Product. UK PMI Services also provide an accurate image of the condition of sales and employment in the UK economy.

  • The GBPUSD pair is only bullish while trading above the 1.2930 level, key resistance is found at the 1.3045 and 1.3100 levels.
  • If the GBPUSD pair moves below the 1.2930 level, sellers will likely test towards the 1.2852 and 1.2700 support levels.

Tuesday 6th November, AUD RBA Rate Decision

The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds and stands as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to leave the nations interest rate unchanged at 1.50% for a twenty-fifth consecutive month.

  • The AUDUSD pair is bullish while trading above the 0.7200 level, key resistance is found at the 0.7240 and 0.7380 levels.
  • If the AUDUSD pair moves below the 0.7200 level, sellers may test towards the 0.7180 and 0.7100 levels.

Wednesday 7th November, NZD RBNZ Rate Decision

The RBNZ Interest Rate Decision, published by the Reserve Bank of New Zealand, represents the Central Bank Governor’s decision concerning where to set the nations interest rate after consulting senior bank staff and external advisers. The RBNZ has kept monetary policy unchanged since November 2016 and is widely tipped to maintain the nations interest rate at 1.75 per cent this week.

  • The NZDUSD pair is bullish while trading above the 0.6650 level, further upside towards the 0.6690 and 0.6750 levels seems likely.
  • If the NZDUSD pair moves below the 0.6590 level, sellers are likely to test towards the 0.6550 and 0.6480 support levels.

Thursday 8th November, USD Federal Reserve Rate Decision

The Federal Open Market Committee members meet eight times per year to decide on monetary policy and where to set the US interest rate. Rate changes impact interest rates for US consumer loans, bonds, mortgages and the US dollar's exchange rate. The FOMC policy statement is highly-anticipated by market participants and includes hints about future US monetary policy and the Federal Reserve’s collective outlook on the economy.

  • The EURUSD pair is only bullish while trading above the 1.1500 level, further upside towards the 1.1550 and 1.1690 resistance levels seems possible.
  • If the EURUSD pair moves below the 1.1500 level, sellers are likely test towards the 1.1300 and 1.1180 support levels.

Friday 9th November, CNY Chinese Consumer Price Index

The Chinese Consumer Price Index, released by the National Bureau of Statistics of China, measures the change in the price level of a market basket of consumer goods and services purchased by households. The Consumer Price Index is a key indicator that measures inflation and changes in purchasing trends. CPI is also one of the most frequently used statistics for identifying periods of inflation or deflation.

  • The USDJPY pair is only bullish while trading above the 112.75 level, further upside towards 113.90 and 114.60 levels remains possible.
  • If the USDJPY pair trades below the 112.75 level, sellers are likely to test the 112.30 and 111.10 support levels.
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