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Dec 10, 2018

BREXIT VOTE AND ECB MEETING ARE THE KEY MARKET EVENTS TO WATCH

BREXIT AND THE ECB

During the upcoming trading week financial market participants look to a key vote on British PM Theresa May’s proposed Brexit deal inside UK parliament and an interest rate decision from the European Central Bank. The meaningful vote inside UK parliament will have far-reaching implications for the UK economy and the British pound, as a no-vote may see the United Kingdom leaving the EU without a deal in place.

The United States economy is also in focus this week, with Federal Reserve Chair Jerome Powell testifying before US Congress. The world’s largest economy also releases key Retail sales, Consumer Price Index and Producer Price Index data. We also see important Retail Sales and Industrial Production data from the Chinese economy and get rate decisions from the SNB and CBRT.

Monday 10th December, GBP UK Industrial Production

Industrial Production measures the overall output of the energy sector, factories, mines and utilities inside the United Kingdom economy. Industrial Production is highly significant as the industry accounts for one-quarter of overall UK GDP. Due to industrial production accounting for a large part of the volatility of UK GDP, foreknowledge of manufacturing trends can help when predicting UK output.

  • The GBPUSD pair is bearish while trading below the 1.2700 level, key support is located at the 1.2550 and 1.2380 levels.
  • If the GBPUSD pair moves above the 1.2840 level, buyers may test towards the 1.2920 and 1.3100 resistance levels.

Tuesday 11th December, GBP UK Unemployment Rate

The United Kingdom Unemployment Rate is a figure released by the National Statistics and is calculated by dividing the number of out of work individuals in the labour force, by all individuals currently in the labour force. High unemployment generally indicates that an economy is unsatisfying or has a falling gross domestic product and low unemployment may reflect an expanding economy.

  • The EURGBP pair is only bearish while trading below the 0.8790 level, key support is located at the 0.8700 and 0.8650 levels.
  • If the EURGBP pair trades holds the 0.8790 level, further upside towards the 0.9000 and 0.9180 levels remains possible.

Wednesday 12th December, USD US Consumer Price Index

The US Consumer Price Index is released by the US Bureau of Labor Statistics and evaluates the fluctuations in the cost of living by measuring the changes in prices consumers pay for a set of items. In terms of an inflation measurement, the Consumer Price Index is the most obvious way to quantify fluctuations in purchasing power, although the Federal Reserve relies on the PCE Deflator as its primary means to determine whether inflation is occurring.

  • The USDCAD pair is bullish while trading above the 1.3300 level, further upside towards the 1.3445 and 1.3550 levels remains possible.
  • If the USDCAD pair moves below the 1.3300 level, sellers may test towards the 1.3165 and 1.3090 support levels.

Thursday 13th December, EUR ECB Rate Decision

The European Central Bank interest is widely expected to keep interest unchanged this week, at a time when eurozone economic activity remains weak. The ECB will hold a scheduled press conference after the actual ECB interest rate decision, where ECB President Mario Draghi will deliver the Governing Council’s latest assessment of the eurozone economy, and the central bank’s thoughts on future economic and inflation growth.

  • The EURUSD pair is bearish while trading below the 1.1400 level, further losses towards the 1.1216 and 1.1110 support levels seems possible.
  • If the EURUSD pair moves above the 1.1400 level, buyers are likely test towards the 1.1500 and 1.1630 resistance levels.

Friday 14th December, USD United States Retail Sales

US Retail Sales measure the total receipts of retail stores in the United States and is provided by the US Census Bureau and appears as an annualized percentage change from the previous month. The US Retail Sales figure has the ability to move the foreign exchange, equity and bond markets, primarily due to the importance of consumer spending in the United States economy.

  • The USDJPY pair is only bullish while trading above the 112.90 level, further upside towards 113.50 and 114.54 levels remains possible.
  • If the USDJPY pair trades below the 112.90 level, sellers may test the 112.20 and 111.32 support levels.
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