Brexit vote and global inflation data under the spotlight

Brexit vote and inflation

During the upcoming trading week we see a crucial vote in UK parliament over British PM Theresa May’s Brexit deal and global inflation data from the United States, eurozone, United Kingdon, Japanese and Canadian economies. The British pound is likely to become the focus of traders attention on Tuesday, as UK MP’s vote on Theresa May’s controversial Brexit deal, with a no-vote heightening the chance of the United Kingdom leaving the European Union without a deal.

This week we also see the release of Retail Sales data from the United States and the United Kingdom and a scheduled speech from European Central Bank President Mario Draghi. President Draghi is set to present the annual ECB report before the European Parliament in Strasbourg and will also be sharing his views about the eurozone economy.

Monday 14th January, CNH Chinese Trade Balance

China’s Trade Balance is released by the General Administration of Customs of the People’s Republic of China and represents the difference between the balance of exports and imports for goods and services. A positive value shows Trade Surplus, while a negative value shows Trade Deficit, the release can also generate volatility for the Chinese Yuan currency. The release is also an important gauge on the effects of the United States administrations trade tariffs on selected Chinese exports.

• The AUDUSD pair is bullish while trading above the 0.7220 level, key resistance is found at the 0.7280 and 0.7340 levels.
• If the AUDUSD pair moves below the 0.7220 level, sellers will likely test towards the 0.7180 and 0.7075 support levels.

Tuesday 15th January, GBP UK Parliamentary vote on Brexit

UK Parliament will finally decide of whether British Prime Minister Theresa May's Brexit plan is valid or not. A no-vote is bearish for the British pound, as the chances of a hard Brexit will increase exponentially, while a yes-vote for PM Theresa May Brexit deal will likely be taken as bullish for the British pound.

• The GBPUSD pair is bullish while trading above the 1.2660 level, key resistance is found at the 1.2895 and 1.3000 levels.
• If the GBPUSD pair trades below the 1.2660 level, sellers will likely test towards the 1.2550 and 1.2420 levels.

Wednesday 16th January, USD United States Retail Sales

US Retail Sales are released by the United States Census Bureau and measures the change in the total value of inflation-adjusted sales at the retail level over a stated time period. This figure represents an indicator of consumer spending inside the United States economy. Higher retail sales figures generally shows stronger consumer spending, which is vital for United States GDP and overall economy.

• The USDJPY pair is only bullish while trading above the 109.00 level, further gains towards 110.10 and 111.30 levels would then seems possible.
• If the USDJPY pair trades below the 109.00 level, sellers may test towards the 107.75 and 107.00 support levels.

Thursday 17th January, EUR Eurozone Consumer Price Index

The eurozone Consumer Price Index, released by Eurostat measures the changes in the price of goods and services from the perspective of the consumer. A higher value of the CPI represents significant inflationary pressures in the eurozone economies and also puts 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 EURGBP pair is bearish while trading below the 0.9000 level, further losses towards the 0.8850 and 0.8730 support levels seems possible.
• If the EURGBP pair moves above the 0.9000 level, buyers may test towards the 0.9045 and 0.9130 resistance levels.

Friday 18th January, 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 the Bank of Canada watch. An increase or decrease in CPI can stimulate the central bank to raise or lower interest rates in order to manage inflation and economic growth.

• The USDCAD pair is bearish while trading below the 1.3290 level, further losses towards the 1.3100 and 1.2990 levels remains possible.
• If the USDCAD  pair trades above the 1.3290 level, buyers are likely to test towards the 1.3355 and 1.3388 resistance levels.