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Feb 4, 2019

Bank of England rate decision and jobs data take center stage

BOE and Brexit

During the upcoming trading week the United Kingdom economy is heavily in focus as the Bank of England decides on interest rates, and British PM Theresa May prepares for crunch talks with European Union negotiators over her newly approved Brexit deal. The Bank of England is widely tipped to keep interest rates on hold at 0.75 per cent and talk up the risks for the United Kingdom economy if a Brexit no-deal scenario occurs.

This week we also see the Reserve Bank of Australia deciding on interest rates and the New Zealand economy releasing key Q4 jobs numbers. The Canadian economy also releases PMI Manufacturing data and important Unemployment and Employment data.

Monday 4th February, USD US Factory Orders

Domestic US manufacturers report Factory Orders in regards to the dollar volume of new orders, shipments, unfilled orders and inventories. Factory Orders provides an intelligible, clear view of the whole US manufacturing sector. More precisely, the new orders figure acts as an indicator of overall demand across industries while Shipments provide a gauge of supply. Unfilled orders and Inventory figures accommodate the balance between orders and shipments.

  • The EURUSD pair is only bullish while trading above the 1.1460 level, further upside towards the 1.1500 and 1.1570 resistance levels seems possible.
  • If the EURUSD pair moves below the 1.1390 level, sellers are likely test towards the 1.1360 and 1.1300 support levels.

Tuesday 5th February, AUD RBA Rate Decision

The Reserve Bank of Australia rate decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to leave the nations interest rate unchanged aged at 1.50% with the central bank’s forward guidance taking on a slightly dovish tone as the Sino-US trade war hurts the commodity-dependent Australian economy.

  • The AUDUSD pair is bullish while trading above the 0.7230 level, key resistance is found at the 0.7380 and 0.7450 levels.
  • If the AUDUSD pair moves below the 0.7230 level, sellers may test towards the 0.7180 and 0.7100 levels.

Wednesday 6th February, NZD New Zealand Employment

New Zealand’s Employment Change is released by Statistics New Zealand and is an important leading indicator that measures the change in the number of people employed in New Zealand. Employment Change is released together with the Unemployment Rate and usually caused significant volatility in the New Zealand dollar after it is released. The nations Employment Change is calculated on a quarterly basis, with most analysts expected New Zealand employment to have increased by 0.5 per cent during the fourth quarter.

  • The NZDUSD pair is bullish while trading above the 0.6840 level, further upside towards the 0.6990 and 0.7050 levels seems likely.
  • If the NZDUSD pair moves below the 0.6840 level, sellers are likely to test towards the 0.6775 and 0.6680 support levels.

Thursday 7th February, GBP BOE Interest Rate Decision

The Bank of England interest is widely expected to maintain rates at 0.75 per cent this week as the BOE Monetary Policy Committee vote unanimously to keep rates on hold in the face of growing Brexit risks. Market participants are likely to focus heavily on the Bank of England monetary policy statement, as it reveals important clues about the central bank’s current thoughts about Brexit, inflation, future rate hikes and the overall UK economy.

  • The GBPUSD pair is only bullish while trading above the 1.3000 level, further upside towards the 1.3200 and 1.3315 resistance levels seems possible.
  • If the GBPUSD pair moves below the 1.3000 level, sellers are likely test towards the 1.2880 and 1.2650 support levels.

Friday 8th February, CAD Canadian Employment Change

The Canadian monthly Employment Change is released by  Statistics Canada and measures the change in the number of people employed in the Canadian economy. If the Canadian monthly Employment Change is better than expected it raises the chances that the Bank of Canada may increase interest rates. A weaker than expected number may cause the Canadian dollar to weaken, as it may force the Bank of Canada to be more cautious.

  • The USDCAD pair is only bullish while trading above the 1.3200 level, further upside towards 1.3310 and 1.3390 levels then remains possible.
  • If the USDCAD pair trades below the 1.3200 level, sellers are likely to test the 1.3070 and 1.2990 support levels.
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