Traders look to more Brexit drama and three key central bank rate decisions
During the upcoming trading week central banks are heavily in focus as we see the US Federal Reserve, Bank of England and Swiss Nation Bank deciding on where to set interest rates. All central banks are expected to keep rates on hold, with the FOMC rate decision and monetary policy statement likely to be the main market event this week. The recent set of weaker than expected economic data releases from the United States economy leave room for the Federal Reserve to turn more dovish, as they adopt a more cautious stance.
Aside from interest rate decisions, the latest news and events surrounding Brexit continue to unfold while the economic calendar remains busy with the release of the Reserve Bank of Australia and Bank of Japan Meeting Minutes. The New Zealand economy also releases key GDP data and we also a raft of high-impact macroeconomic data being released from the United Kingdom economy.
Monday 18th March, EUR Eurozone Trade Balance
The eurozone Trade Balance is the difference in value between imported and exported goods and services over a reported period. A positive number indicates that more goods and services were exported than imported and is known as a trade surplus if the exports exceed imports. The Trade Balance is essential for economists to forecast long-term trends in foreign exchange rates.
- The EURUSD pair is only bearish while trading below the 1.1260 level, key support is found at the 1.1216 and 1.1170 levels.
- If the EURUSD pair moves above the 1.1260 level, buyers will likely test towards the 1.1360 and 1.1410 resistance levels.
Tuesday 19th March, AUD RBA Meeting Minutes
The Reserve Bank of Australia Monetary Policy Meeting Minutes are published two weeks after the RBA interest rate decision. The RBA Meeting Minutes give a full account of the policy discussion, including factors that influenced policy makers decision and differences of view amongst RBA members.
- The AUDUSD pair is bearish while trading below the 0.7130 level, key technical support is found at the 0.7000 and 0.6930 levels.
- If the AUDUSD pair trades above the 0.7130 level, buyers will likely test towards the 0.7180 and 0.7245 levels.
Wednesday 20th March, USD FOMC Rate Interest Decision
The Federal Open Market Committee meets eight times per year to decide on United States monetary policy and where to set the nations interest rate. Rate changes impact interest rates for US consumer loans, bonds, mortgages and the US dollar exchange rate. The decision of the FOMC policy statement is usually very important, maybe more important than the actual interest rate move made by the central bank, due to it being highly anticipated by market participants. The policy statement includes hints for the future and contains the central bank’s collective outlook on the economy
- The USDJPY pair is bullish while trading above the 111.60 level, further gains towards 112.20 and 112.80 levels remain likely.
- If the USDJPY pair trades below the 111.60 level, sellers may test towards the 111.10 and 110.60 support levels.
Thursday 21st March, GBP UK Retail Sales
United Kingdom Retail Sales data is released by the National Statistics Institute and measures the change in the total value of inflation-adjusted sales at the retail level over a stated period. This figure represents an indicator of consumer spending inside the United Kingdom economy. Higher retail sales volume generally shows stronger consumer demand, higher retail output, and economic growth in the United Kingdom economy.
- The GBPUSD pair is bullish while trading above the 1.3200 level, further gains towards 1.3388 and 1.3485 levels seems likely.
- If the GBPUSD pair moves below the 1.3200 level, sellers may test towards the 1.3100 and 1.2975 support levels.
Friday 22nd March, CAD Canadian Consumer Price Index
The Canadian Consumer Price Index is released by 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 number one measure of inflation the Bank of Canada watches. 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 only bearish while trading below the 1.3300 level, further losses towards the 1.3220 and 1.3160 levels remains possible.
- If the USDCAD pair trades above the 1.3300 level, buyers are likely to test towards the 1.3430 and 1.3500 resistance levels.