Huge ahead for financial markets as the FED decide on interest rates

FOMC decide

During the upcoming trading week central bank’s are heavily in focus as we see interest rate decisions from the United States Federal Reserve, Bank of Japan and the Bank of England. The FOMC rate decision is set to be the main market mover for financial markets this week, with expectations high that the central bank will cut interest rates by at least 25 basis points as the United States economy begins to slow and the US dollar strengthens.

Aside from major central bank action, we also the United States economy releasing the ISM Manufacturing, ADP Private Sector and Non-farm payrolls job reports. The eurozone, United States and Australian economies will also release important monthly consumer price index inflation data.

Monday 29th July, USD Dallas FED Manufacturing Survey

The Dallas FED Manufacturing Outlook Survey is a monthly survey where the Dallas Federal Reserve asks firms whether output, employment, orders, prices, and other economic indicators have increased or decreased over the previous month. Key indexes are then calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase.

• The USDCAD pair is only bearish while trading below the 1.3110 level, key support is found at the 1.3090 and 1.3000 levels.
• If the USDCAD pair moves above the 1.3110 level, buyers will likely test towards the 1.3210 and 1.3285 resistance levels.

Tuesday 30th July, JPY BOJ Interest Rate Decision 

The Bank of Japan Interest Rate Decision is released by the Bank of Japan and is a consensus between the central bank’s board members on where to set the rate of interest. The members of the Bank of Japan meet once a month for two days to discuss economic developments inside and outside of the country. Changes in the rate have wide consequences, affecting consumer loans, mortgages, bonds and the exchange rate of the Yen.

• The USDJPY pair is bullish while trading above the 108.45 level, further gains towards 109.00 and 110.00 levels seems likely.
• If the USDJPY pair moves below the 108.45 level, sellers may test towards the 107.90 and 107.50 support levels.

Wednesday 31st July, 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 USDCHF pair is bullish while trading above the 0.9950 level, further gains towards 1.0100 and 1.0150 levels remain likely.
• If the USDCHF pair trades below the 0.9950 level, sellers may test towards the 0.9910 and 0.9845 support levels.

Thursday 1st August, GBP Bank of England Rate Decision

The Bank of England interest rate decision is announced by the Bank of England after close deliberation from the central bank’s monetary policy committee. If the Bank of England is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive for the British pound. If the central bank has a dovish view on the UK economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative for the British pound.

• The GBPUSD pair is bearish while trading below the 1.2440 level, key support is found at the 1.2380 and 1.2350 levels.
• If the GBPUSD pair moves above the 1.2440 level, buyers may test the 1.2525 and 1.2610 resistance levels.

Friday 2nd August, USD  Nonfarm Payrolls Job Report

The NFP job report shows the monthly change in employment in the American economy, excluding the farming sector. Non-farm payrolls is the most carefully observed indicator in the employment situation inside the United States. It is considered the most inclusive calculation of job creation, which causes the Nonfarm Payrolls Job report to become highly significant to market participants, due to the great importance of labour in the United States economy.

• The EURUSD pair is only bearish while trading below the 1.1185 level, further losses towards the 1.1100 and 1.1050 levels remains possible.
• If the EURUSD  pair trades above the 1.1185 level, buyers are likely to test towards the 1.1210 and 1.1310 resistance levels.