US inflation and retail sales headline the economic docket

Inflation outlook

During the upcoming trading week CPI Inflation and Retail Sales data from the United States economy takes center stage, as traders continue to look for signs of weakness in the world’s largest economy. The US dollar is likely to remain a hot topic with traders and investors this week, as President Trump remains vocal about his dislike of the recent appreciation in the greenback. The United Kingdom economy also releases a host of important data points, including Unemployment, Jobs, Inflation and Consumer spending data.

This week we also see Gross Domestic Product and CPI inflation data from the eurozone economy, and the release of the monthly jobs report from the Australian economy. The Chinese economy also releases Retail Sales and Industrial Production data, at a time when US trade tariffs are starting to harm its domestic economy.

Monday 12th August, USD US Monthly Budget Report

The Financial Management Service issues a Monthly Budget Statement which resumes the financial activities of Federal Reserve Banks, disbursing officers and all federal entities. The difference in value between the Federal's Government income and the expenditure is measured by the Federal Budget Balance on a monthly basis. The release is monitored for large changes and may have an effect on the value of the US dollar.

• The USDJPY pair is bearish while trading below the 106.00 level, key support is found at the 105.00 and 104.60 levels.
• If the USDJPY pair moves above the 106.00 level, buyers may test towards the 106.30  and 107.00 levels.

Tuesday 13th August, GBP UK Unemployment Rate

The United Kingdom Unemployment Rate is key data release issued 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 GBPUSD pair is bearish while trading below the 1.2200 level, key support is found at the 1.2000 and 1.1940 levels.
• If the GBPUSD pair moves above the 1.2200 level, key resistance is found at the 1.2250 and 1.2300 levels.

Wednesday 14th August,  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 inflation data may not affect the markets significantly because CPI inflation is the European Central Bank's mandated inflation target.

• The EURUSD pair is only bearish while trading below the 1.1160 level, key support is found at the 1.1135 and 1.1080 levels.
• If the EURUSD pair trades above the 1.1160 level, buyers will likely test towards the 1.1248 and 1.1320 resistance levels.

Thursday 15th August, AUD Australian Unemployment Rate

The Australian Unemployment Rate is released by the Australian Bureau of Statistics and measures the percentage of the total Australian workforce that is currently unemployed and actively seeking employment during the previous month. The figure usually has a significant impact on the Australian dollar because of the overall importance of employment for the economy.

• The AUDUSD pair is bearish while trading below the 0.6850 level, key support is found at the 0.6750 and 0.6600 levels.
• If the AUDUSD pair moves above the 0.6850 level, buyers may test towards the 0.6910 and 0.6960 levels.

Friday 16th August, USD Michigan Consumer Sentiment 

The Michigan Consumer Sentiment Index is released by the University of Michigan and is a key survey of US consumer confidence in economic activity.  The survey has an impact on the US dollar and equity markets and provides an indication of whether or not consumers are willing to spend money. The preliminary data generally has a greater impact on financial markets. The survey is a compilation of answers from approximately 500 consumers.

• The USDCHF pair is only bullish while trading above the 0.9780 level, key resistance is found at the 0.9810 and 0.9860 levels.
• If the USDCHF pair trades below the 0.9780 level, sellers may test towards the 0.9670  and 0.9580 levels.