FOMC rate decision is the key market moving event for traders this week
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, Swiss National Bank and the Bank of England. The Federal Reserve rate decision is set to be the main mover for financial markets this week, with expectations high that the central bank will once again cut interest rates, following last months 25 basis point cut.
Economists expect no major policy changes from the Bank of Japan, Swiss National Bank and the Bank of England this week. We also see the UK economy releasing important inflation data, with other highlights on the economic calendar including the Reserve Bank of Australia Meeting Minutes, Australian monthly job numbers, and inflation data from the Japanese and German economies.
Monday 16th September, USD Empire States Manufacturing
The United States Empire State Manufacturing Index measures the level of a diffusion index based on surveyed manufacturers in New York state. It is widely considered a leading indicator of economic health for the American economy. Businesses react quickly to market conditions and changes to the index as sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
- The EURUSD pair is only bearish while trading below the 1.1050 level, key support is found at the 1.1030 and 1.1000 levels.
- If the EURUSD pair trades above the 1.1050 level, buyers will likely test towards the 1.1160 and 1.1210 resistance levels.
Tuesday 17th September, AUD RBA Meeting Minutes
The Reserve Bank of Australia Monetary Policy Meeting Minutes are published two weeks after the Reserve Bank of Australia interest rate decision. The RBA Meeting Minutes give a full account of the policy discussion, including factors that influenced policymakers decision and differences of view amongst RBA members.
- The AUDUSD pair is only bearish while trading below the 0.6800 level, key technical support is found at the 0.6760 and 0.6680 levels.
- If the AUDUSD pair trades above the 0.6800 level, buyers will likely test towards the 0.6880 and 0.6915 levels.
Wednesday 18th September, 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 only bullish while trading above the 0.9850 level, further gains towards 0.9910 and 0.9950 levels remain likely.
- If the USDCHF pair trades below the 0.9850 level, sellers may test towards the 0.9780 and 0.9640 support levels.
Thursday 19th September, 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 only bearish while trading below the 1.2300 level, key support is found at the 1.2290 and 1.2250 levels.
- If the GBPUSD pair holds above the 1.2300 level, buyers may test the 1.2500 and 1.2610 resistance levels.
Friday 20th September, JPY Japanese CPI Inflation
The National Consumer Price Index is released by the Statistics Bureau and measures the change in the price of goods and services from the perspective of the Japanese consumer. CPI inflation is a key indicator that measures inflation and changes in purchasing trends, therefore CPI figures are closely watched by the Bank of Japan. An increase in the Consumer Prices Index may encourage the Japanese central bank to increase interest rates in order to manage inflation and slow economic growth.
- The USDJPY pair is only bearish while trading below the 107.00 level, further losses towards the 106.40 and 106.00 levels remains possible.
- If the USDJPY pair holds above the 107.00 level, buyers are likely to test towards the 108.80 and 109.30 resistance levels.