FOMC and trade talks to set the tone for financial markets

US policy action

During the upcoming trading week, the United States economy is heavily in focus as we see the release of the FOMC and the resumption of Sino-US trade talks. The FOMC meeting minutes may shed some light on whether the US central bank will reduce interest rates later this month. Sino-US trade talks are also resuming in Washington DC this week, with expectations low that a trade deal will finally be agreed. The US economy also looks to a scheduled speak from FED Chair Powell and the release of important CPI and PPI inflation data. 

Aside from US data we see the release of the ECB monetary policy meeting accounts, which may also provide an indication as to whether the ECB will reduce interest rate this month and provide further monetary policy stimulus. The Canadian economy also releases important monthly jobs numbers, housing, wage data, and the official unemployment rate.

Monday 7th October, German Factory Orders

German Factory orders are released by the Deutsche Bundesbank and include key data taken from German shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory only has a limited impact on the total eurozone Gross Domestic Product. 

• The EURUSD pair is bearish while trading below the 1.0950 level, key support is found at the 1.0910 and 1.0880 levels.
• If the EURUSD pair trades above the 1.0950 level, buyers will likely test towards the 1.1025 and 1.1100 resistance levels. 

Tuesday 8th October, US Producer Price Index

The US Producer Price Index is released by the Bureau of Labor Statistics and the Department of Labor. PPI measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed by market participants as an indicator of commodity inflation

• The USDJPY pair is bearish while trading below the 107.45 level, key technical support is found at the 106.40 and 105.50 levels.
• If the USDJPY pair trades above the 107.45 level, buyers will likely test towards the 108.00 and 108.80 levels.

Wednesday 9th October, FOMC Meeting Minutes

The Federal Open Market Committee Meeting Minutes gives some of the best insights into the Federal Reserve’s monetary policy decision-making process, and how the Federal Reserve currently thinks about economic developments inside and outside of the United States economy. The FOMC organizes eight meetings in a year to give a clear guide to the future US interest rate policy.

• The GBPUSD pair is bullish while trading above the 1.2300 level, key resistance is found at the 1.2410 and 1.2480 levels.
• If the GBPUSD pair trades below the 1.2300 level, sellers may test towards the 1.2200 and 1.2120 support levels. 

Thursday 10th October, ECB Policy Meeting Accounts

The ECB Monetary Policy Meeting Accounts contain an overview of the current financial market, economic and monetary developments. The meeting accounts provide a summary of the discussion, in an unattributed form, on the economic and monetary analyses and on the monetary policy stance. The accounts also offer a fair and balanced reflection of policy deliberations and also provide the rationale behind monetary policy decisions from the ECB.

• The EURGBP pair is bullish while trading above the 0.8980 level, key resistance is found at the 0.9080 and 0.9150 levels. 
• If the EURGBP pair moves below the 0.8980 level, sellers are likely test towards the 0.8910 and 0.8790 support levels. 

Friday 11th October, Canadian Employment Change

The Canadian employment Change is released by Statistics Canada and shows the measures of change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. A high reading is seen as positive, or bullish for the Canadian Dollar, while a low reading is seen as negative or bearish for the Canadian Dollar.

• The USDCAD pair is only bearish while trading below the 1.3210 level, further losses towards the 1.3150 and 1.3000 levels remains possible.
• If the USDCAD pair trades above the 1.3210 level, buyers are likely to test towards the 1.3315 and 1.3380 resistance levels.