Traders await the release of central bank meeting minutes
During the upcoming week traders are expected to take direction from the release of the Federal Open Market Committee, and Reserve Bank of Australia Meeting Minutes. Most economists are expecting the FOMC Meeting Minutes to remain hawkish, following mixed US economic data, and rising COVID-19 infection in the United States. The Reserve Bank of Australia Meeting Minutes is also expected to confirm the central banks bias for low interest rate and loose fiscal policy.
Inflation data is also on traders radar this week, with the United Kingdom, European, and Canada economies all releasing important Consumer Price Index numbers. The United States economy also releases important Manufacturing, Services, Jobs, and Housing data this week.
Monday 17th August, US Empire State Survey
The Empire State Manufacturing Index measures the level of a diffusion index based on surveyed manufacturers in New York state. The index is often considered a leading indicator of the overall health of the United States economy. Businesses react quickly to market conditions, and changes in their sentiment can be an early signal of future economic activity such as spending, hiring, and investment.
- The USDJPY pair is only bullish while trading above the 107.00 level, key resistance is found at the 107.30 and 108.00 levels.
- If the USDJPY pair moves below the 107.00 level, sellers may test towards the 106.00 and 105.00 levels.
Tuesday 18th August, RBA Meeting Minutes
The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is bearish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate decrease.
- The AUDUSD pair is only bearish while trading below the 0.7100 level, key support is found at the 0.7000 and 0.6880 levels.
- If the AUDUSD pair moves above the 0.7100 level, buyers may test towards the 0.7230 and 0.7310 levels.
Wednesday 19th August, UK Consumer Price Index
The United Kingdom Consumer Price Index is released by the National Statistics and measures the change in the price of goods and services from the perspective of the consumer. CPI is a key indicator that measures inflation and changes in purchasing trends, therefore CPI figures are closely watched by the Bank of England. A rise in the Consumer Prices Index may determine whether the Bank of England increases interest rates in order to manage inflation and slow economic growth.
- The GBPUSD pair is only bearish while trading below the 1.3030 level, further losses towards the 1.2950 and 1.2850 levels remain likely.
- If the GBPUSD pair trades above the 1.3030 level, buyers may test towards the 1.3100 and 1.3200 resistance levels.
Thursday 20th August, US Initial Jobless Claims
US Initial Jobless Claims is released by the US Department of Labor on a weekly basis, and is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This figure measures the overall strength in the United States labor market, and is closely followed by both traders and investors.
- The USDCAD pair is only bearish while trading below the 1.3310 level, key support is found at the 1.3230 and 1.3000 levels.
- If the USDCAD pair moves above the 1.3310 level, buyers will likely test towards the 1.3350 and 1.3390 resistance levels.
Friday 21st August, EU Manufacturing PMI
The EU Manufacturing Purchasing Managers Index is released by Markit Economics and measures the activity level of purchasing managers in the manufacturing sector. The manufacturing PMI is an important indicator of business conditions and the overall economic condition in the eurozone because the manufacturing sector represents nearly a quarter of total GDP. A reading above 50 indicates expansion in the sector and below 50 indicates contraction.
- The EURUSD pair is only bearish while trading below the 1.1700 level, key support is found at the 1.1650 and 1.1600 levels.
- If the EURUSD pair trades above the 1.1700 level, buyers will likely test towards the 1.1960 and 1.2000 resistance levels.