RBA policy meeting and FOMC minutes headline the economic docket
During the upcoming trading week, traders and investors look to the release of the FOMC meeting minutes and the Reserve Bank of Australia rate decision. The FOMC Meeting Minutes is expected to generate market volatility in the US dollar, bonds, and equity markets as the US central bank releases its latest thoughts on the US economy. The Reserve Bank of Australia is expected to keep interest rates on-hold and strike a dovish tone towards the Australian economy due to the increase in domestic COVID-19 infections.
The United States economy also releases Manufacturing, Services, Jobs, and Consumer Credit figures this week. Market participants will also be closely watching the release of the monthly Canadian jobs report, and a raft of high-impacting data points from the United Kingdom economy.
Monday 5th October, UK Services PMI
The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.
- The GBPUSD pair is only bullish while trading above the 1.3100 level, further upside towards the 1.3150 and 1.3300 resistance levels seems possible.
- If the GBPUSD pair trades below the 1.3100 level, sellers are likely to test towards the 1.2650 and 1.2550 support levels.
Tuesday 6th October, RBA Rate Decision
The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to keep interest rates on hold at this meeting, following recent rate cuts and an increase of COVID-19 infections. RBA policymakers are also tipped to strike an overall dovish tone towards the economy and monetary policy.
- The AUDUSD pair is bearish while trading below the 0.7060 level, key support is found at the 0.6880 and 0.6735 levels.
- If the AUDUSD pair moves above the 0.7060 level, buyers may test towards the 0.7180 and 0.7300 levels.
Wednesday 7th October, FOMC Meeting Minutes
The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
- The USDCHF pair is only bearish while trading below the 0.9200 level, further downside towards the 0.9110 and 0.9060 support levels seems possible.
- If the USDCHF pair trades above the 0.9200 level, buyers are likely test towards the 0.9250 and 0.9300 resistance levels.
Thursday 8th October, US Continuing Jobless Claims
US Continuing Jobless Claims is released by the United States Department of Labor measure the number of individuals who are unemployed and are currently receiving unemployment benefits. It presents the strength in the labor market. A rise in this indicator has negative implications for consumer spending which discourage economic growth. Due to the ongoing COVID-19 pandemic the Continuing Jobless Claims number can be quite volatile on a weekly basis.
- The EURUSD pair is only bullish while trading above the 1.1780 level, key resistance is found at the 1.1960 and 1.2000 levels.
- If the EURUSD pair trades below the 1.1780 level, sellers may test towards the 1.1700 and 1.1640 levels.
Friday 9th October, Canadian Employment Change
The Canadian monthly employment Change released by the Statistics Canada is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this key job indicator has positive implications for consumer spending which stimulates economic growth. A high reading is often seen as positive for the Canadian dollar currency, while a low reading is seen as negative or for the Canadian dollar currency.
- The USDCAD pair is only bullish while trading above the 1.3300 level, further upside towards the 1.3400 and 1.3540 resistance levels seems possible.
- If the USDCAD pair trades below the 1.3300 level, sellers are likely to test towards the 1.3200 and 1.3100 support levels.