Traders and investors await European Central Bank policy decision
During the upcoming week trading investors look to key interest rate decisions from the European Central Bank and the Bank of Canada. The European Central Bank monetary policy meeting is set to be the highlight of the week for traders and investors, as market participants believe that the ECB Governing Council may announce substantial new policy measures to encourage economic growth in the EU economy.
Traders also look to Gross Domestic Product data from the EU and Japanese economies, and the German ZEW economic survey. The United States economy also releases important Inflation, Weekly jobs, and Confidence data. A European Council meeting is also set to take place at the end of the week as the deadline for the United Kingdom to leave the EU is fast approaching.
Monday 7th December, German IFO Survey
The Gross Domestic Product is released by the Cabinet Office and shows the monetary value of all the goods, services and structures produced in Japan within a given period of time. GDP is a gross measure of market activity because it indicates the pace at which the Japanese economy is growing or decreasing. A high reading or a better than expected number is seen as positive for the Japanese yen currency, while a low reading is seen as negative for the Japanese yen currency.
- The EURJPY pair is only bearish while trading below the 124.80 level, key support is found at the 124.00 and 122.80 levels.
- If the EURJPY pair trades above the 124.80 level, buyers may test towards the 126.90 and 128.20 resistance levels.
Tuesday 8th December, Eurozone Quarterly GDP
Eurozone Gross Domestic Product is released by the Eurostat and is a measure of the total value of all goods and services produced by the Eurozone. The quarterly GDP reading is considered to be a broad measure of eurozone economic activity and health. Usually, a rising trend in GDP has a positive effect on the euro currency, while a falling trend has a negative impact on the euro currency.
- The EURUSD pair is only bearish while trading below the 1.2010 level, key support is found at the 1.1950 and 1.1910 levels.
- If the EURUSD pair moves above the 1.2010 level, key resistance is found at the 1.2180 and 1.2280 levels.
Wednesday 10th December, Bank of Canada Rate Decision
The Bank of Canada Interest Rate Decision is announced by the Bank of Canada and is closely followed by the central banks latest monetary policy statement. If the Bank of Canada is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive for the Canadian dollar currency. If the central bank has a dovish view on the Canadian economy and keeps the ongoing interest rate it is seen as negative for the Canadian dollar.
- The USDCAD pair is only bearish while trading above the 1.3150 level, further losses towards the 1.2860 and 1.2700 levels remain likely.
- If the USDCAD pair trades above the 1.3150 level, buyers may test towards the 1.3200 and 1.3300 resistance levels.
Thursday 11th December, ECB Interest Rate Decision
The European Central Bank's interest rate decision is made by the ECB Governing Council on whether to either increase, decrease or maintain interest rates. The key mechanism behind the monetary policy of the ECE is the control of interest rates. After the ECB Interest Rate Decision is announced, the European Central Bank holds a lengthy monthly press conference with ECB President Christine Lagarde, who delivers a prepared statement, and also takes questions from journalists and reporters.
- The EURGBP pair is bullish while trading above the 0.9040 level, key resistance is found at the 0.9300 and 0.9480 levels.
- If the EURGBP pair moves below the 0.9040 level, sellers may test towards the 0.8950 and 0.8720 levels.
Friday 12th December, US Michigan Consumer Sentiment
The Michigan Consumer Sentiment Index is released by the University of Michigan and is a survey of personal consumer confidence in economic activity. Investors pay attention to the survey as it shows a picture of whether or not consumers are willing to spend money. Generally speaking, a high reading anticipates positive for the US dollar, while a low reading is seen as negative for the US dollar.
- The GBPUSD pair is only bearish while trading below the 1.3300 level, key support is found at the 1.3200 and 1.3050 levels.
- If the GBPUSD pair trades above the 1.3300 level, buyers may test towards the 1.3500 and 1.3650 resistance levels.