Markets look to US stimulus and Brexit deal for direction
Traders and investors look to a shortened trading week as the Christmas Holiday season starts to get into full swing this week. Market participants will be intensely focused on the outcome of US stimulus and Brexit talks this week, while the US Gross Domestic Product and Durable Goods Numbers headline the economic calendar.
Attention also turns to the Chinese economy this week as the People’s Bank of China delivers a key interest rate decision. Traders will also be focused on fourth quarter Gross Domestic Product numbers from the United Kingdom economy, and important Core PCE inflation and jobs data from the United States economy.
Monday, 22nd December, PBOC Interest Rate Decision
The PBOC Interest Rate Decision is announced by the People´s Bank of China and a key market moving event that traders and investors pay close attention to. If the PBOC is hawkish about the inflationary outlook of the Chinese economy and rises the interest rates it is generally positive for the Chinese Yuan currency. If the PBOC has a dovish view on the Chinese economy and keeps the ongoing interest rate, or cuts the interest rate it is negative for the Chinese Yuan currency.
- The USDCHF pair is only bearish while trading below the 0.8990 level, further downside towards the 0.8800 and 0.8740 support levels seems possible.
- If the USDCHF pair trades above the 0.8990 level, buyers are likely to test towards the 0.9090 and 0.9200 resistance levels.
Tuesday 22nd December, US Core PCE
The Federal Reserve utilizes a measure of inflation resulting from the PCE as their primary gauge of inflation. A stable Personal Spending figure reflects that consumers are purchasing goods and services, thus spurring output growth and fueling the economy. The report is greatly valued mainly due to its capability of forecasting inflationary pressures. An overall increase of prices may be derived from an excess take in of these high levels of production and consumption.
- The USDJPY pair is bearish while trading below the 104.00 level, further losses towards the 102.50 and 101.50 levels remains possible.
- If the USDJPY pair trades above the 104.00 level, buyers are likely to test the 104.50 and 105.30 resistance levels.
Wednesday 23rd December, US Durable Goods Orders
The Durable Goods Orders is a government report, released by the US Census Bureau which measures consumer spending on long-term purchases, products that are expected to last more than three years. Durable goods are generally sensitive to economic fluctuations because durable products usually involve large investments. Consumers becoming sceptical about economic conditions causes sales of durable goods to be among the first to be affected.
- The GBPUSD pair is only bullish while trading above the 1.3300 level, further upside towards the 1.3650 and 1.3900 resistance levels seems possible.
- If the GBPUSD pair trades below the 1.3300 level, sellers are likely to test towards the 1.3160 and 1.3000 support levels.
Thursday 24th December, Japanese Unemployment Rate
The Japanese Unemployment Rate, which comes from the Ministry of Health, Labour and welfare is officially published by the Japan Statistics Bureau and is a measure of the percentage of unemployed people in Japan. A high unemployment rate indicates weakness in the labour market and is widely considered to influence the strength and overall direction of the Japanese economy. A low unemployment rate is seen as bullish for the Japanese economy, and also positive for the Japanese yen currency.
- The EURUSD pair is only bullish while trading above the 1.2050 level, further gains towards 1.2280 and 1.2330 levels remain likely.
- If the EURUSD pair trades below the 1.2050 level, sellers may test towards the 1.1950 and 1.1890 support levels.
Friday 25th December, Christmas Day Holiday
Bank’s will be closed on Christmas Day across most western nations. Most major stock markets will also be closed on Christmas Day.