Central bank policy decisions the major market theme this week
Central bank policy decision headline the economic docket this week as the Federal Reserve Open Market Committee, Bank of England, and Bank of Japan all decision on interest rates and monetary policy. The FOMC policy meeting is set to take centre stage as the FED outlines its economic projection for the United States over the coming months. The Bank of Japan meeting to also set to be a big market mover as the central bank has recently stated that they are going to be looking closely at there monetary policy tools.
Aside from central bank action, the release of the RBA Meeting Minutes from the previous policy meeting and Retail Sales data from the United States economy are the main events on the economic docket. Traders also look to CPI inflation data from the Canadian economy and ZEW and GDP figures from the eurozone economy.
Monday 15th March, 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 109.30 and 110.00 levels.
- If the USDJPY pair moves below the 107.00 level, sellers may test towards the 106.80 and 106.50 levels.
Tuesday 16th March, 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 0.7700 level, key support is found at the 0.7500 and 0.7380 levels.
- If the AUDUSD pair moves above the 0.7700 level, buyers may test towards the 0.7930 and 0.8110 levels.
Wednesday 17th March US FOMC rate decision
The Federal Open Market Committee meets eight times per year to decide on United States monetary policy and where to set the nations interest rate. Rate changes impact interest rates for US consumer loans, bonds, mortgages and the US dollar exchange rate. The decision of the FOMC policy statement is usually very important, maybe more important than the actual interest rate move made by the central bank, due to it being highly anticipated by market participants. The policy statement includes hints for the future and contains the central bank's collective outlook on the economy.
- The USDCHF pair is only bearish while trading below the 0.9200 level, further losses towards 0.9140 and 0.9050 levels remain possible.
- If the USDCHF pair trades above the 0.9200 level, buyers are likely to test the 0.9300 and 0.9400 resistance levels.
Thursday 18th March, 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 labour market and is closely followed by both traders and investors.
- The USDCAD pair is only bearish while trading below the 1.2710 level, key support is found at the 1.2500 and 1.2400 levels.
- If the USDCAD pair moves above the 1.2710 level, buyers will likely test towards the 1.2750 and 1.2860 resistance levels.
Friday 19th March, Bank of Japan Interest Rate Decision
The Bank of Japan Interest Rate Decision is held every calendar month and is announced by the Bank of Japan. Generally, if the central is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive for the yen currency. Likewise, if the central bank has a dovish view on the Japanese economy and keeps the ongoing interest rate it is negative or bearish for the yen.
- The EURJPY pair is only bearish while trading below the 129.60 level, key support is found at the 129.00 and 128.50 levels.
- If the EURJPY pair trades above the 129.60 level, buyers may test towards the 131.00 and 131.80 resistance levels.