Traders and investors await European Central Bank policy decision
During the upcoming week traders and investors look to key interest rate decisions from the European Central Bank and the Bank of Canada for direction. The European Central Bank monetary policy meeting is set to be the highlight of the week for market participants as the eurozone economy is at a critical juncture. The Bank of Canada meeting is also important as Canadian data points have been significantly improving over the last month.
Traders also look to preliminary Purchasers Manufacturing index data from the eurozone and the United States economies. Other highlights on the economic docket this week include the Reserve Bank of Australia meeting minutes, UK Jobs numbers, and a key interest rate decision from the People’s Bank of China.
Monday 19th April, Japanese Industrial Production
Japanese Industrial Production is released by the Ministry of Economy, Trade and Industry of Japan and measures the outputs of the Japanese factories and mines. Changes in Japanese Industrial production is widely followed by market participants as a major indicator of strength in the nations manufacturing sector. A high reading is seen as bullish for the Japanese yen currency, whereas a low reading is seen as bearish for the Japanese yen currency.
- The EURJPY pair is only bearish while trading below the 130.00 level, key support is found at the 128.90 and 127.80 levels.
- If the EURJPY pair trades above the 130.00 level, buyers may test towards the 132.00 and 134.20 resistance levels.
Tuesday 20th April, 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 0.7620 and 0.7480 levels.
- If the AUDUSD pair moves above the 0.7700 level, buyers may test towards the 0.7810 and 0.7860 levels.
Wednesday 21st April, 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 1.2650 level, further losses towards the 1.2460 and 1.2300 levels remain likely.
- If the USDCAD pair trades above the 1.2650 level, buyers may test towards the 1.2750 and 1.2840 resistance levels.
Thursday 22nd April, 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 0.8680 level, key resistance is found at the 0.8720 and 0.8780 levels.
- If the EURGBP pair moves below the 0.8680 level, sellers may test towards the 0.8580 and 0.8520 levels.
Friday 23rd April, 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 1.1890 level, key support is found at the 1.1820 and 1.1700 levels.
- If the EURUSD pair trades above the 1.1800 level, buyers will likely test towards the 1.1950 and 1.2060 resistance levels.