Traders and investors on high alert for global CPI and GDP data
Inflation and growth
During the upcoming week traders and investors look to key Consumer Price Index and Gross Domestic Product data from across the globe for direction. CPI inflation releases from the United Kingdom and Canada will be closely watched by market participants this week. Sterling is likely to react as economists are predicting that United Kingdom CPI inflation saw a strong 0.5 percent uptick last month.
Traders also look to GDP data from Japan and the eurozone, at a time when fears over the new COVID-19 variant in India, which is raising concerns about more global lockdowns. Markets will also be closely focused on the release of the FOMC meeting minutes this week and preliminary PMI manufacturing numbers from the eurozone.
Monday 17th May, Japanese Gross Domestic Product
Japanese 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. Due to the negative effects of COVID-19 economists are predicting that the Japanese economy shrunk by -1.2 percent during the last fiscal quarter.
- The EURJPY pair is only bearish while trading below the 132.00 level, key support is found at the 130.90 and 130.00 levels.
- If the EURJPY pair trades above the 132.00 level, buyers may test towards the 133.80 and 134.90 resistance levels.
Tuesday 18th May, Eurozone Gross Domestic Product
Eurozone Gross Domestic Product is released by Eurostat and is a measure of the total value of all goods and services produced by the Eurozone. GDP is considered as a broad measure of the Eurozone economic activity and health. Economists are predicting that the eurozone economy contracted by 0.6 percent during the first fiscal quarter due to the fact that most of Europe remained in lockdown during the majority of that period.
- The EURUSD pair is only bearish while trading below the 1.2080 level, key support is found at the 1.2080 and 1.1980 levels.
- If the EURUSD pair moves above the 1.2080 level, buyers may test towards the 1.2240 and 1.2344 levels.
Wednesday 19th May, Canadian Consumer Price Index
Canadian Consumer Price Index Core is released by the Bank of Canada. CPI is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The Bank of Canada aims at an inflation range of 1 to 3 percent. Generally speaking, a high CPI reading is seen as anticipatory of a rate hike and is positive for the Canadian dollar.
- The USDCAD pair is only bearish while trading above the 1.2250 level, further losses towards the 1.1960 and 1.1800 levels remain likely.
- If the USDCAD pair trades above the 1.2250 level, buyers may test towards the 1.2340 and 1.2400 resistance levels.
Thursday 20th May, ECB President Lagarde Speech
The European Central Bank President, Christine Lagarde, is set to deliver a scheduled speech to market participants. Traders and investors will be closely monitoring President Lagarde’s comments and latest thoughts on the eurozone economy and the global economy. The euro currency could become more volatile on the foreign exchange market if President Lagarde discusses topics such as bond buying, growth, interest rates, or inflation.
- The EURGBP pair is bullish while trading above the 0.8680 level, key resistance is found at the 0.8740 and 0.8780 levels.
- If the EURGBP pair moves below the 0.8680 level, sellers may test towards the 0.8480 and 0.8360 levels.
Friday 21st May, 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 the total GDP. A reading above 50 indicates expansion in the sector and below 50 indicates contraction.
- The EURCAD pair is only bearish while trading below the 1.4500 level, key support is found at the 1.4420 and 1.4300 levels.
- If the EURCAD pair trades above the 1.4700 level, buyers will likely test towards the 1.4850 and 1.5010 resistance levels.