2019-11-11 • Updated
A good trader should be prepared for the events which are likely to shake the market. These events can be found in the economic calendar. They offer exciting opportunities to get profit.
Tuesday, March 19
Event
The UK parliament will vote on Prime Minister Theresa May’s Brexit deal for the third time. Last week British lawmakers voted against leaving the EU without a deal and supported a delay to the March 29 exit date.
UPDATE. The speaker of Britain’s parliament said Prime Minister Theresa May’s Brexit deal could not be voted on again unless a different proposal was submitted, so it seems that the delay of Brexit is now the main option.
Impact
The market seems optimistic. Traders mostly believe that a no-deal Brexit will really be averted. Either the British parliament approves the plan of the Prime Minister Theresa May or Brexit itself is postponed for more than a year. The first option will cause a powerful short-term spike up in the pound. The second one will make things more difficult.
The EU leaders will meet at the summit on Thursday to discuss Brexit. If the UK parliament rejects May’s plan for the third time, the extension of the Brexit deadline will be the main topic on the agenda. Of course, the uncertainty remains: all 27 EU member states must agree to a request for a Brexit extension and it will be still not clear when and on what terms Britain will leave. As a result, the rejection of May’s plan can hurt the GBP given the fact that the sentiment has become too optimistic.
Instruments to watch: GBP/USD, EUR/GBP, GBP/JPY
Wednesday, March 20
Event
The US central bank, the Federal Reserve, will meet to set monetary policy. The federal funds rate, the statement and the economic projections will be released at 20:00 MT time. The Fed’s Chair Jerome Powell will hold a press conference at 20:30 MT time.
Impact
During the recent weeks, the Fed has conveyed its position clearly enough: the central bank is in no hurry to raise interest rates. The updated forecasts of the regulator will likely include the expectations of fewer interest rate hikes and slower economic growth. At the same time, it’s necessary to remember that wage growth is at its highest level seen in decades and the labor market is producing the lowest unemployment rate in nearly 50 years. So traders may have overly dovish expectations. The USD will likely trade on the back foot before the meeting but has a chance to recover afterward.
Instruments to watch: EUR/USD, USD/JPY, gold
Thursday, March 22
Event
New Zealand will release economic growth for Q4. In Q3, the country’s GDP rose by only 0.3% slowing down from the 1% q/q growth in Q2.
Impact
According to expectations, the figures can come out on the weaker side as other countries have printed slow growth figures. The consensus forecast is a 0.6% increase in GDP, while the Reserve Bank of New Zealand predicted a 0.8% growth. The main problems include soft manufacturing activity and worse numbers in the labor market.
If the actual reading of New Zealand’s GDP actually disappoints, traders will start thinking that the RBNZ policy should be more accommodative. This will have a negative impact on the NZD.
Instruments to watch: NZD/USD, AUD/NZD, NZD/JPY
Event
The Bank of England will publish the results of its meeting at 14:00 MT time.
Impact
The priced-in possibility that the BoE will raise interest rates by December rose last week from 30% to 40%. Inflation figures might be solid enough for British central bank to think about raising rates in the foreseeable future. However, Governor Mark Carney will have his hands tied until there’s some certainty about Brexit. As a result, we don’t expect the regulator to sound optimistic. That’s why the potential for the pound’s advance on this event is limited.
Instruments to watch: GBP/USD, EUR/GBP
Friday, March 22
Event
The key economies of the euro area will release Purchasing Managers Indexes at 10:15-11:00 MT time.
Impact
So far, the economic picture for the region was rather bleak. Even the ECB has acknowledged it at the latest meeting. German manufacturing sector got hit especially hard. The nation's manufacturing PMI is below the critical 50-point level. Although it may increase, it’s not likely to return above 50 this time.
Nevertheless, you can see that the euro hasn't been that sensitive to the data out of the eurozone in recent weeks and managed to stay afloat versus the USD. Much will depend on the US side of things, but we can assume that unless the European PMIs bring a very big negative surprise, the euro will quickly adapt to the situation and stay supported.
Instruments to watch: EUR/USD, EUR/GBP, EUR/CAD, EUR/AUD
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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Don’t waste your time – keep track of how NFP affects the US dollar and profit!
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