Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
5 important events this week will bring us!
- Retail sales and core retail sales (Wed, 15:30 MT (12:30 GMT)) – According to the forecasts, the headline indicator will increase by 0.3%. At the same time, its core level will advance by 0.2%. Higher-than-expected figures will bring positive momentum to the USD.
- Canadian CPI (Wed, 15:30 MT (12:30 GMT)) – Analysts anticipate the consumer index for Canada to slide by 0.3%. If the actual figures are indeed negative, the CAD will fall. Otherwise, the CAD may be supported.
- Australian employment change and unemployment rate (Thu, 3:30 MT (0:30 GMT)) – The indicator of employment change is expected to show an increase of 15.3 thousand jobs, while the unemployment rate is expected to remain steady at 5.3%. If the actual level of employment change is higher and the unemployment rate is lower than the forecasts, the AUD will move higher.
- European Brexit summit (Thu-Fri) – After the productive talks last week, where the UK Prime Minister Boris Johnson announced that the Brexit deal was achieved, the EU negotiators said that the talks were not enough. The EU wants more concrete decisions on Brexit ahead of the EU Summit this Thursday. If the progress is made, we will follow the updates from the summit to look for the further movements of the GBP. In case of positive news and reaching of the agreement, the GBP will rise.
- Chinese GDP (Fri, 5:00 MT (2:00 GMT)) – The Chinese yuan was supported last week after the progress in US-China trade negotiations made on Friday. Despite that, China required more talks before signing the “Phase One” trade deal, according to Monday’s news. It pulled the risk sentiment down. Besides the news on trade tensions, the risk sentiment may be affected by Chinese GDP growth on Friday. It will be interesting to look at the indicator amid the growing signs of the global slowdown. Higher-than-expected figures will push the risk sentiment up. Therefore, the risk-weighted currencies (AUD, NZD) will go up.
- This week is going to be busy with a lot of earnings reports. Later FBS analysts will present the analysis of the stocks you need to pay attention to this week.
- Turkish lira continues to weaken as the US and Europe threatened the country to impose sanctions over the actions in Syria.
- The new Trump’s tariffs on European imports are expected to be imposed on October 18. These goods will include German coffee, Scotch whiskey, British biscuits, Spanish olives, Italian cheeses, French wines and many more. It may affect the EUR.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.