The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
5 important things this week will bring us!
- British CPI y/y (Wed, 11:30 MT time) - The level of inflation for September declined to 2.4% from 2.7% in August. The index dropped because of a slowdown in food, transport, recreation, and closing prices. This month it is expected to reach 2.5%. Will it support the struggling GBP?
- US CPI & core CPI m/m (Wed, 15:30 MT time) – the level of inflation in the United States rose by 0.1% in September, as well as the core inflation excluding energy and food. In October, CPI and core CPI are forecast to come in 0.3% and 0.2% respectively.
- Australian employment change & unemployment rate (Thu, 2:30 MT time) – Australian level of employment increased by 5,600 jobs in September. This release came out lower than expected 15,200 jobs. In October we anticipate Australia to add 20,300 jobs. At the same time, the unemployment rate fell to 5% in September from 5.3% in August. Analyst forecast the level of unemployment to reach 5.1%.If the employment change is higher than expected and the unemployment rate is lower than expected, this will be the good news for the Australia dollar.
- British retail sales m/m (Thu, 11:30 MT time) – UK retail sales fell by 0.8% in September, worse than forecasts of -0.4%. In October, the indicator is expected to increase by 0.1%
- US retail sales & core retail sales m/m (Thu, 15:30 MT time) – As for the US data, last month the level of retail sales came out lower than expected. It rose by 0.1%. This time we expect the indicator to increase by 0.6%. Speaking of core retail sales, it declined by 0.1% in September. In October, the change in sales excluding automobiles is forecast to increase by 0.5%. Higher-than-expected data will support the US dollar.
- The British pound extends falls as the European Union rejected the latest May’s plans for an independent mechanism that would allow Britain to leave from any temporary customer agreement. In addition, 4 British ministers are on verge of quitting Theresa May’s government over Brexit.
- At the beginning of this week, the Italian government prepares to resubmit its draft budget. The target deficit of 2.4% would remain unchanged, however, Italy may set a growth target of 1% instead of a previous target of 1,5%. We will keep an eye on a European Commission deadline on Tuesday.
- During the OPEC+ the plans for cutting the supply in 2019 were announced. OPEC+ would keep inventory in a narrow band and maintain a long-term market balance. It supported oil prices.
Have a successful week of trading!
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
Happy Wednesday, traders! We went through the Internet and found the best news for you, take a look!
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.