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!
The dovish Fed, the slowdown in Europe and Brexit were among the things that moved the market last week. Let’s look at this week’s opportunities.
- Rate statement by the Reserve bank of New Zealand (Wed, 03:00 MT (01:00 GMT)) – The rate hike is not expected, but the RBNZ governor Adrian Orr may throw some hints on the possible changes to the central bank’s monetary policy in future.
- Speech by the ECB president Mario Draghi (Wed, 10:00 MT (8:00 GMT)) – The European Central bank’s president Mario Draghi will make his speech at the ECB and Its Watchers conference in Frankfurt. We may expect some supportive comments for the EUR.
- Canadian trade balance (Wed, 14:30 MT (13:30 GMT)) – According to the forecasts, the trade deficit of Canada will likely show less decline, than in the previous month. If the actual figures are greater, the CAD will rise.
- US final GDP q/q (Thu, 14:30 MT (12:30 GMT)) – Analysts expect the American GDP growth to reach 2.4%. If the actual number is higher, the USD will get positive momentum.
- Canadian GDP m/m (Fri, 14:30 MT (12:30 GMT)) – Last time the Canadian GDP growth declined by 0.1%. The projections for this week’s release will be published later. Higher-than-expected actual figures will boost the CAD.
- The Brexit tensions continue this week. After the huge protests in the UK during the weekend, the British prime minister started to lose the support amid the members of her own Cabinet. Today, the British lawmakers will vote on whether to come up with alternatives to the Brexit deal. The votes are expected to start at 00:00 MT time. If this motion is done successfully, lawmakers will take part in a series of indicative votes on Tuesday or Wednesday.
- The trade talks between the US and China will resume this week in Beijing on March 28-29. A breakthrough in the negotiations will bring support to the risk-weighted assets. Up to now, the sides have been optimistic on reaching a deal soon.
- Pay attention to the Boao forum which starts this Tuesday in China. The Chinese officials including Central Bank Governor Yi Gang and Finance Minister Liu Kun are going to speak at the conference. Their comments may affect the risk sentiment in the markets.
- Turkey will hold its local elections on March 31. After the sudden plunge of the Turkish lira on Friday, the officials started investigations into JPMorgan Chase & Co. and other banks. Turkish President Recep Tayyip Erdogan warned that bankers, which responsible for speculating against the currency would be punished.
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.