Happy Friday, traders! Are you ready to trade at the end of the week? Here’s what you need to know before you start:
Daily news: traders remain optimistic
- The USD index is showing small declines on Friday after a big selloff on Thursday. Support is at 93.20, while resistance is found at 93.90. Demand for the greenback as a safe haven declined. Traders now think that the US-China trade tensions won’t lead to a global economic shock, so they buy higher-yielding riskier currencies like the AUD, the NZD and the CAD.
- Good news for the AUD: S&P Global Ratings revised its outlook on triple-A rated Australia from negative to stable. AUD/USD is at the strong resistance at 0.7300.
- Despite its general weakness, the USD is gaining against the JPY as the yen tends to weaken even more during the periods of market’s optimism. Plus everyone awaits a hawkish meeting of the Federal Reserve next week. Japanese CPI for August came our but didn’t have a visible impact on the market. The Bank of Japan trimmed its purchase of Japanese government bonds today. The central bank is moving away from its extremely loose monetary policy but is doing that in tiny steps. USD/JPY is targeting 113.00. Support is at 112.50.
- EUR/USD moved up and approached 1.1820 with the next resistance at 1.1855 and support at 1.1720. The euro area will publish manufacturing and services PMIs from 10:15 to 11:00 MT time. These are the most recent data that show the region’s economic health. The first releases already came out. French indexes turned out to be weaker than expected. German manufacturing index also slipped. Weak figures provide a reason for downside correction.
- GBP/USD retreated from the resistance at 1.3280. The 2-day summit between the UK and the EU was not a success. European Union leaders rejected the plan of British Prime Minister Theresa May and warned that time is running out for striking a deal. Theresa May promised to come up with fresh plans to break the stalemate in Brexit talks.
- Canada will release CPI and retail sales at 15:30 MT time. The forecast for CPI is negative, while the retail sales indicator, on the contrary, is expected to show better results than last month. USD/CAD is hanging at 1.29. Support is at 1.2860/50. Resistance is at 1.2940.
The first week of November promises to be eventful, as we have the Fed meeting, the BOE update, and the NFP release. Read more details here.
Last week several important economic updates influenced the Forex market. US preliminary GDP fell less than expected (0.6% actual vs. 0.7% forecast). Below you will find the key events to trade on during the week from August 29 to September 2.
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.