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.
ECB: what’s next for the euro?
The European Central Bank will meet today to discuss the current monetary policy and the fate of the quantitative easing program. As usual, the event will start with the release of the monetary policy statement and the announcement of the interest rate at 14:45 MT time. After that, there is a press conference at 15:30 MT time.
What to expect?
While the interest rate will most likely remain stable at 0%, the main focus of traders will be on the tone of the ECB President Christine Lagarde and the release of the strategic review. The strategic review will provide us the details on factors and which may have an impact on the future ECB monetary policy decisions. During December’s meeting, the data signaled about stabilization in the GDP growth of the Eurozone. In fact, analysts have already told that the current ECB team is far less dovish than the one headed by Mario Draghi. However, the stimulus program has been left untouched yet. According to the words of Christine Lagarde, the global uncertainties keep being the major issue for Europe. Thus, her words may hurt the euro, if she sees the risks increasing.
The euro levels
EUR/USD has been consolidating on the H4 chart between 1.1094 and 1.1075 levels. If the ECB is hawkish, we expect the breakout of the 1.1094 level and rise towards 1.107. The next key resistance will be placed at 1.1075. On the other hand, the negative comments by the ECB will pull the pair below the 1.1075 level towards the next support at 1.1066. The next key level will be placed at 1.1054.
So, to sum up today you need to:
1) Wait for the updates on the monetary policy;
2) Review the hints on the further easing in the strategic review;
3) Follow the comments by the ECB President Christine Lagarde during the Press Conference;
4) And, of course, press
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Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Every week we expect many interesting events that can shake the market.