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.
Market updates on July 23
- Yesterday, US President Donald Trump and the Congress reached a deal on the extension of the debt limit and federal spending caps for two years that would avert a government default later this year. The USD got stronger on the announcement. Combined with the priced-in dovish statement by the ECB later this week, the news pulled EUR/USD lower. On H4, EUR/USD has tested the support at 1.1187. If the euro continues its downward movement, the further fall will be limited by the 1.1176 level. After that, the next support will lie at 1.1165. In case of recovery, the pair will face the 1.12 level. If it is broken, we will pay attention to the 1.1211 level and the next resistance at 1.1220.
- GBP/USD has been falling ahead of the results of the Conservative leadership contest, where Boris Johnson is expected to become a prime minister of the UK. The fears that he may leave the EU without a deal affect the British currency negatively. The final announcement will be made around 01:45 MT (22:45 GMT). At the moment, the key levels from the downside on H4 lie at 1.2422, 1.2399 and 1.2345. In case of the surprise victory of Jeremy Hunt, the GBP will get a push to the upside. In this situation, we will see the reversal towards the 1.2475 level. The next key resistance will be placed at 1.2495. (50-period SMA). If bulls are excited enough, there will be a possibility of reaching the border of the downward trendline at 1.2515.
The New Zealand dollar has weakened after the headlines about the new unconventional policy by the Reserve bank of New Zealand. Reportedly, the bank is considering the idea of QE as its next step. On H4, the NZD has been targeting the 50-period SMA. If it slides below this moving average, the first support will lie at 0.6715. After that, the next support will be placed at 0.67. On the other hand, the retest of the 0.6738 level with the following breakout may push the pair higher to the resistance at 0.6757. The next resistance will be placed at 0.6782.
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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.