Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
Markets Ahead of Fed Meeting
- That day has come, guys! The Fed will hold a meeting at 21:00 GMT+3. It can be a highly impactful event. The markets expect the bank to hint about the timing of tapering.
- Fed Chair Jerome Powell holds a press conference at 21:30 GMT+3 which can become the main driver of the market reaction. Dovish comments will press the USD down, while comments about soon tightening will push the USD up. Look how markets reacted last time.
- Concerns over China Evergrande Group’s debt crisis eased. The Hang Seng index has reversed up today and jumped back above 24,000.
- The Bank of Japan kept policy unchanged and reinforced expectations the BOJ will maintain its massive stimulus even as other countries are getting ready for withdrawal of financial support. As a result, the JPY dropped and USD/JPY rocketed above 109.50.
There was no room for USD/JPY to fall: the support line and the lower line of Bollinger Bands were the main barriers. USD/JPY will likely surge to the resistance level of 109.90, where two moving averages and midline of Bollinger Bands lie. The pair will struggle to cross this level, but if it jumps above it, it can rocket to 110.310.
S&P 500, the US broad market index, has reversed up from the 100-day moving average of 4340. Now it’s edging higher to the 50-day moving average of 4440. Support levels are the 100-day MA of 4340 and the low of July 19 at 4280.
GBP/USD has plunged dramatically. Now it has paused near 1.3650, and the RSI indicator signals that the pair has approached the oversold territory. If GBP/USD manages to break the psychological mark of 1.3700, it will jump to late August highs of 1.3760.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.