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.
PMI reports on Wednesday will influence EUR, GBP, and USD
What will happen?
Wednesday will please traders as many economic indicators will be out! The USA, UK, and Euro Area will release PMI reports on June 23 from 10:15 to 16:45 MT. The full schedule is presented in the picture below. What to expect? All the countries are gradually recovering from the Covid-19 pandemic crisis, thus, in general, the figures are getting better and better. However, the UK has tightened the social distancing rules as virus cases continue to rise, so its data can come worse.
How to trade on the PMI reports?
The good thing about these releases is that they are easy to interpret.
- If the actual numbers are better than the forecasted, the currency will rise.
- If the releases disappoint, the currency will fall.
One more tip! Ahead of the release, determine support and resistance levels for the pairs that have the needed currency in them (for example, for EU PMI report – EUR/USD). If the difference between the forecast and the actual number is big, the price will likely break those levels.
Instruments to trade: EUR/USD, EUR/GBP, GBP/USD
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.
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.
The Reserve Bank of Australia (RBA) will make a statement and release a Cash Rate on February 7, 05:30 GMT+2. It's among the primary tools the RBA uses to communicate with investors about monetary policy.
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.