For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for December 20
The main events from the economic calendar for today are related to Great Britain. At first, we anticipate the release of retail sales at 11:30 MT time. Analysts expect the indicator to increase by 0.3%. After that, at 14:00 MT time the Bank of England will present its monetary policy summary and announce its official bank rate votes. The rate hike is not expected, however, the BOE governor Mark Carney and his colleagues may provide some supportive data for the British pound and suggest some hints for further bank’s decisions in case of a no-deal Brexit. On H4, the British pound has bounced from the strong support at the central pivot at 1.2605. For now, GBP/USD has been gaining towards the resistance at 1.2735. The higher-than-expected level of retail sales, as well as the hawkish BOE, will make the cable rise higher to the 1.2735 level. Otherwise, if the BOE is dovish or the actual level of the retail sales disappoints the investors, the risks of the fall below the 1.2605 support will increase. However, if we look at the technical side, Parabolic SAR shows an uptrend for the pair and both RSI and MACD do not signal the reversal. Let’s look how USD/JPY has been trading after the uncertain Fed comments. The US dollar fell amid the low 10-year treasury yields. As a result, USD/JPY went down significantly, targeting the support at 111.61. If the USD gains back its strength, the pair will move up to the resistance at 112.49. Parabolic SAR shows the USD may continue to weaken.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.