What currencies to consider this week…
Weekly Forex Outlook: August 6-10
The week doesn’t have a lot of US data. A PPI figure will be out on Thursday. CPI and Core CPI data will be released on Friday.
The end of the week will be a good time to trade the British pound. GDP, prelim GDP and manufacturing production data will be out on Friday.
Days will be tough for commodity currencies. The Reserve Bank of Australia will release the interest rate on Tuesday. No changes are anticipated but hints on the monetary policy will make the market volatile. On Wednesday, the Governor of the central bank will give a speech about the recent monetary policy. On Friday, the central bank will present the monetary policy statement.
Traders of the New Zealand dollar will get data as well. Inflation expectations figure will be released on Wednesday. The central bank will meet on Thursday. Although the bank isn’t anticipated to change the interest rate this time, the market needs clues on the future monetary policy as risks of the rate cut still exist. Traders will get a chance to trade the Canadian dollar. Employment change and unemployment rate data will be released on Friday.
It’s time to look at the technical side. The US dollar index has been trying to stay above $95. If the economic data are encouraging, the index will break above $95.50. Moreover, on weekends, President Trump defended his use of tariffs, more news on a trade wars escalation will push the index up. Otherwise, the index will return to $95.
The pound needs support as worries around the Brexit deal are growing. According to the UK International Trade Secretary, the Brexit negotiations are more likely to end in failure. Up to now, GBP/USD is moving to the support at 1.2925. More negative comments on the Brexit negotiations will pull the pair further down. If the economic data on Friday are greater than the forecast, the pound will be able to recover. A break above the pivot point at 1.3050 will be a good signal for the pair.
The New Zealand dollar has been trading within the horizontal channel of 0.6685-0.6860. Negative economic data will pull the New Zealand dollar/US dollar pair to the bottom line of the channel. Moreover, MAs signal the continuation of the downward movement. In case of the supportive data, the pair will reach the trendline.