ECB AND BOJ POLICY MEETINGS HEADLINE A BUSY WEEK FOR FINANCIAL MARKETS
CENTRAL BANKS DECIDE
The European Central Bank and the Bank of Japan take center stage this week, as they decide on where to set interest rates and release key Monetary Policy Statements. Both the ECB and the BOJ are expected to keep interest rates on hold, as global inflation remains largely muted. Any overly dovish or hawkish language from either Central Bank, will almost certainly increase volatility in the euro and Japanese yen currencies.
We also see key first fiscal quarter GDP estimates from the United Kingdom economy, and CPI and PPI inflation data from the Australian economy. The United States economy also releases GDP, Durable Goods Orders, Consumer Sentiment and Core PCE data.
Monday 23rd April, Eurozone Manufacturing PMI
The Manufacturing Purchasing Managers Index, released by the Markit economics, measures the activity level of purchasing managers in the Manufacturing sector across the eurozone. The Manufacturing PMI is an important indicator of business conditions and the overall economic conditions, as the Manufacturing sector represents nearly a quarter of Europe's GDP. A PMI reading above the 50 level indicates expansion, whilst a below 50 reading indicates contraction.
The EURUSD pair is bearish while trading below the 1.2300 level, further losses towards the 1.2210 and 1.2160 levels remains possible.
If the EURUSD pair move above the 1.2300 level, buyers may test towards the 1.2344 and 1.2413 levels.
Tuesday 24th April, Australian Q1 CPI
The Consumer Price Index, reported by the Australian Bureau of Statistics, measures the change in the price of goods and services purchased by consumers. Australia CPI data is calculated on a quarterly basis, and is a key indicator used to measure inflation and changes in purchasing trends. The Reserve Bank of Australia considers CPI one of the most important economic indicators, when deciding where to set interest rates.
The AUDUSD pair is bearish while trading below the 0.7715 level, further losses towards the 0.7610 and 0.7540 levels may occur.
If the AUDUSD pair trades above the 0.7715 level, buyers may test towards the 0.7750 and 0.7812 levels.
Wednesday 25th April, U.S Crude Oil Inventories
U.S Crude Oil Inventories represents the change in the number of barrels of Crude Oil held in inventory, by commercial firms during the past week. There are two sets of inventory data that comprise the crude oil inventory reports, The American Petroleum Institute and The Energy Information Agency. It is important to note that inventory data can occasionally be skewed by holidays and seasonal factors.
WTI Oil remains bullish while trading above the $66.20 level, further upside towards $69.55 and $71.50 seems possible.
Should WTI Oil prices decline below the $66.20 level, losses towards $65 and $63.50 may occur.
Thursday 26th April, ECB Interest Rate Decision
The European Central Bank are expected to keep interest rates on hold at record low-levels on Thursday. The press conference shortly after the Interest Rate Decision will likely create volatility in the euro currency, as ECB head Mario Draghi discuss inflation, and recent eurozone economic data. The Policy Statement will also outline the causes of the ECB's interest rate decision, and give important clues related to future ECB monetary policy.
The EURGBP pair is bullish while trading above the 0.8740 level, further upside towards 0.8810 and 0.8888 seems possible.
If the EURGBP pair declines below the 0.8740 level, sellers may test towards the 0.8700 and 0.8660 levels.
Friday 27th April, BOJ Interest Rate Decision
The Bank of Japan interest rate decision is a consensus between the board members of the BOJ, on where to set the nations interest rate. BOJ members meet once a month for two days, to discuss economic developments inside and outside of Japan. Changes in the rate have wide consequences for the Japanese economy, affecting consumer loans, mortgages, bonds and the exchange rate of the Japanese yen.
The USDJPY pair is bullish while trading above the 107.00 level, further upside towards 107.92 and 108.45 seems possible.
If the USDJPY pair declines below the 107.00 level, sellers are likely to test the 106.60 and 106.00 support regions.