CENTRAL BANKS SET THE TONE FOR MARKETS THIS WEEK

CENTRAL BANK ACTION

During the upcoming trading week, financial market participants look to key interest rate decisions from the Bank of Japan, US Federal Reserve and the Bank of England. All three central banks are expected to keep interest rates unchanged this week, however, recent reports suggest that the Bank of Japan may start to make adjustments to its large-scale asset purchase programme.

Aside from central bank action, we see the release of key monthly jobs data and inflation data from the United States economy. The eurozone economy also releases important CPI data while the Australian economy releases key Employment and Unemployment figures.

Monday 30th July, EUR German Consumer Price Index

CPI is an index that measures the changes in the price of goods and services purchased by consumers and is calculated and published by the Statistisches Bundesamt Deutschland. The German Consumer Price Index remains the main indicator to measure inflation and changes in purchasing trends in Germany. German CPI is released throughout the day because it is comprised of data from six German states which report their CPI numbers throughout the day.

The EURUSD pair is bearish while trading below the 1.1630 level, key support is found at the 1.1540 and 1.1425 levels.
If the EURUSD pair moves above the 1.1630 level, buyers will likely test towards the 1.1680 and 1.1724 resistance levels.

Tuesday 31st July, JPY Bank Of Japan Rate Decision

Japan’s interest rate decision is released by the Bank of Japan and is a consensus among the board members of the BOJ on where to set the nations interest rate. The members meet once a month for two days to discuss economic developments inside and outside of the country. Changes in the rate have wide consequences, affecting consumer loans, mortgages, bonds and the exchange rate of the Yen.

The USDJPY pair is bearish while trading below the 111.00 level, key support is found at the 110.25 and 109.56 levels.
If the USDJPY pair moves above the 111.00 level, buyers may test towards the 111.39 and 112.00 levels.

Wednesday 1st August, US Federal Reserve Rate Decision

The Federal Open Market Committee members meet eight times per year to decide on US monetary policy and where to set the nations interest rate. Rate changes impact interest rates for consumer loans, bonds, mortgages and the US dollar exchange rate. Rising interest rates tend to cause the US dollar currency to appreciate while falling interest rates tend to cause the US dollar currency to depreciate.

The USDCHF pair is bullish while trading above the 0.9910 level, further upside towards the 1.0010 and 1.0075 levels seems likely.
If the USDCHF pair moves below the 0.9910 level, sellers are likely to test towards the 0.9860 and 0.9785 support levels.

Thursday 2nd August, GBP Bank Of England Rate Decision

The Bank of England is expected to keep UK interest rate unchanged this week, at a time when key economic data inside the UK economy has once again started to deteriorate. If the Bank of England is seen as being hawkish about the inflationary outlook of the economy and interest rates, it is generally positive for the British pound. If the BoE is seen as dovish on the UK economy and keeps the ongoing interest rate, or even cuts the interest rate, it is generally negative for the British pound.

The GBPUSD pair is bullish while trading above the 1.3100 level, further upside towards the 1.3205 and 1.3300 resistance levels seems possible.
If the GBPUSD pair moves below the 1.3100 level, sellers are likely to test towards the 1.3030 and 1.2958 support levels.

Friday 3rd August, US Nonfarm Payrolls Job Report

The NFP job report shows the monthly change in employment in the American economy, excluding the farming sector. Non-farm payrolls is the most carefully observed indicator in the employment situation inside the United States. It is considered the most inclusive calculation of job creation, which causes the Nonfarm Payrolls Job report to become highly significant to market participants, due to the great importance of labor in the United States economy.

The USDCAD pair is only bullish while trading above the 1.3123 level, further upside towards 1.3210 and 1.3300 levels remains possible.
If the USDCAD pair continues to trade below the 1.3123 level, sellers are likely to test the 1.3030 and 1.2900 support levels.