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Jul 9, 2018

BANK OF CANADA RATE DECISION TAKES CENTER STAGE THIS WEEK

BOC DECIDE

During the upcoming trading week the Bank of Canada interest rate decision takes center, with most market participants expecting that the Canadian central bank will finally hike interest rates. The Bank of Canada faces a tough decision, weighing trade tension concerns between itself and the United States economy, against steadily improving domestic economic growth.

Inflation is also heavily in focus this week, as the Chinese and American economies release key PPI and CPI inflation figures from the month of June. The German economy also releases important ZEW survey data and monthly Consumer Price Index numbers.

Monday 9th July, NZD Electronic Card Retail Sales

Electronic Card Retail Sales as reported by Statistics New Zealand, measures purchases made in New Zealand on debit, credit and store cards. The figure gives a strong indication of the current strength in the retail sector and can influence interest rate decisions. A high number is generally positive for the New Zealand dollar, while a weak number is seen as negative.

  • The NZDUSD pair is bullish while trading above the 0.6782 level, key resistance is found at the 0.6855 and 0.6900 levels.
  • If the NZDUSD pair moves below the 0.6782 level, sellers will likely test towards the 0.6735 and 0.6688 support levels.

Tuesday 10th July, CNY Chinese CPI

The Chinese Consumer Price Index, released by the National Bureau of Statistics of China, measures the change in the price level of a market basket of consumer goods and services purchased by households. CPI is a key indicator that measures inflation and changes in purchasing trends and is one of the most frequently used statistics for identifying periods of inflation or deflation inside the Chinese economy.

  • The AUDUSD pair is bearish while trading below the 0.7460 level, key support is found at the 0.7310 and 0.7230 levels.
  • If the AUDUSD pair moves above the 0.7460 level, buyers may test towards the 0.7510 and 0.7655 levels.

Wednesday 11th July, Bank Of Canada Rate Decision

The Bank of Canada Interest Rate Decision is a decision of the governing council members on where to set the current interest rate. Short term interest rates are the primary factor in currency valuation, and greatly influence the value of the Canadian dollar. The Bank of Canada’s rate statement contains the central bank’s collective perspective on the Canadian economy and also ideas about future monetary policy.

  • The USDCAD pair is bearish while trading below the 1.3123 level, further downside towards 1.3010 and 1.2845 seems likely.
  • If the USDCAD pair moves above the 1.3123 level, buyers are likely to test towards the 1.3220 and 1.3310 resistance levels.

Thursday 12th July, EUR Monetary Policy Meeting Accounts

The Monetary Policy Meeting Account details the latest meeting of the European Central Bank Board, providing valuable indications and in-depth insights into European economic conditions. The Monetary Policy Meeting Accounts also shows the current thinking of European Central Bank’s recent policy decision, such as its stance on inflation and where to set interest rates.

  • The EURUD pair is bullish while trading above the 1.1719 level, further upside towards the 1.1800 and the 1.1851 resistance levels seems possible.
  • If the EURUSD pair moves below the 1.1719 level, sellers will likely test towards the 1.1681 and 1.1618 support levels.

Friday 13th July, CNH Chinese Trade Balance

The Chinese Trade Balance is released by the General Administration of Customs of the People's Republic of China and holds significance this month, due to the trade tensions between the US and Chinese economies. The Trade Balance measures the difference in value between imported and exported goods and services over the reported period. A positive number indicates that more goods and services were exported than imported and is known as a trade surplus if the exports exceed imports.

  • The USDJPY pair is bullish while trading above the 110.25 level, further upside towards 111.41 and 112.20 levels remains possible.
  • If the USDJPY pair declines below the 110.25 level, sellers are likely to test the 109.54 and 109.00 support levels.
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