INVESTORS AWAIT FEDERAL RESERVE RATE DECISION AND BREXIT NEWS
US RATE HIKE
During the upcoming trading week the US economy takes center stage as financial market participants await the Federal Reserve interest rate decision. Economists unanimously agree that the Federal Reserve will hike interest rates by at least 25 basis points on Wednesday and signal one more rate increase this year. Investors will await the latest Brexit news after Theresa May’s speech on Friday. We also see a rate decision from the Reserve Bank of New Zealand who are largely expected to keep interest rates unchanged.
We also see inflation data coming from the eurozone and the United States economies and key Gross Domestic Product data being released from the United Kingdom and Canada.
Monday 24th September, GBP BOE Financial Stability Report
The Financial Stability Report, released by the Bank of England, shows the Monetary Policy Committee's assessment of the outlook for the stability and resilience of the financial sector at the time of preparation of the Report, and the policy actions it advises to reduce and mitigate risks to stability. The report takes on particular importance as Brexit uncertainties continue to create headwinds for the UK economy.
- The GBPUSD pair is only bullish while trading above the 1.3113 level, key resistance is found at the 1.3200 and 1.3297 levels.
- If the GBPUSD pair moves below the 1.3070 level, sellers will likely test towards the 1.3000 and 1.2860 support levels.
Tuesday 25th September, USD US Consumer Confidence
United States Consumer Confidence is released by the US Conference Board and measures the level of consumer confidence in American economic activity. The Conference Board index has the largest pooling sample of any United States measure of consumer confidence, the report is a key barometer of the health of the US economy from the perspective of the consumer.
- The USDJPY pair is bullish while trading above the 111.70 level, key resistance is found at the 113.00 and 113.44 levels.
- If the USDJPY pair moves below the 111.70 level, sellers may test towards the 111.37 and 110.90 levels.
Wednesday 26th September, USD FOMC Rate Decision
Federal Open Market Committee members meet eight times per year to decide on monetary policy and where to set the US interest rate. Rate changes impact interest rates for consumer loans, bonds, mortgages and the US dollar's exchange rate, rising interest rates tend to cause the US dollar to appreciate while falling rates cause it to depreciate. The FOMC policy statement is highly anticipated as it includes hints about future policy changes and the FOMC’s collective outlook on the economy.
- The USDCHF pair is bearish while trading below the 0.9780 level, key support is found at the 0.9540 and 0.9480 levels.
- If the USDCHF pair moves above the 0.9780 level, buyers are likely to test towards the 0.9840 and 0.9890 resistance levels.
Thursday 27th September, USD US Annualized GDP
Gross Domestic Products is the market value of all final goods and services from a nation, usually calculated on an annual basis. US GDP annualized is released by the US Bureau of Economic Analysis and is based on quarterly data, most of the components of the report are known in advance, lowering the releases significance and ability to move financial markets. Most economists expect that the United States economy will post a 4.2% annualized Gross Domestic Product number.
- The EURUSD pair is bullish while trading above the 1.1714 level, further upside towards the 1.1802 and 1.1850 resistance levels seems possible.
- If the EURUSD pair moves below the 1.1714 level, sellers are likely test towards the 1.1650 and 1.1617 support levels.
Friday 28th September, US Nonfarm Payrolls Job Report
Canadian Gross Domestic Product is by released by Statistics Canada and measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. The figure is one of the primary indicators of the economic health and is a widely used tool used by economists when determining whether an economy is expanding or contracting.
- The USDCAD pair is bearish while trading below the 1.3070 level, sellers are likely to test towards the 1.2880 and 1.2810 support levels.
- The USDCAD pair in only bullish while trading above the 1.3070 levels, key resistance is found at the 1.3123 and 1.3210 levels.