Central bank action

During the upcoming trading week, traders and investors will be the focus on a key interest rate decisions from the US Federal Open Market Committee. Market experts are predicting that FOMC members will strike a dovish tone towards the United States economic outlook. The FOMC policy decision may see the central bank offering additional policy stimulus measures to fight the negative economic consequences of the coronavirus on the American economy.

Other highlights on the economic docket include United States Inflation, Consumer Confidence, and Jobs data. Traders also look to the GDP figures from the eurozone economy, and OPEC and EU Finance ministers meetings.

Monday 8th June, Japanese CPI

The Japanese Consumer Price Index is released by the Statistics Bureau and measures the change in the price of goods and services from the perspective of the consumer. The CPI is a key indicator that measures inflation and changes in purchasing trends, therefore CPI figures are closely watched by the Bank of Japan. Rise of the Consumer Prices Index may determine the BoJ to increase interest rates in order to manage inflation and slow economic growth.

• The USDJPY pair is only bearish while trading below the 107.90 level, key support is found at the 107.45 and 106.80 levels.
• If the USDJPY pair trades above the 107.90 level, buyers may test towards the 110.00 and 111.00 resistance levels.

Tuesday 9th June, EU Gross Domestic Product

Eurozone Gross Domestic Product is released by Eurostat and is a measure of the total value of all goods and services produced by the Eurozone. EU GDP is the most easily comprehensible mean of measuring the economic output and facilitates key insight in regards to the driving forces of the economy. Because the report lacks in timelines and due to the fact that data on GDP are available beforehand, the GDP figure is generally well anticipated.

• The EURUSD pair is only bullish while trading above the 1.1150 level, key resistance is found at the 1.1400 and 1.1500 levels.
• If the EURUSD pair trades below the 1.1150 level, sellers may test towards the 1.1100 and 1.1020 levels.

Wednesday 10th June, US FOMC rate decision

The Federal Open Market Committee meets eight times per year to decide on United States monetary policy and where to set the nation’s interest rate. Rate changes impact interest rates for US consumer loans, bonds, mortgages, and the US dollar exchange rate. The decision of the FOMC policy statement is usually very important, maybe more important than the actual interest rate move made by the central bank, due to it being highly anticipated by market participants. The policy statement includes hints for the future and contains the central bank’s collective outlook on the economy.

• The USDCHF pair is only bearish while trading below the 0.9640 level, further losses towards 0.9440 and 0.9300 levels remain possible.
• If the USDCHF pair trades above the 0.9640 level, buyers are likely to test the 0.9880 and 0.9990 resistance levels.

Thursday 11th June, US Producer Price Index

The Producer Price Index is released by the Bureau of Labor Statistics, and the Department of Labor. PPI measures changes in the selling prices producers charge for goods and services, and well as tracks how prices feed through the production process. The PPI reading offers a valuable early indicator of inflation because producers tend to pass on higher costs to consumers as higher retail prices. It also gives an image of how higher prices from raw materials flow toward the final product.

• The USDCAD pair is bullish while trading above the 1.3600 level, key resistance is found at the 1.3800 and 1.3950 levels.
• If the USDCAD pair trades below the 1.3600 level, sellers are likely to test towards the 1.3300 and 1.3200 support levels.

Friday 12th June, US Michigan Consumer Sentiment

The Michigan Consumer Sentiment Index is released by the University of Michigan and is a survey of consumer confidence in economic activity. It is an indication of whether or not consumers are willing to spend money. Two versions of this data are released with a two-week difference in between; preliminary and revised. The preliminary data generally has a greater impact.

• The GBPUSD pair is only bearish while trading below the 1.2420 level, key support is found at the 1.2330 and 1.2250 levels.
• If the GBPUSD pair trades above the 1.2420 level, sellers are likely to test towards the 1.2800 and 1.3060 support levels. xx