Inflation watch

During the upcoming trading week, the release of United States Consumer Price Inflation data is the major event on the economic docket that traders and investors will be watching out for. Market participants will be looking for signs of inflation in the US as the American economic outlook appears to be strengthening after recent solid jobs and manufacturing data. The release of US Retail Sales and Consumer Sentiment will also be closely observed this week.

Other highlights on the economic calendar include Chinese GDP data, US Weekly Jobs data, Australian monthly jobs figures, and eurozone retail sales. The Reserve Bank of New Zealand’s interest rate decision and policy statement is also expected to be a market mover this week.

Monday 12th April, EU Retail Sales

The Retail Sales released by Eurostat is a measure of changes in sales of the Eurozone retail sector. It shows the performance of the retail sector in the short term. Percent changes reflect the rate of changes of such sales. The changes are widely followed as an indicator of consumer spending. Usually, positive economic growth is bullish for the EURUSD, while a low reading is seen as negative, or bearish, for the EURUSD.

• The EURUSD pair is only bullish while trading above the 1.1890 level, key resistance is found at the 1.1935 and 1.1970 levels.
• If the EURUSD pair moves below the 1.1890 level, sellers may test towards the 1.1840 and 1.1780 levels.

Tuesday 13th April, US Consumer Price Index

The Consumer Price Index is released by the US Bureau of Labor Statistics and evaluates fluctuations in the cost of living by measuring the changes in prices consumers pay for a set of items. CPI is used as the headline figure for inflation, which means that the dollar depreciates in value and each dollar is capable of buying fewer goods and services. In terms of inflation measurement, CPI is the most obvious way to quantify fluctuations in purchasing power

• The USDCAD pair is only bearish while trading above the 1.2590 level, further losses towards the 1.2500 and 1.2390 levels remain likely.

• If the USDCAD pair trades above the 1.2590 level, buyers may test towards the 1.2650 and 1.2740 resistance levels.

Wednesday 14th April, RBNZ Rate Decision

RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand and is closely followed by the RBNZ policy statement. The RBNZ is not expected to cut interest or raise interest during the April policy meeting as the domestic economy still remains uncertain. If the RBNZ is hawkish about the inflationary outlook of the economy it is positive for the New Zealand dollar. If the RBNZ is dovish towards the inflationary outlook it is generally bearish for the New Zealand dollar.

• The NZDUSD pair is only bearish while trading above the 0.7000 level, further losses towards the 0.6900 and 0.6850 levels remain likely.
• If the NZDUSD pair trades above the 0.7000 level, buyers may test towards the 0.7070 and 0.7140 resistance levels.

Thursday 15th April, US Initial Jobless Claims

US Initial Jobless Claims is released by the US Department of Labor on a weekly basis and is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This figure measures the strength in the United States labor market and is closely followed by both traders and investors.

• The GBPUSD pair is bullish while trading above the 1.3780 level, key resistance is found at the 1.3850 and 1.3900 levels.
• If the GBPUSD pair moves below the 1.3780 level, sellers may test towards the 1.3670 and 1.3560 levels.

Friday 16th April, US Consumer Sentiment

The Michigan Consumer Sentiment Index released by the University of Michigan is a survey of personal consumer confidence in economic activity. It shows a picture of whether or not consumers are willing to spend money. Generally speaking, a high reading anticipates positive for the US dollar currency, while a low reading is seen as negative for the US dollar currency.

• The USDCHF pair is only bearish while trading below the 0.9225 level, key support is found at the 0.9100 and 0.8980 levels.
• If the USDCHF pair trades above the 0.9225 level, buyers may test towards the 0.9330 and 0.9450 resistance levels.