Rate focus

During the upcoming trading week, traders and investors will closely monitor the latest development surrounding the coronavirus and central bank interest action. The ECB interest rate decision is likely to be a market mover, especially if ECB President Lagarde signals more rate cute and QE to fight the economic damage caused to the eurozone economy by the ongoing coronavirus outbreak.

This week we also see the release Consumer Price Index inflation data from the United States, China, and HICP inflation data from the German economy. The release of Gross Domestic Product figures from the eurozone economy will also be closely watched this week.

Monday 9th March, German Trade Balance

The German Trade Talance measures the difference between exports and imports of total goods and services and is released by the Statistisches Bundesamt Deutschland. Germany Trade Balance is one of the largest components of Germany’s Balance of Payment. Due to the German economy being the largest in Europe, trade data provides critical insight into pressures on Euro value.

• The EURGBP pair is only bullish while trading above the 0.8510 level, key resistance is found at the 0.8680 and 0.8780 levels.
• If the EURGBP pair moves below the 0.8510 level, sellers may test towards the 0.8400  and 0.8340 levels.

Tuesday 10th March, EU Q4 GDP

The Eurozone Gross Domestic Product is released by the Eurostat and is a measure of the total value of all goods and services produced by the Eurozone. GDP is considered as a broad measure of the Eurozone economic activity and health. Usually, a rising trend has a positive effect on the euro currency, while a falling trend is seen as negative for the euro currency.

• The EURCAD pair is only bearish while trading below the 1.4880 level, key support is found at the 1.4770 and 1.2900 levels.
• If the EURCAD pair moves above the 1.4880 level, key resistance is found at the 1.5220 and 1.5460 levels.

Wednesday 11th March, 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 an inflation measurement, CPI is the most obvious way to quantify fluctuations in purchasing power.

• The USDCAD pair is only bearish while trading below the 1.3330 level, further losses towards 1.3250 and 1.3200 levels then remain possible.
• If the USDCAD pair trades above the 1.3330 level, buyers are likely to test the 1.3510 and 1.3660 resistance levels.

Thursday 12th March, ECB Rate Decision

The European Central Bank’s interest rate decision is made by the ECB Governing Council on whether to either increase, decrease or maintain interest rates. The key mechanism behind the monetary policy is the control of interest rates. After the ECB Interest Rate Decision is announced, the European Central Bank holds a lengthy monthly press conference with ECB President Mario Draghi delivering a prepared statement.

• The EURUSD pair is bullish while trading above the 1.1170 level, key resistance is found at the 1.1350 and 1.1500 levels.
• If the EURUSD pair moves below the 1.1170 level, sellers may test towards the 1.1100 and 1.1060 levels.

Friday 12th March, German HICP

HICP is an index of consumer prices calculated and published by Destatis, the Statistical Office of the European Union on the basis of a statistical methodology that has been harmonized across all EU member states. HICP is a measure of prices used by the Governing Council of the EU to define and assess price stability in the euro area as a whole in quantitative terms.

• The EURJPY pair is only bearish while trading below the 121.50 level, key support is found at the 120.00 and 119.50 levels.
• If the EURJPY pair trades above the 121.50 level, buyers may test towards the 122.80 and 123.90 resistance levels.