Coronavirus and central banks to dictate market moves 12 Mar to 16 Mar – Weekly Analysis

Central bank focus

During the upcoming trading week, traders and investors will focus on the coronavirus and key rate decisions from the FOMC, PBOC, SNB, and the Bank of Japan. Market experts are predicting that the Federal Open Market Committee will cut interest rates dramatically this week. The Bank of Japan is unlikely to cut interest this month, however, the focus will be on additional monetary policy easing from Japanese policymakers.

Other highlights on the economic docket include Chinese Industrial Production, German ZEW data, Australian Monthly Jobs, and US Retail Sales. The United Kingdom also releases key Consumer Inflation, Unemployment, Job Claimant, and Public Sector Net Borrowing data.

Monday 16th March, Chinese Industrial Production

The Chinese Industrial Production Index is released by the National Bureau of Statistics of China and is an economic indicator that measures changes in output for the manufacturing, mining, and utilities. Industrial Production figures are also used by central banks to measure inflation. This month’s figure will be closely observed by traders and investors due to the coronavirus outbreak.

  • The AUDUSD pair is only bullish while trading above the 0.6400 level, key resistance is found at the 0.6515 and 0.6600 levels.
  • If the AUDUSD pair moves below the 0.6400 level, sellers may test towards the 0.6100 and 0.6000 levels.

Tuesday 17th March, German ZEW Survey

The Center for European Economic Research releases the ZEW survey for financial experts across Europe on a monthly basis in order to create a mid-term forecast in regards to Germany’s economic situation. The surveys responses are restricted to positive, negative or unchanged for all components. Due to the simplicity in its structure, the survey is quick and efficient in terms of turnaround time.

  • The EURUSD pair is only bearish while trading below the 1.1170 level, key technical support is found at the 1.1060 and 1.0910 levels.
  • The EURUSD pair is only bullish while trading above the 1.1170 level, key resistance is found at the 1.1260 and 1.1350 levels.

A screenshot of a computer screen Description automatically generated

Wednesday 18th March, 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 banks collective outlook on the economy.

  • The USDCHF pair is only bearish while trading below the 0.9500 level, further losses towards 0.9340 and 0.9130 levels remain possible.
  • If the USDCHF pair trades above the 0.9500 level, buyers are likely to test the 0.9650 and 0.9740 resistance levels.

Thursday 19th March, Bank of Japan Rate Decision

The BOJ Interest Rate Decision is released by the Bank of Japan and is a consensus between the board members on where to set the rate. The members meet once a month for two days to discuss economic developments inside and outside of the country. Changes in the rate have wide consequences, affecting consumer loans, mortgages, bonds and the exchange rate of the Japanese yen currency.

  • The USDJPY pair is only bullish while trading above the 106.40 level, key resistance is found at the 109.00 and 109.90 levels.
  • If the USDJPY pair trades below the 106.40 level, sellers may test towards the 104.50 and 103.00 levels.

Friday 20th March, Canadian Retail Sales

Canadian Retail Sales are released by Statistics Canada and measure the change in the total value of inflation-adjusted sales at the retail level. The figure represents a measure of consumption and consumer confidence. Monthly Retail Sales are an important leading indicator for Canada and are close watches by financial market participants and the Bank of Canada.

  • The USDCAD pair is only bearish while trading below the 1.3300 level, key support is found at the 1.3260 and 1.3200 levels.
  • If the USDCAD pair trades above the 1.3300 level, buyers may test towards the 1.4000 and 1.4100 resistance levels.

Add a comment