FOMC meeting minutes likely to set the market tone

During the upcoming trading week the release of the FOMC Meeting Minutes from the June policy meeting is likely to set the tone for financial markets. Markets participants will likely be anticipating a more hawkish tone from the United States central bank.

Traders and investors also look to an interest rate decision from the Reserve Bank of Australia, with most economists expecting no major changes from the central bank. However, the RBA could sound more bullish after last months strong jobs report from the Australian economy.

The Canadian economy is also in focus this week as we see the release of the Canadian monthly jobs report, which is expected to show a -20,000 headline reading. Other highlights on the economic docket this week include Chinese CPI, Australian Retail Sales, and weekly Jobs data from the US economy.

Monday 5th July, Australian Retail Sales

The Australian Retail Sales report measure the changes in sales of the retail sector in the Australian economy. Percent changes reflect the rate of changes of such sales, and the changes are widely followed by the Resereve Bank of Australia as an indicator of consumer spending. Usually, positive economic growth is bullish for the AUDUSD, while a low reading is seen as negative, or bearish, for the AUDUSD.

  • The AUDNZD pair is only bullish while trading above the 1.0700 level, key resistance is found at the 1.0780 and 1.0850 levels.
  • If the AUDNZD pair moves below the 1.0700 level, sellers may test towards the 1.0650 and 1.0600 levels.

Tuesday 6th July, RBA Interest Rate Decision

The Reserve Bank of Australia Rate Decision is the market interest rate on overnight funds, with the RBA standing as the central monetary authority for the Australian economy. The Reserve Bank of Australia is widely expected to keep interest rates on hold at this meeting, and talk down the Australian dollar currency. RBA policymakers are also tipped to strike a slight more bullish tone towards the economy and monetary policy.

  • The AUDUSD pair is bearish while trading below the 0.7600 level, key support is found at the 0.7400 and 0.7340 levels.
  • If the AUDUSD pair moves above the 0.7600 level, buyers may test towards the 0.7650 and 0.7700 levels.

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Wednesday 7th July, FOMC Meeting Minutes

The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.

  • The EURUSD pair is only bearish while trading below the 1.1890 level, further downside towards the 1.1820 and 1.1770 support levels seems possible.
  • If the EURUSD pair trades above the 1.1890 level, buyers are likely test towards the 1.2000 and 1.2050 resistance levels.

Thursday 8th July, US Continuing Jobless Claims

US Continuing Jobless Claims is released by the United States Department of Labor measure the number of individuals who are unemployed and are currently receiving unemployment benefits. It presents the strength in the labor market. A rise in this indicator has negative implications for consumer spending which discourage economic growth.

  • The GBPUSD pair is only bullish while trading above the 1.3840 level, key resistance is found at the 1.3960 and 1.4000 levels.
  • If the GBPUSD pair trades below the 1.3840 level, sellers may test towards the 1.3790 and 1.3700 levels.

Friday 9th July, Canadian Employment Change

The Canadian Employment report is released by the Statistics Canada and is a measure of the change in the number of employed people in Canada. Generally speaking, a rise in this indicator has positive implications for consumer spending which stimulates economic growth. Therefore, a high reading is seen as positive, or bullish for the Canadian dollar currency, while a low reading is seen as negative or bearish for the Canadian dollar.

  • The USDCAD pair is only bearish while trading below the 1.2300 level, further losses towards the 1.3170 and 1.3100 levels remains possible.
  • If the USDCAD pair trades above the 1.2300 level, buyers are likely to test the 1.2440 and 1.2490 resistance levels.

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