FOMC POLICY MEETING IS THE MAJOR MARKET THEME THIS WEEK

Central bank policy decisions headline the economic docket this week as the Federal Reserve Open Market Committee, Bank of Japan, and Swiss National Bank all decide on interest rates and monetary policy. The FOMC policy meeting is set to take center stage as the FED outlines its economic projections for United States over the coming months, amidst a growing inflationary environment.

Aside from central bank action, the release of the Consumer Price Index inflation data from the eurozone, United Kingdom, German, and Canadian economies will be closely observed by market participants.

Traders and investors also await UK employment and unemployment figures, retail sales data from the United States, and the release of the Resereve Bank of Australia meeting minutes this week.

Monday 14th June, Japanese Industrial Production

Japanese Industrial Production is released by the Ministry of Economy, Trade and Industry of Japan and measures the outputs of the Japanese factories and mines. Changes in Japanese Industrial production is widely followed by market participants as a major indicator of strength in the nations manufacturing sector. A high reading is seen as bullish for the Japanese yen currrency, whereas a low reading is seen as bearish for the Japanese yen currency.

  • The EURJPY pair is only bearish while trading below the 132.80 level, key support is found at the 131.90 and 130.00 levels.
  • If the EURJPY pair trades above the 132.80 level, buyers may test towards the 133.80 and 134.20 resistance levels.

Tuesday 15th June, RBA Meeting Minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is bearish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate decrease.

  • The AUDUSD pair is only bearish while trading below the 0.7700 level, key support is found at the 0.7600 and 0.7480 levels.
  • If the AUDUSD pair moves above the 0.7700 level, buyers may test towards the 0.7830 and 0.7900 levels.

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Wednesday 16th 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 nations 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 0.9000 level, further losses towards 0.8940 and 0.8850 levels remain possible.
  • If the USDCHF pair trades above the 0.9000 level, buyers are likely to test the 0.9130 and 0.9200 resistance levels.

Thursday 17th June, Eurozone CPI

The Euro Zone CPI released by the Eurostat captures the changes in the price of goods and services. The CPI is a significant way to measure changes in purchasing trends and inflation in the Euro Zone. Generally, a high reading anticipates a hawkish attitude which will be positive or bullish for the euro currency, while a low reading is seen as negative or bearish for the euro currency.

  • The EURUSD pair is only bearish while trading below the 1.2100 level, key support is found at the 1.2000 and 1.1850 levels.
  • If the EURUSD pair moves above the 1.2100 level, buyers will likely test towards the 1.2160 and 1.2250 resistance levels.

Friday 18th June, Bank of Japan Interest Rate Decision

The Bank of Japan Interest Rate Decision is held every calendar month and is announced by the Bank of Japan. Generally, if the central is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive for the yen currency. Likewise, if the central bank has a dovish view on the Japanese economy and keeps the ongoing interest rate it is negative or bearish for the yen.

  • If the USDJPY pair trades above the 108.40 level, buyers may test towards the 109.00 and 109.80 resistance levels.
  • If the USDJPY pair trades below the 108.40 level, sellers may test towards the 107.80 and 107.40 level.


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