- March 23, 2020
- Posted by: Analysis Team
- Category: FOREX, Weekly Analysis
During the upcoming trading week traders and investors look to the releases of key global manufacturing data and key inflation figures. The United Kingdom, eurozone and United States economy all release important PMI Manufacturing data this week. UK, United States, and Japanese inflation figures will also be closely watched this week, alongside GDP figures from the US economy and a key interest decision from the Reserve Bank of New Zealand.
The spread coronavirus is likely to remain a central theme for financial markets this week, as global governments and central banks work hard to stop the negative effects that the outbreak is causing to the global economy.
Monday 23rd March, Eurozone Confidence
Eurozone Consumer Confidence measures the level of consumer confidence in economic activity in the eurozone nations. The reading is formed from a survey of about 2,300 consumers in the eurozone which asks respondents to evaluate future economic prospects. This indicator represents the arithmetic average of the balances of four questions: the financial situation of households, the general economic situation, unemployment expectations, and savings.
- The EURUSD pair is bearish while trading below the 1.0780 level, key support is found at the 1.0650 and 1.0500 levels.
- If the EURUSD pair moves above the 1.0780 level, buyers may test towards the 1.0990 and 1.1130 levels.
Tuesday 24th March, UK Manufacturing PMI
The UK Manufacturing Purchasing Managers Index is released by both the Markit Economics and the Chartered Institute of Purchasing and Supply. The PMI Index measures the activity level of purchasing managers in the manufacturing sector. A reading above 50.0 indicates expansion in the sector and below 50.0 indicates contraction. The Manufacturing PMI is based on a survey of purchasing managers in the manufacturing sector.
- The GBPUSD pair is only bullish while trading above the 1.1950 level, further upside towards the 1.2090 and 1.2200 resistance levels seems possible.
- If the GBPUSD pair trades below the 1.1950 level, sellers are likely to test towards the 1.1410 and 1.1200 support levels.
Wednesday 25th March, US Durable Goods Orders
The Durable Goods Orders is a government report, released by the US Census Bureau which measures consumer spending on long-term purchases, products that are expected to last more than three years. Durable goods are generally sensitive to economic fluctuations because durable products usually involve large investments. Consumers becoming skeptical about economic conditions causes sales of durable goods to be among the first to be affected, as consumers may delay purchases of durable items such as cars and televisions and choose to only spend money on necessities in times of economic hardship.
- The USDCHF pair is only bearish while trading below the 0.9540 level, further downside towards the 0.9410 and 0.9300 support levels seems possible.
- If the USDCHF pair trades above the 0.9540 level, buyers are likely test towards the 0.9710 and 0.9890 resistance levels.
Thursday 26th March, UK Retail Sales
The United Kingdom Retail Sales report is released by the National Statistics and measures the change in the total value of inflation-adjusted sales at the retail level over a stated time period. This figure represents a key indicator of consumer spending. Overall, higher UK retail sales volume shows stronger consumer demand, higher retail output, and more economic growth.
- The EURGBP pair is only bullish while trading above the 0.8955 level, further gains towards 0.9450 and 0.9610 levels remain likely.
- If the EURGBP pair trades below the 0.8955 level, sellers may test towards the 0.8850 and 0.8700 support levels.
Friday 27th March, US Core Price Index
The Federal Reserve utilizes a measure of inflation resulting from the PCE as their primary gauge of inflation. A stable Personal Spending figure reflects that consumers are purchasing goods and services, thus spurring output growth and fueling the economy. The report is greatly valued mainly due to its capability of forecasting inflationary pressures. An overall increase of prices may be derived from an excess take in of these high levels of production and consumption.
- The USDJPY pair is bearish while trading below the 108.00 level, further losses towards the 106.00 and 104.50 levels remains possible.
- If the USDJPY pair trades above the 108.00 level, buyers are likely to test the 111.60 and 113.00 resistance levels.