Markets look to global inflation and Chinese GDP data for direction (Oct 14 – 20)

Inflation and GDP

During the upcoming trading week traders and investors look to the release of global inflation and Chinese Gross Domestic Product Data for direction. The eurozone, UK, Swiss, New Zealand, Canadian and Japanese economies all release important Consumer Price Index data for the month of September. Chinese GDP is also being released this week, with most economists predicting that Chinese economy expanded by 6.1 percent during the last fiscal quarter.

The Australian economy releases its monthly jobs report and the RBA Meeting Minutes, while the United States economy releases important Retail Sales, Housing, Industrial Production data.

The UK economy is also in focus this week, as it releases key Retail Sales, Earnings and, Unemployment and Employment figures from last month

Monday 14th October, Eurozone Industrial Production

Eurozone Industrial Production measures the volume of production of industries like factories and manufacturing inside the European economy. Tracking industrial production is very important for forecasting GDP changes, most variations in GDP come from the industrial sector. The industrial production figure can be adjusted considering the number of working days in the given time period to account for possible connected changes within production.

  •  The EURGBP pair is only bullish while trading above the 0.8850 level, key resistance is found at the 0.8900 and 0.8940 levels.
  • If the EURGBP pair moves below the 0.8850 level, sellers may test towards the 0.8710  and 0.8650 levels.

Tuesday 15th October, RBA Meeting Minutes

The Reserve Bank of Australia Monetary Policy Meeting Minutes are published two weeks after the Reserve Bank of Australia interest rate decision. The RBA Meeting Minutes give a full account of the policy discussion, including factors that influenced recent monetary policy decisions and differences of view amongst RBA members.

  • The AUDUSD pair is only bearish while trading below the 0.6780 level, key technical support is found at the 0.6750 and 0.6660 levels.
  • If the AUDUSD pair trades above the 0.6780 level, buyers will likely test towards the 0.6880 and 0.6920 levels.

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Wednesday 16th October, UK Consumer Price Index

The United Kingdom Consumer Price Index is released by the National Statistics and measures the change in the price of goods and services from the perspective of the consumer. CPI is a key indicator that measures inflation and changes in purchasing trends, therefore CPI figures are closely watched by the Bank of England. A rise in the Consumer Prices Index may determine whether the Bank of England increases interest rates in order to manage inflation and slow economic growth.

  • The GBPUSD pair is only bearish while trading above the 1.2480 level, further losses towards the 1.2365 and 1.2300 levels remain likely.
  • If the GBPUSD pair trades above the 1.2480 level, buyers may test towards the 1.2720 and 1.2850 resistance levels.

Thursday 17th October, Australian Jobs Report

The Employment Change is released by the Australian Bureau of Statistics and measures the change in the number of employed people in Australia. 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 for the Australian dollar, while a low reading is seen as negative for the Australian dollar.

  • The AUDNZD pair is only bearish while trading below the 1.0725 level, key support is found at the 1.0650 and 1.0500 levels.
  • If the AUDNZD pair moves above the 1.0725 level, buyers will likely test towards the 1.0770 and 1.0830 resistance levels.

Friday 18th October, Chinese GDP

Chinese Gross Domestic Product is released by the National Bureau of Statistics of China and measures the national income and output for a given country’s economy. GDP is equal to the total expenditures for all final goods and services produced within the country in a stipulated period of time. It is also considered a strong indicator of the health of the entire global economy.

  • The USDJPY pair is only bearish while trading below the 107.90 level, key support is found at the 107.45 and 0106.95 levels.
  • If the USDJPY pair trades above the 107.90 level, buyers may test towards the 108.88 and 109.50 resistance levels.

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