Rates and GDP

During the upcoming week interest rate decisions from the ECB and Bank of Canada, and the release of global growth data headline the economic docket. The ECB rate decision will be closely watched, following the recent release of improving European data points. Gross Domestic Product releases from the Japanese, European, and the United Kingdom economy will also be closely watched by traders and investors.

This week we also see the release Consumer Price Index inflation data from the United States economy, alongside US weekly jobs data. Market participant will also be focused on important inflation, trade, and loans data from the Chinese economy this week.

Monday 7th August, Japanese GDP

The Japanese Gross Domestic Product report is released by the Japanese Cabinet Office, and shows the monetary value of all the goods, services, and structures produced in Japan within a given period of time. GDP is considered a gross measure of market activity because it indicates the pace at which the Japanese economy is growing or decreasing. A high reading or a better than expected number is seen as positive for the Japanese yen currency, while a low reading may be seen as negative for the Japanese yen currency

  • The USDJPY pair is only bullish while trading above the 106.20 level, key resistance is found at the 106.70 and 107.00 levels.
  • If the USDJPY pair moves below the 106.20 level, sellers may test towards the 105.80 and 105.30 levels.

Tuesday 8th August, EU Q2 GDP

Eurozone Gross Domestic Product is released by the Eurostat and is a measure of the total value of all goods and services produced by the Eurozone. GDP is considered as a broad measure of the Eurozone economic activity, and overall health. Usually, a rising trend has a positive effect on the euro currency, while a falling trend is seen as negative for the euro currency.

  • The EURUSD pair is only bearish while trading below the 1.1790 level, key support is found at the 1.1750 and 1.1680 levels.
  • If the EURUSD pair moves above the 1.1790 level, key resistance is found at the 1.1900 and 1.1960 levels.

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Wednesday 9th August, Bank of Canada Rate Decision

The Bank of Canada Interest Rate Decision is announced by the Bank of Canada, and is closely followed by the central banks latest monetary policy statement. If the Bank of Canada is hawkish about the inflationary outlook of the economy, and rises the interest rates it is positive for the Canadian dollar currency. If the central bank has a dovish view on the Canadian economy and keeps the ongoing interest rate it is seen as negative for the Canadian dollar.

  • The USDCAD pair is only bearish while trading above the 1.3300 level, further losses towards the 1.3000 and 1.2890 levels remain likely.
  • If the USDCAD pair trades above the 1.3300 level, buyers may test towards the 1.3400 and 1.3540 resistance levels.

Thursday 10th August, ECB Rate Decision

The European Central Bank’s interest rate decision is made by the ECB Governing Council on whether to either increase, decrease or maintain interest rates. The key mechanism behind the monetary policy is the control of interest rates. After the ECB Interest Rate Decision is announced, the European Central Bank holds a lengthy monthly press conference with ECB President Christine Lagarde  delivering a prepared statement.

  • The EURGBP pair is bullish while trading above the 0.9040 level, key resistance is found at the 0.9110 and 0.9240 levels.
  • If the EURGBP pair moves below the 0.9040 level, sellers may test towards the 0.8840 and 0.8750 levels.

Friday 11th  August, US Consumer Price Index

The Consumer Price Index is released by the US Bureau of Labor Statistics and evaluates fluctuations in the cost of living by measuring the changes in prices consumers pay for a set of items. CPI is used as the headline figure for inflation, which means that the dollar depreciates in value and each dollar is capable of buying fewer goods and services. In terms of inflation measurement, CPI is the most obvious way to quantify fluctuations in purchasing power.

  • The GBPUSD pair is only bearish while trading below the 1.3320 level, key support is found at the 1.3170 and 1.2850 levels.
  • If the GBPUSD pair trades above the 1.3320 level, buyers may test towards the 1.3400 and 1.3510 resistance levels.

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