GLOBAL INFLATION DATA AND BREXIT SUMMIT TO DRIVE MARKET ACTION
During the upcoming trading week global inflation data is heavily in focus as we see the release of monthly and annual CPI inflation figures from the Chinese, New Zealand, Eurozone, United Kingdom, Japanese and Canadian economies. Market participants also await a crucial EU Brexit Summit and the release of the FOMC Meeting Minutes, which takes on particular importance as global equity markets are currently selling-off over fears about the Federal Reserve raising rates to fast.
This week we also see the release of important Retail Sales data from the UK and US economies and important Gross Domestic Product figures from the Chinese economy, with most economists predicting that the world’s second-largest economy will show a marked slowdown in economic growth.
Monday 15th October, USD Advanced Retail Sales
US Retail Sales measures the total receipts of retail stores and is provided by the US Census Bureau and appears as the annualized percentage change from the previous month. Consumer spending is closely linked with the general health of the US economy, due to seasonality, the figure tends to volatility. Retail Sales data tends to move the US dollar after being released, primarily due to the importance of consumer spending to the US economy.
- The USDJPY pair is bearish while trading below the 112.55 level, further losses towards 111.50 and 110.60 levels seems likely.
- If the USDJPY pair moves above the 112.55 level, buyers may test towards the 112.90 and 113.30 resistance levels.
Tuesday 16th October, CNY Chinese CPI
The Consumer Price Index, released by the National Bureau of Statistics of China, measures the change in the price level of a market basket of consumer goods and services purchased by Chinese households. The Consumer Price Index is a key indicator that measures inflation and changes in purchasing trends. CPI is one of the most frequently used statistics by central bank policymakers to identifying periods of inflation or deflation.
- The AUDUSD pair is only bullish while trading above the 0.7240 level, key resistance is found at the 0.7310 and 0.7380 levels.
- If the AUDUSD pair stays below the 0.7240 level, sellers will likely test towards the 0.7000 and 0.6930 support levels.
Wednesday 17th October, EUR Eurozone CPI
The eurozone Consumer Price Index, released by Eurostat measures the changes in the price of goods and services from the perspective of the consumer. A higher value of the CPI represents significant inflationary pressures in the eurozone economies and also puts pressure on the European Central Bank to raise interest rates. CPI data may not affect the markets significantly because CPI is the European Central Bank's mandated inflation target.
- The EURUSD pair is only bullish while trading above the 1.1550 level, key resistance is found at the 1.1650 and 1.1730 levels.
- If the EURUSD pair moves below the 1.1550 level, sellers will likely test towards the 1.1500 and 1.1430 support levels.
Thursday 18th October, GBP UK Retail Sales
United Kingdom Retail Sales data is released by the Office of National Statistics and measures the change in the total value of inflation-adjusted sales at the retail level over a stated period. This figure represents an indicator of consumer spending inside the United Kingdom economy. Higher retail sales volume generally shows stronger consumer demand, higher retail output, and economic growth in the United Kingdom economy.
- The GBPUSD pair is only bullish while trading above the 1.3100 level, key resistance is found at the 1.3260 and 1.3350 levels.
- If the GBPUSD pair moves below the 1.3100 level, sellers will likely test towards the 1.3000 and 1.2930 support levels.
Friday 19th October, CAD Canadian Consumer Price Index
The Canadian Consumer Price Index is released by the Statistics Canada and measures the change in the price of goods and services from the perspective of the consumer. It is the most important indicator of inflation in Canada and the key measure of inflation the Bank of Canada watch. An increase or decrease in CPI can stimulate the central bank to raise or lower interest rates in order to manage inflation and economic growth.
- The USDCAD pair remains technically bearish while trading below the 1.3120 level, further losses towards the 1.2990 and 1.2840 levels still remains possible.
- If the USDCAD pair trades above the 01.3120 level, buyers are likely to test towards the 1.3210 and 1.3290 resistance levels.