Range Markets

Central bank policy decisions and growth data headline the economic docket this week as the Federal Reserve Open Market Committee and Bank Bank of Japan decide on interest rates and monetary policy, while the US and EU release key growth data. The FOMC policy meeting is set to take center stage, although no major changes are expected from the US central bank this week. Market participants will be listening closely for any taper talk from the FED.

Aside from central bank action, the release of inflation data from the US, Australia, and Europe will be closely watched this week.  Other highlights this week include Canadian retail sales, US Durable Goods, and Manufacturing numbers from the Chinese economy.

Monday 26th April, 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.

  • The GBPUSD pair is only bullish while trading above the 1.3840 level, further upside towards the 1.4010 and 1.4100 resistance levels seems possible.
  • If the GBPUSD pair trades below the 1.3840 level, sellers are likely to test towards the 1.3790 and 1.3750 support levels.

Tuesday 27th April, 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.

  • The EURJPY pair is only bearish while trading below the 129.60 level, key support is found at the 129.00 and 128.50 levels.
  • If the EURJPY pair trades above the 129.60 level, buyers may test towards the 131.00 and 132.80 resistance levels.

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Wednesday 28th April, 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 nation’s 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 bank’s collective outlook on the economy.

  • The USDCHF pair is only bearish while trading below the 0.9200 level, further losses towards 0.9100 and 0.8990 levels remain possible.
  • If the USDCHF pair trades above the 0.9200 level, buyers are likely to test the 0.9240 and 0.9400 resistance levels.

Thursday 29th April, US Initial Jobless Claims

US Initial Jobless Claims is released by the US Department of Labor on a weekly basis and is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits. This figure measures the overall strength in the United States labor market and is closely followed by both traders and investors.

  • The USDCAD pair is only bearish while trading below the 1.2610 level, key support is found at the 1.2350 and 1.2280 levels.
  • If the USDCAD pair moves above the 1.2610 level, buyers will likely test towards the 1.2650 and 1.2750 resistance levels.

Friday 30th April, US Core PCE

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 108.40 level, further losses towards the 107.40 and 106.40 levels remain possible.
  • If the USDJPY pair trades above the 108.40 level, buyers are likely to test the 108.90 and 109.30 resistance levels.

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