Range Markets

During the upcoming week, the Federal Open Market Committee interest rate decision headlines the economic docket. Most economists are expecting that the Federal Reserve will keep interest rates unchanged, and talk down the economic prospects for the United States economy next. Market participants will also be closely following the Bank of England, Bank of Japan, and Swiss National Bank interest rate and decision decisions.

Other important events on the economic calendar this week include the release of the Reserve Bank of Australia Meeting Minutes, United Kingdom Inflation, Wage, and Employment data. Traders and investors will also look to Preliminary EU PMI Manufacturing data and the latest news surrounding Brexit negotiations and US stimulus talks.

Monday 14th December, UK Parliament Brexit Vote

EU Industrial Production is released by the Eurostat and shows the volume of production of Industries such as factories and manufacturing inside the eurozone economy. An uptrend Industrial production is regarded as inflationary, which may generate a positive sentiment towards the euro, while a low Industrial production figure is seen as a negative for the euro currency.

  • The EURUSD pair is only bullish while trading above the 1.2050 level, key resistance is found at the 1.2200 and 1.2280 levels.
  • If the EURUSD pair holds below the 1.2050 level, sellers may test towards the 1.1980 and 1.1900 levels.

Tuesday 15th December, RBA Meeting Minutes

The minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is bearish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate decrease.

  • The AUDUSD pair is only bearish while trading below the 0.7280 level, key support is found at the 0.7200 and 0.7130 levels.
  • If the AUDUSD pair moves above the 0.7280 level, buyers may test towards the 0.7480 and 0.7650 levels.

 Wednesday 16th December 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 nations 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 0.9240 level, further losses towards 0.8900 and 0.8750 levels remain possible.
  • If the USDCHF pair trades above the 0.9240 level, buyers are likely to test the 0.9300 and 0.9450 resistance levels.

Thursday 17th December, 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 labour market and is closely followed by both traders and investors.

  • The USDCAD pair is only bearish while trading below the 1.3000 level, key support is found at the 1.2800 and 1.2700 levels.
  • If the USDCAD pair moves above the 1.3000 level, buyers will likely test towards the 1.3100 and 1.3150 resistance levels.

Friday 18th December, Bank of Japan Rate Decision

The BoJ Interest Rate Decision is announced by the Bank of Japan, where board decide on different policy measures, with the most relevant one, being the interest rate data. An official monetary policy statement is released by the Policy Board of the Bank of Japan. By communicating the committee´s vote outcome regarding interest rates and other policy measures as well as the economic conditions influencing their decision, the statement gives clues about future changes in monetary policy.

  • The USDJPY pair is only bearish while trading below the 104.00 level, key support is found at the 103.80 and 103.20 levels.
  • If the USDJPY pair trades above the 104.00 level, buyers will likely test towards the 104.50 and 105.30 resistance levels.

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