Range Markets

During the upcoming trading week market participants look to the release of global manufacturing and inflation data for direction. Traders will be closely watching the release of last month’s manufacturing PMI numbers from the United Kingdom, the United States, and EU economies. Traders will also be looking to key inflation numbers from the Japanese and United States economies.

Other highlights on the economic calendar include interest rate decisions from the People’s Bank of China and the Reserve Bank of New Zealand. Policy action from either central bank may result in volatility in the Chinese yuan or the New Zealand dollar currency.

Monday 22nd June, PBOC rate decision

The PBOB Interest rate decision is announced by the People´s Bank of China. If the central bank is hawkish about the inflationary outlook of the economy and raises the interest rates, it is seen as positive for the China Yuan currency. If the PBOC has a dovish view on the Chinese economy and keeps the ongoing interest rate, it is likely to be seen as bearish for the Yuan currency by market participants.

  • The USDJPY pair is bearish while trading below the 107.00 level, further losses towards the 105.50 and 104.50 levels remains possible.
  • If the USDJPY pair trades above the 107.00 level, buyers are likely to test the 108.60 and 110.00 resistance levels.

Tuesday 23rd June, EU Manufacturing PMI

The EU Manufacturing Purchasing Managers Index is released by Markit Economics and measures the activity level of purchasing managers in the manufacturing sector. The manufacturing PMI is an important indicator of business conditions and the overall economic condition in the eurozone because the manufacturing sector represents nearly a quarter of total GDP. A reading above 50 indicates expansion in the sector and below 50 indicates contraction.

  • The EURUSD pair is only bearish while trading below the 1.1150 level, key support is found at the 1.1070 and 1.1000 levels.
  • If the EURUSD pair trades above the 1.1150 level, buyers will likely test towards the 1.1200 and 1.1240 resistance levels.

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Wednesday 24th June, RBNZ Rate Decision

The Reserve Bank of New Zealand rate recision is the market interest rate on overnight funds, with the RBNZ standing as the central monetary authority for the New Zealand economy. The Reserve Bank of New Zealand is widely expected to keep interest rates on hold at this meeting, following recent rate cuts. RBNZ policymakers are also tipped to strike an overall dovish tone towards the domestic economy and monetary policy.

  • The NZDUSD pair is bearish while trading below the 0.6400 level, key support is found at the 0.6200 and 0.6080 levels.
  • If the NZDUSD pair moves above the 0.6400 level, buyers may test towards the 0.6440 and 0.6500 levels.

Thursday 25th June, US Initial Jobless Claims

The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the US dollar.

  • The USDCAD pair is only bullish while trading above the 1.3600 level, further gains towards 1.3700 and 1.3800 levels remain likely.
  • If the USDCAD pair trades below the 1.3600 level, sellers may test towards the 1.3550 and 1.3450 support levels.

Friday 26th June, US Core PCE

Core Personal Consumption Expenditure is released by the US Bureau of Economic Analysis and is an average amount of money that consumers spend in a month. The reading excludes seasonally volatile products such as food and energy in order to capture an accurate calculation of the expenditure. It is a significant indicator of inflation that traders and investors pay close attention to.

  • The GBPUSD pair is bearish while trading below the 1.2455 level, further losses towards the 1.2330 and 1.2220 levels remains possible.
  • If the GBPUSD pair trades above the 1.2455 level, buyers are likely to test the 1.2510 and 1.2550 resistance levels.

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