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May 28, 2018

TRADERS LOOK TO BOC RATE DECISION AND US JOBS REPORT

BOC AND NFP

During the upcoming trading week, the Canadian and United States economy take center stage as the Bank of Canada decide on where to set interest rates, and the US economy releases the Non-farm Payrolls Jobs Report. The BOC is expected to keep rates on hold, although rising Oil prices may support a more hawkish view from Canadian policymakers. The US economy is forecasted to have created 185,000 new jobs during May, with traders and investors likely to watch the Wage Earnings component of the US Jobs Report closely for any inflationary pressures building.

We also see the release of key inflation data from the German and US economy, with the US PCE number closely watched as it remains the Federal Reserve’s preferred measure of US Inflation. GDP is also in focus, as the United States and Canadian economy release key first fiscal quarter Gross Domestic Product data.

Monday 28th May, Japanese Unemployment Rate

The Japanese Unemployment Rate is forecasted to hold steady at 2.5 percent, during the month of April. The monthly Unemployment Rate is a measure of the percentage of unemployed workers inside the Japanese economy. A higher percentage indicates weakness in the Japanese labor market, and tends to influence the strength and direction of the Japanese economy. 

  • The USDJPY pair is bearish while trading below the 110.00 level, further losses towards 108.60 and 108.10 remains possible.

  • If the USDJPY pair moves above the 110.00 level, buyers may test towards the 110.30 and 111.00 levels.

Tuesday 29th May, United Kingdom Housing Prices

The Nationwide Housing Price shows the value of house prices across the United Kingdom, and indicates current movements inside the UK housing sector, which is considered a vital part of the economy. This month’s House Price Value is particularly important, as last month housing prices in the UK showed a marked decline on a month-on-month basis.

  • The GBPUSD pair is strongly bearish while trading below the 1.3400 level, further losses towards the 1.3260 and 1.3200 levels may occur.

  • If the GBPUSD pair trades above the 1.3400 level, buyers may test towards the 1.3500 and 1.3606 levels.

Wednesday 30th May, Bank of Canada Interest Rate Decision

The BOC Interest Rate Decision is announced by the Bank of Canada, with most economists expecting that Canadian policy makers will keep rates on hold at 1.25 percent this month. If the BOC strikes a hawkish tone about the inflationary outlook of the economy, it is generally taken as positive for the Canadian dollar. If the BOC has a dovish view on the Canadian economy, it is seen as negative for the Canadian dollar.

  • The USDCAD pair is bullish while trading above the 1.2900 level, further upside towards 1.3020 and 1.3123 seems likely.

  • If the USDCAD pair declines below the 1.2900 level, sellers are likely to test the 1.2840 and 1.2760 support regions.

Thursday 31st May, Eurozone CPI Inflation

The 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 Euro Zone economies. Higher inflation puts pressure on the European Central Bank to raise interest rates. CPI data may not always affect the euro currency significantly, because CPI is the European Central Bank's mandated inflation target.

  • The EURUSD pair is bearish while trading below the 1.1700 level, further downside towards 1.1610 and 1.1540 levels seems possible.

  • If the EURUSD pair moves above the 1.1700 level, buyers may test towards the 1.1750 and 1.1830 levels.

Friday 1st June, US Non-Farm Payrolls Jobs Report

The US Non-farm payrolls Job report is the most carefully observed indicator in the United States overall employment situation. It is considered the most inclusive calculation of job creation in the US, and this characteristic causes the NFP figure to become highly significant, due to the great importance of labor in the United States economy. Most economists agree that the American economy will have created 185,000 new jobs during May.

  • The USDCHF pair is bullish while trading above the 0.9900 level, further upside towards 0.9979 and 1.0039 remains possible.

  • If the USDCHF pair declines below the 0.9900 level, sellers are likely to test the 0.9850 and 0.9740 support regions.

 

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