This week will be extremely interesting. Several crucial pieces of news will be released. Let’s take a short look at the most important events that are having an impact on the financial markets.
We recommend paying attention to the Bank of Japan interest rate decision. The BoJ is having its meeting at 3:00 GMT. Everybody expects that there will not be any surprises and we will see the same -0.1%. Meanwhile, on the daily time frame, USD/JPY broke the trend line up and started moving up. The closest target is 109.000.
Picture 1. USD/JPY 1D TF.
The American Conference Board is going to publish the Consumer confidence index for July. The forecast is 125. We remind you that the preliminary Michigan Sentiment index was released at 9.4; not so optimistic as the forecast, but better than the previous result in June.
Wednesday has become the most important day of the whole week. The FOMC is making the decision about the interest rate. The market expects that Jerome Powell will decrease the key rate 25 b.p. at least. It means that even if the FOMC makes this step we think that this won’t be enough and dollar will strengthen. The only way for USD to fall is to become totally dovish.
As for EUR/USD – we already mentioned that the target was 1.11100 and this level was successfully reached on July 25th. If bulls want to gain ground, they have to make the pair move up to 1.11750 at least where the trend line and the first Fibo level are.
Picture 2. EUR/USD. 1D TF.
Bank of England’s interest rate decision. We think that Mark Carney is going to keep the ball rolling while the situation continues to be obscure. During the weekend, the new British PM and D. Trump discussed a new UK-US trading deal. Also, Canadian leader J. Trudeau stated that Canada is ready to sign a trade agreement with the UK as well.
Right now, the British pound is under pressure. On Monday ‘cable’ plummeted till 1,22190.
Picture 3. GBP/USD. 1D TF.
Non-farm payrolls and the US unemployment rate will become the icing on this week’s cake. NFP is expected to be at +160K and Unemployment rate has to remain stable at +3,7%. We will try to give our own forecast on the eve of the NFP’s release – so don’t miss it on Thursday!