Start your trading prep for the week by plotting these upcoming economic releases and market events on your schedule and checking out these potential plays.
BOE Inflation Report Hearings (Nov. 21, 10:00 am GMT)
It’s gonna be a busy one for sterling traders as the U.K. has a couple of top-tier events lined up. First off is the BOE Inflation Report hearings that usually spur additional volatility for pound pairs.
During these hearings, MPC members share their views on economic performance and inflation before Parliament’s Treasury Select Committee. This particular one would be the first after the BOE’s latest rate hike, so lawmakers and market watchers alike are eager to get more clues on when the next one might be.
Keep in mind that, even though the latest set of CPI readings came in below consensus, the fact remains that inflation has overshot the central bank’s target and wage growth has been unable to keep up. Strong hints that policymakers are keen on reining price levels in with another tightening move early next year could revive pound gains.
U.K. Autumn Forecast Statement (Nov. 22, 12:30 pm GMT)
Next up, it will be the U.K. Treasury’s turn to share their views on the economy as they release the Autumn Forecast Statement. This document also gives a preview of the government’s budget, along with updated economic estimates.
Any negative revisions could prove bearish for the pound, especially if officials put extra weight on Brexit-related uncertainties. On the other hand, maintaining a “Keep calm and carry on” vibe could provide some reassurance that the U.K. economy can power through Brexit.
British Finance Minister Hammond is also expected to touch upon potential budget constraints that Brexit could pose, particularly when it comes to hefty fees being charged by the EU and forecasts of lower tax revenues.
FOMC Meeting Minutes (Nov. 22, 7:00 pm GMT)
The transcript of the Fed’s November monetary policy pow-wow are up for release before U.S. traders take off to buy their turkey for Thanksgiving. While the minutes are widely expected to reaffirm the likelihood of a December hike, profit-taking ahead of the long weekend could mix with the market reaction to this report.
New Zealand retail sales (Nov. 23, 9:45 pm GMT)
The Kiwi has been one of the weaker performers of the bunch, thanks partly to political risks and mostly downbeat data.For Q3 2017, headline retail sales are projected to post a meager 0.4% uptick compared to the earlier 2.0% gain while the core version of the report could slow from 2.1% to 0.9%.
Weakening consumer confidence surveys and inflation expectations for the past months point to sluggish spending figures, which could push RBNZ tightening expectations further back.
Euro zone PMIs (Nov. 23, starting 8:00 am GMT)
Medium-tier leading indicators for the euro zone have consistently shown improvements, so traders are eager to find out if the latest set would continue to hint at positive economic momentum.
Small dips are expected from the manufacturing sectors of Germany and France, which might then bring the region’s flash manufacturing PMI down from 58.5 to 58.3. The services PMI, on the other hand, is projected to tick up from 55.0 to 55.3 as Germany could post a gain.
Stronger than expected figures could take the spotlight away from German political uncertainties and remind traders that the ECB is scheduled to unwind its QE program soon. The minutes of their latest policy meeting are also up for release on this day.
Canadian retail sales (Nov. 23, 1:30 pm GMT)
Last but certainly not least are Canada’s retail sales reports due on Friday’s New York session.
Both headline and core retail sales are poised to rebound by 0.9% after previously declining by 0.3% and 0.7%, respectively. Stronger than expected data could provide some support for the Loonie, even as the oil-related currency also takes its cue from U.S. oil stockpiles and expectations for the OPEC meeting.
Charts to Watch:
Three for three on last week’s setups, but will my luck run out on this new set?
First up is this ongoing wedge pattern consolidation on EUR/CHF. Price sold off sharply at the start of the week on German politics updates and could keep up its drop if the uncertainty lingers.
Now the franc has been less hesitant to take its share of safe-haven flows away from the euro and even the dollar and yen lately as SNB officials don’t seem to be as bothered about currency appreciation as they used to be.
Positive results from medium-tier reports like PMIs later in the week could keep the shared currency afloat, but a nasty combination of risk-off vibes and potentially another round of elections in Germany could lead to a break lower.
This pair has a knack for respecting technical levels as shown by its bounce off the long-term range resistance around 114.00-114.50 recently.
Price has moved nearly halfway through its range and is approaching the area of interest at the middle. At the same time, stochastic is heading south to indicate that sellers have the upper hand at the moment.
If buyers take over once the oscillator hits oversold levels, a bounce off the 111.50 minor psychological level could be seen. Keep in mind that it’ll be a shortened trading week for U.S. traders as they take off for Thanksgiving by Thursday, which means that profit-taking could ensue just after the FOMC minutes release.
It wasn’t exactly the best way to start the week for the euro as German political troubles weighed on the shared currency early on. However, euro zone fundamentals remain on the up and up, which is probably why this uptrend could resume sooner or later.
EUR/NZD is pulling back after testing its ascending channel resistance on the 4-hour time frame and could be due for a drop to the 61.8% Fib right on support. A shallow pullback could find buyers at the 38.2% Fib at the mid-channel area of interest.