Ready to get your pips in?
This week, we’re looking at retail sales data from Canada and the U.K. as well as a bunch of PMI reports from the major economies.
ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!
Which calendar events will be under the spotlight and what are markets expecting? Here’s a list:
Major Economic Events:
China’s data dump (Apr 18, 2:00 am GMT) – In a few minutes, China will print its quarterly GDP and annualized retail sales, fixed asset investment, and industrial production numbers.
Annualized GDP is expected to improve from 4.0% to 4.2% but the rest of the reports are expected to reflect the impacts of higher energy prices and fresh COVID lockdowns in China’s key cities.
Canada’s inflation (Apr 20, 12:30 pm GMT) – Consumer prices rose by 1.0% from January but registered a 5.7% increase from a year ago in February. That’s the highest since August 1991!
Analysts see inflation accelerating to 6.0% in March. A high figure would not only justify the Bank of Canada’s (BOC) decision to raise its interest rates by 50 basis points to 1.00% but also set the stage for another 50-bp rate hike in June.
UK’s retail sales (Apr 22, 6:00 am GMT) – Increased confidence to go out and higher demand for services dragged retail activity 0.3% lower in February. This surprised GBP bulls who were celebrating a 1.9% gain in January.
Increased services spending and higher petrol prices are expected to slow retail trading further in March. Markets see a 0.1% decline with the annual rates slowing down from 7.0% to 2.9%. Yipes!
Global PMI reports – A parade of manufacturing and services PMIs from major economies is expected to paint a picture of the global economic growth.
Australia will start the program with its numbers scheduled on Thursday at 11:00 pm GMT and the U.K., Germany, France, Eurozone, U.K., and the U.S. will follow with their releases on Friday during the London and U.S. sessions.
ALL April PMIs are expected to print slightly lower figures but keep an eye out for significant upside or downside surprises!
Forex Setup of the Week: AUD/CAD
I got my eyes on AUD/CAD because the pair is approaching a key area of interest after breaking an uptrend on the lower time frames.
AUD/CAD is a few pips away from the .9300 psychological handle that had served as resistance for most of 2021.With Stochastic hitting “oversold” levels, I’m sure at least some bulls are watching out for buying opportunities.
But will AUD/CAD see bullish momentum this week?
The odds are against AUD buyers as escalating tensions in Ukraine and expectations of lower manufacturing and services PMIs point to traders probably staying away from “riskier” bets this week.
CAD, while also a high-yielding currency, will likely find support from higher crude oil prices. Already NZD/CAD has broken below support zones and is making new monthly lows as you read this.
A break below .9300 opens AUD/CAD to a trip to the 100 and 200 SMAs near the .9200 handle.
On the other hand, a bounce above .9300 or a round of risk-taking could propel AUD/CAD to its April highs near .9500.