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This week’s docket is full of mid-tier reports, and the ones worth watching might be the U.K. quarterly GDP and U.S. inflation figures.

Planning on trading these events? Read on to find out what analysts are expecting.

Don’t forget to review which factors drove forex market price action last week, too.

Major Economic Events:

ZEW economic sentiment figures (Aug. 10, 9:00 am GMT) – Germany and the euro zone are scheduled to print the results of the ZEW survey, which can serve as a preview of economic conditions.

For the month of August, Germany’s index is slated to tumble from 63.3 to 54.9 while the region’s figure could slip from 61.2 to 55.3, reflecting much weaker optimism.

U.S. CPI figures (Aug. 11, 12:30 pm GMT) – Slower price pressures are eyed for Uncle Sam, with the headline reading projected to have fallen from 0.9% to 0.5% in July.

The core version of the report could show a decline from 0.9% to 0.4%, underscoring the Fed’s view that the pickup in inflation is transitory.

U.K. quarterly GDP (Aug. 12, 6:00 am GMT) – After posting a 1.6% contraction in the first quarter of the year, the U.K. economy could boast of a 4.8% rebound in GDP for Q2 2021.

These growth figures might be enough to support the BOE’s more hawkish stance, as some policymakers are leaning towards tightening policy in order to keep inflation in check.

Forex Setup of the Week: GBP/JPY

GBP/JPY 4-hour Forex Chart
GBP/JPY 4-hour Forex Chart

Looking to trade the U.K. GDP report? Better keep this reversal setup on you radar!

Guppy is completing an inverted head and shoulders pattern on its 4-hour time frame, possibly going for a neckline break past the 153.00-153.50 area.

If that happens, the pair could climb by the same height as the chart pattern, which is roughly 450 pips. An upside surprise in the U.K. GDP release might just be a good catalyst for a move higher.

Also, be on the lookout for a likely return to pandemic-related headlines in Japan now that the Tokyo Olympics are over. A huge spike in cases could prove to be bearish for the yen, pulling GBP/JPY higher.

However, technical indicators suggest that there’s still a chance for the downtrend to resume.

The 100 SMA is below the 200 SMA to indicate that bearish pressure is in play while Stochastic is heading south from the overbought zone, so price could follow suit.