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With the spotlight on price pressures these days, the upcoming inflation reports from the U.K. and Canada might spur big moves.

Other reports to watch out for in the forex economic calendar include China’s GDP and global flash PMI readings.

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

Major Economic Events:

Chinese Q3 GDP (Oct. 18, 2:00 am GMT) – After printing a mildly disappointing 7.9% growth figure in Q2, China might report an even slower 5.0% expansion for the third quarter of the year.

Keep in mind that fears of a property sector default were already in play during the period, likely spooking consumers into saving instead of spending. Supply chain issues, along with the government’s restrictions on tech firms, might have also weighed on investment activity.

If the actual figure comes in line with estimates or lower, it would still mark the slowest pace of growth in a year and likely dampen overall risk sentiment throughout the week.

U.K. CPI (Oct. 20, 6:00 am GMT) – Headline inflation is slated to hold steady at 3.2% while the core version of the report might also stay unchanged at 3.1% in September.

Keep in mind that the surge in inflation during the previous month prompted the BOE to shift to a more hawkish stance, so another upside surprise this time might bring rate hike expectations closer.

Canadian CPI (Oct. 20, 12:30 pm GMT) – Canada is also due to print its latest inflation figures, with the headline reading projected to show a 0.1% uptick for September.

This might be enough to bring the CPI from 4.1% to 4.3% year-over-year and spur speculations of another round of tapering from the BOC.

Global flash PMI readings (Oct. 22, starting 7:15 am GMT) – It’s the third week of the month, which means that it’s time for another round of flash PMIs!

Note that these are readings for the current month and are considered leading indicators of economic performance, especially as we head on to the final quarter of this year.

In the eurozone, French and German PMI readings are expecting another round of declines. This would mark the sixth consecutive monthly dip in activity, as the expansion in manufacturing and services sectors were likely bogged down by supply chain woes.

The U.K. might also print slower growth in both industries, with the manufacturing PMI estimated to drop from 57.1 to 55.6 and the services PMI to fall from 55.4 to 54.5.

In the U.S., the flash manufacturing PMI is expected to dip from 60.7 to 60.5 while the flash services PMI is projected to improve from 54.9 to 55.3.

Forex Setup of the Week: AUD/USD

AUD/USD 4-hour Forex Chart
AUD/USD 4-hour Forex Chart

The reversal pattern we were watching on AUD/USD last week already played out, and I’m seeing an even bigger one this time!

The pair is forming a double bottom and is inching close to testing the neckline resistance around the .7450 minor psychological mark.

A break above this level could set off a climb that’s the same height as the reversal formation, which is roughly 300 pips. Don’t wanna miss that if it happens!

The moving averages are oscillating to reflect consolidation for now, and Stochastic looks ready to turn south from the overbought zone to signal a pickup in selling pressure.

If the neckline resistance keeps gains in check, AUD/USD might slump back to the bottoms at .7150-.7175 or at least until the area of interest around .7300.