Weekly Trading Forecast (July 01 - July 07)

This article will summarize the next week’s important economic data releases as well as providing forecasts about the developments of the major currency pairs.

Monday – 07/02/2018

The beginning of the week delivers two high-profile economic announcements from the UK and US. UK’s Manufacturing PMI (9:30 GMT) is predicted to come in at 54.1, dropping 0.3 from its data of 54.4 in May. U.S. ISM Manufacturing PMI is also foreseen to print at 58.2, slipping 0.5 from the last announcement of 58.7. Both the Pound Sterling and Greenback are likely to react negatively given worse-than-expected releases, so we suggest not trading the GBP/USD.

Tuesday – 07/03/2018

The next Tuesday will have UK’s Construction PMI (9:30 GMT) come into play. Analysts expect a slight increase of 0.1 (from 52.5 to 52.6) in the data, therefore, the British Pound will likely remain intact after the release.

Wednesday - 07/04/2018

Wednesday next week brings two announcements out of Australia (2:30 GMT). The Retail Sales m/m is forecasted to fall to 0.3% from its 0.4% level in May; however, the Trade Balance is expected to advance by 0.23B versus the prior 0.98B. These conflicting forecasts may cause the Australian Dollar to oscillate before the outcomes are confirmed. We highly suggest that traders should stand aside until market direction becomes clear.

The other notable item of the day is the UK’s Services PMI report, which will be released at 9:30 GMT. Economists anticipate an inconsiderable decrease in the data (from 54.0 to 53.9), suggesting that the Pound Sterling won’t fluctuate much.

Thursday - 07/05/2018

The next Thursday’s high-impact economic calendar will start with the speech from Bank of England Governor Mark Carney (11:00 GMT). The British Pound may be fueled given a hawkish tone dropped from the BOE’s boss.

A series of important economic announcements from the US will come then. ADP Non-Farm Employment data in June (13:15 GMT) is forecasted to add 190K jobs, rising 12K compared to the figure of 178K in May. We appraise that the US Dollar will likely trade higher versus its G10 FX counterparts, despite the fact U.S. ISM Non-Manufacturing PMI (15:00 GMT) is anticipated to be lower than its May level of 58.6.

At 16:00 GMT on the same day, Crude Oil Inventories will be divulged. The last data was confirmed at -9.9M, but there has currently been no forecast for the June data. Hence, we remain neutral on Oil prices’ development.

At 19:00 GMT, FOMC Meeting Minutes will take place. Traders should watch the meeting for implications from the Fed. Should hawkish hints be dropped, the Greenback can be boosted sharply against its namesakes.

 FOMC Meeting Minutes
Source: International Business Times


Friday - 07/06/2018

Friday will be the most exciting day of the next week with a basket of high-profile announcements from the US and Canada. All come in at 13:30 GMT.
Three important economic data releases from Canada, including Employment Change, Trade Balance, and Unemployment Rate have currently had no forecasts from analysts, therefore, we remain neutral on the Canadian Dollar’s development.

Meanwhile, U.S. Average Hourly Earnings m/m is calculated to remain at 0.3% in June. The Non-Farm Employment figure is expected to be +200K for the month of June, losing 23K compared to the data of 223K in the previous month. Unemployment Rate is also predicted to hold steady at 3.8%. With such positive expectations, USD bulls’ morale may be reinforced, paving the way for the US Dollar to advance versus major currencies.
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