Weekly trading forecast September 10 - 14

The trading week ahead is full of important events in the financial markets worldwide. Two major central banks are going to meet and publish their interest rate decision together with economic outlooks and forecasts. The economic calendar is also packed with important data which will have an influence on all of the major financial assets. With more trading volume back to the market on Autumn season, the volatility is also expected to be increased. Traders and investors will be watching closely the politicians as they are supposed to make important decisions for the whole regions. Will Trump keep pushing on China threatening by new import tariffs? Will the risk-on mode come back to the market? Will the emerging markets continue the turbulence? These are the main questions for the financial markets this upcoming week.

Monday, September 10.

Busy week kicks off with the second and third largest economies’ data. Japan reports the second-quarter GDP and Adjusted Current Account. Any improvement compared to the expectations (2.6% and 1.56T respectively) will add risk appetite to investors, and Japanese Yen should weaken in that case. China Inflation reports are expected to support the Yuan. CPI monthly change is forecasted at 0.5% growth level in August while PPI growth is awaited on an even stronger pace: 4.0% yearly. Inflationary pressure is always important for any economic growth so worries about the slowdown might be overshadowed by potential improvements in real data. Reserve Bank of Australia Assistant Governor Bullock will speak on Monday and Aussie traders will try to catch his words in the scope of AUD/USD tumble. European trading session will start with a pack of British economic report which will be important for sterling traders in the scope of upcoming Bank of England meeting later this week. Although there is no change expected in the monetary policy, such data as Construction output, Industrial and Manufacturing production, Trade Balance and monthly GDP change should support GBP/USD in case of strong readings. Otherwise, any disappointment in data might push the pair to 1.2800 support and lower. Eurozone will not have any reports on Monday as well as the United States later in the American session. The only interesting event for currency markets will be FOMC Member Bosnic’s speech.

AUD/USD
Source: Investing.com


Tuesday, September 11.

Commodity currencies should have an influence from New Zealand Electronic Card Retail Sales and Australian NAB Business Confidence. Kiwi and Aussie bulls desperately need any optimist from fundamentals in order to stop the recent plunge of NZD/USD and AUD/USD. However, more downside pressure is forecasted. British reports continue the busy week with extremely important Average Earnings index (2.5% consensus) and Claimant Count Change (3.6K jobs added). Both reports have a significant impact on BoE Monetary Policy Committee and the lack of growth there is one of the main justifications to hold the interest rates at the same low level. Therefore, GBP/USD might continue falling like a rock in case of that data will be released in red. German and European ZEW Economic Sentiment is scheduled to be released later during the European trading session and those reports will be watched closely by EUR/USD traders. Canadian Housing Starts and JOLTs Job Openings in the United States - these are the only events for the American session.

Wednesday, September 12.

The market focus will be shifted closer to the end of the day on Wednesday. Some volatility is expected for European currency pairs on Spanish CPI, Eurozone Industrial Production and Employment change. But the impact might be rather limited as investors will be waiting for the ECB rate decision and Mario Draghi press-conference on the next day. Much more important data is scheduled for New York opening. Greenback bulls will be hoping for CPI and PPI reports in the U.S. in order to resume the uptrend which was reinforced after robust NFP numbers last Friday. The Fed is going to meet on September 26, and 25 basis points rate hike is priced in by the market players completely. The bigger question is about the next move from the regulator. Chances for the rate hike (fourth in 2018) will be certainly increased if the inflationary pressure will be accelerated. A confirmation of that could be the recent wage growth reported in August. Therefore, we believe that greenback could continue strengthening on Wednesday. Crude Oil Inventories are due to release at 03:30 PM GMT. Last week slide in oil stocks (-4.302M barrels) in the United States caused a bearish retracement for WTI Crude Oil prices. Commodity bulls expect the inventories to decline further this upcoming week but on less pace (-1.294M barrels is forecasted). Any positive change might lift the prices up to $70 per barrel again.

Thursday, September 13.

Unemployment change in Australia is the only significant report during the Asian session on Thursday. We do not expect any volatility at that time as the markets will be waiting for the European Central Bank rate decision. ECB President Mario Draghi had expressed the regulator’s position earlier and there are no changes expected by the analysts. Economic reports were mixed in the last four weeks and there is no growth in inflationary pressure in the Eurozone. So the interest rates in the region will be left unchanged most probably. Much more interesting for the traders will be Draghi’s press conference. Any further dovishness from his side will be apprehended by EUR/USD bears as the green signal to keep pushing the pair to year lows. So, 1.1400 support could be tested easily in this scenario. Bank of England will publish their rate decision almost at the same time. There are no changed expected as well. Pound speculators will be looking at the vote split which is forecasted as 9-0 in favour of ‘unchanged’ verdict. BoE MPC Governor Carney is going to speak next day so the price action will be determined by the rate decision only. WIth traditional higher volatility during that event, we expect GBP/USD declining further. Core CPI in the United States could add fuel to the fire for both currency pairs in case if the inflation accelerate. The U.S. dollar could have a spike in demand across the board on Thursday.

Friday, September 14.

The final trading day of the whole week will be influenced by such important events: Chinese Industrial Production, European Wages growth and Trade Balance, Carney’s speech and Retail Sales in the United States. Those traders who would like to get an additional forecast for Friday should follow our further publications and subscribe to our traders’ support which is available for our existing clients.
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