Start your trading week right by prepping for these top-tier catalysts and checking out my potential trade setup.
Major Economic Events:
Chinese economic reports (starting Apr. 13) – The Asian powerhouse nation will be printing its trade balance early in the week, followed by its Q1 2021 GDP reading on Friday.
Analysts are expecting the trade surplus to be cut in half from $103.3 billion to roughly $52 billion in March, although exports are predicted to have surged by more than 30% during the month.
The GDP release could draw more market interest, as the reading is slated to come in at 18.3% – nearly triple the earlier 6.5% expansion. This should fuel strong recovery hopes, but keep in mind that the figures are in comparison to the sharp contraction during the onset of the pandemic in early 2020.
U.S. CPI (Apr. 13, 1:30 pm GMT) – Uncle Sam’s CPI readings could draw a lot of market interest, as traders would like to see if the Fed has room to tighten monetary policy soon.
Analysts are expecting to see slightly stronger inflationary pressures, with the headline figure slated to post a 0.5% gain and the core reading to show a 0.2% uptick.
RBNZ monetary policy decision (Apr. 14, 3:00 am GMT) – No actual interest rate changes are expected from New Zealand’s central bank, but a shift in policy tone might be due.
Some say that the central bank could afford to sound more hawkish this time, given how New Zealand has done a much better job than its peers when it comes to weathering the pandemic.
However, some say that RBNZ policymakers might be keen on maximizing the impact of low interest rates, possibly even citing the dip in economic performance for Q4 2020.
Australian employment report (Apr. 15, 2:30 am GMT) – The Land Down Under could report a slower pace of hiring at 35.2K in March versus the earlier gain of 88.7K in February.
Note that the country’s JobKeeper program has already come to an end, which might mean around 100-150K in job losses in the months ahead. Still, the jobless rate is expected to have ticked down a notch from 5.8% to 5.7% in March.
Canadian retail sales (Apr. 15, 1:30 pm GMT) – A strong rebound in consumer spending is eyed, with Canada’s headline retail sales projected to post a 5.3% rebound and the core figure to show a 4.7% increase.
Note that the earlier figures showed a 3% slump in core retail sales and a 2.7% decline in headline consumer spending.
Forex Setup of the Week: AUD/USD
This pair already broke below the neckline of its head and shoulders pattern, indicating that a reversal from the climb is in order.
In addition, price also seems to have completed its retest of the broken support, so selling pressure could kick into high gear from here.
Note that the chart pattern spans roughly 400 pips, so the resulting slide could be of the same size. However, Stochastic is still pointing up to suggest that a larger correction is possible while the 100 SMA is holding as dynamic support for now.
Whether or not the selloff picks up might hinge on the Australian jobs report due mid-week, as a smaller gain in hiring is eyed. An even weaker than expected result might draw Aussie bears out, but an upside surprise could allow the rally to resume.
Another factor that could push this pair around is Chinese data, as the country’s trade balance and GDP are on this week’s docket. Upbeat readings could be bullish for the Aussie since the Land Down Under is China’s trade BFF.
Risk appetite would also likely play a role in AUD/USD direction, especially since market watchers continue to keep close tabs on vaccination efforts worldwide.
