Start your trading week right by prepping for these top-tier catalysts and checking out my potential trade setup.
Don’t forget to review which factors drove forex market price action last week, too!
Major Economic Events:
U.S. retail sales (June 15, 12:30 pm GMT) – The May report could paint a mixed picture of consumer spending.
The headline retail sales figure could show a 0.6% decline after the earlier flat reading while the core reading is slated to rebound by 0.4% after the previous 0.8% drop.
FOMC statement and projections (June 16, 6:00 pm GMT) – No actual changes to interest rates or bond purchases are expected for the time being.
Do keep in mind that updated estimates for growth and inflation are due, and that these could influence expectations for future policy action. Price pressures have been stronger, as indicated by the core PCE price index and CPI figures for May.
The FOMC presser is scheduled to follow at 6:30 pm GMT. Any hints that policymakers are considering tapering asset purchases might have a strong impact on USD movements.
New Zealand quarterly GDP (June 16, 10:45 pm GMT) – After a 1.0% contraction in the last quarter of 2020, the New Zealand economy could post a 0.5% growth figure for Q1 2021.
A stronger than expected GDP reading could boost hopes that the RBNZ could unwind stimulus and hike interest rates sooner rather than later.
Australia’s employment change (June 17, 1:30 am GMT) – Hiring is expected to recover by 30.5K in May after the previous jobs loss of 30.6K. This should be enough to keep the unemployment rate steady at 5.5%.
However, the end of the government’s JobSeeker stimulus program earlier this year might still be weighing on the labor market.
Aussie traders would likely pay close attention to underlying data, such as the underemployment rate, labor force participation, and full-time hiring.
SNB monetary policy decision (June 17, 7:30 am GMT) – The SNB is likely to sit on its hands, and this announcement tends to be a non-event unless they start jawboning the Swiss franc again.
BOJ monetary policy statement (June 18) – No actual policy changes are expected from the Japanese central bank as well.
BOJ officials might even sound more cautious than ever, as a few cities have been placed under a state of emergency again on fresh outbreaks recently.
Forex Setup of the Week: EUR/JPY
This pair has been cruising higher for quite some time, and it looks like another test of the rising trend line support is looming.
Will euro bulls continue to defend this level?
Technical indicators suggest a continuation of the uptrend, as the 100 SMA is above the 200 SMA while Stochastic is close to indicating oversold conditions.
Buyers might be looking to jump in at the 132.00 major psychological support, which is right around the trend line and Fibonacci retracement levels.
The BOJ decision is coming up later in the week, but traders could price in expectations a few days ahead. The Japanese central bank is widely expected to stay dovish since the country continues to struggle with fresh outbreaks in some cities.
Meanwhile, the euro could stay afloat since last week’s ECB statement was slightly more optimistic. Recall that a few officials already wanted to scale back the PEPP stimulus program while the ECB staff upgraded growth and inflation forecasts.
