We’ve got an eventful trading week lined up, as the flash PMIs, FOMC minutes, and RBNZ decision are scheduled.
Ready to make trading plans for these catalysts?
Don’t forget to review which factors drove forex market price action last week, too!
Major Economic Events:
Flash PMI readings (Nov. 23, starting 8:15 am GMT) – It’s the third week of the month, which means it’s time for a fresh batch of PMIs!
Another round of declines in manufacturing and services activity is expected in the euro region, with both Germany and France expected to print a slowdown in expansion for both sectors.
In the United Kingdom, the manufacturing PMI is slated to fall from 57.8 to 57.2 while the services PMI could dip from 59.1 to 58.2.
In contrast, Uncle Sam could report an improvement from 58.4 to 59.0 in its manufacturing PMI and a rise from 58.7 to 59.1 in its services PMI.
RBNZ rate statement (Nov. 24, 1:00 am GMT) – New Zealand’s central bank has another policy decision coming up, and officials are widely expected to announce a rate hike from 0.50% to 0.75%.
Inflation and employment have been faring pretty well in the country, which is likely why the RBNZ might decide to tighten again. Hinting that this might be the last of their rate hikes in a while, however, could mean profit-taking for Kiwi bulls.
U.S. core PCE price index (Nov. 24, 3:00 pm GMT) – The Fed’s preferred inflation measure is up for release this week, and this should give market watchers more clues on the central bank’s tightening plans.
A pickup from 0.2% to 0.4% is eyed for October, which ain’t really much but might still be enough to keep the Fed on track towards ending stimulus soon.
FOMC meeting minutes (Nov. 24, 7:00 pm GMT) – The transcript of the U.S. central bank’s latest huddle might have more clues on when they plan on hiking interest rates.
Recall that the Fed already started to taper asset purchases, which confirms that they’re on the path towards tightening possibly by mid-2022. Keep in mind, though, that the dot plot of forecasts indicated that half of the committee aren’t to eager about hiking next year yet.
Forex Setup of the Week: NZD/USD
This pair is inching closer to testing the bottom of its rising channel on the 4-hour chart, and the upcoming central bank events could determine where it’s headed next.
Will Kiwi bulls still defend the floor?
The RBNZ is widely expected to hike interest rates again this week, so there’s a chance that a bounce would take place. If so, NZD/USD could recover to the nearby resistance levels at the channel top around .7300 or the middle at .7250.
Another top-tier event worth keeping tabs on is the release of the FOMC minutes since these could have more insights on the Fed’s tightening timeline.
A bearish moving average crossover is brewing, which suggests that selling pressure could pick up. If that happens, the pair could slide below support and set off a reversal from the uptrend.
Then again, Stochastic is dipping close to the oversold region to reflect exhaustion among sellers. Turning higher would mean that buyers are taking over, so NZD/USD might follow suit.
