FINANCIAL MARKETS STILL VOLATILE HEADING INTO THE CHRISTMAS HOLIDAYS
DATA AND U.S POLITICS
Financial markets are likely to see reasonable amounts of trading activity in the final trading week before the Christmas holiday period begins, with a host of top-tier macro-economic data being released. U.S politics is also in focus, with the Trump administrations tax reform bill going into Congress, and the U.S government shutdown approaching.
The main event this week on the macroeconomic calendar will be the Bank of Japan policy decision, with Governor Kuroda's speech also awaited by market participants. We also see the release of the Reserve Bank of Australia's meeting minutes from the last policy decision, and key November CPI figures from the United States, Canada and eurozone economies.
Monday 18th December, Eurozone CPI
The eurozone releases key Consumer Price Index inflation data for the month of November, with most economists expecting inflation to remain unchanged from the previous month. CPI measures the change in the price of goods and services from the perspective of the consumer, it remains a key way to measure changes in purchasing trends and inflation.
The EURUSD pair is likely to remain bearish while trading below the 1.1813 level. Downside targets remain 1.1713 and 1.1660.
Should price-action move above the 1.1813 level, buyers will then look to target the 1.1860 and 1.1890 levels.
Tuesday 19th December, RBA Policy Meeting
The Reserve Bank of Australia Monetary Policy Meeting Minutes are a detailed record of the bank's most recent policy-setting meeting, containing in-depth insights into the economic conditions that influenced the rate decision.
A more dovish than expected minutes could be taken as bearish for the Australian Dollar, while a more hawkish than expected minutes could be taken as positive for the Australian Dollar.
The AUDUSD pair remains bullish while trading above the 0.7610 level. Upside targets remain 0.7680 and 0.7715.
Should price-action move below the 0.7610 level, further downside towards 0.7580 and 0.7510 remains possible.
Wednesday 20th December, New Zealand Q3 GDP
The New Zealand economy releases third fiscal quarter Gross Domestic Product figures, with most economists expecting growth to have accelerated less than the previous quarter. GDP measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy's health.
The NZDUSD pair remains bullish while trading above the 0.6980 level, further upside toward 0.7030 and 0.7075 remains possible.
Should price decline below the 0.6980 level, further downside towards 0.6935 and 0.6880 seem likely.
Thursday 21st December, Bank Of Japan Policy Decision
Bank of Japan policy board members come to a consensus on where to set the Japanese interest rate on Thursday. Traders watch interest rate changes closely, as short-term interest rates are the primary factor in currency valuation.
The USDJPY pair is likely to remain bearish while trading below the 113.10 technical level. Further downside towards 112.30 and 111.55 seems possible.
Should price-action move above the 113.10 level, buyers will likely target the 113.75 and 114.45 levels.
Friday 22nd December, U.S New Home Sales
New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it's released ahead of Existing Home Sales because the reports are tightly correlated.
A higher than expected reading should be taken as a positive for the U.S dollar, while a lower than expected reading should be taken as negative for the U.S dollar.