Forex This Week: Three Central Bank Decisions and Lunch for Traders

There are four major things that I personally look forward to every week before putting my money on any pair in the market.

1). The economic news that’s coming up.

2). Good entry’s in all the assets on my watchlist

3). Best places to exit

4). Profits.

Lucky for me, the week ahead seems to be lined up with 4 major economic news which translates to more assets to look at; more entry positions to get excited about, and most importantly, looming profits.

Before we begin the analysis for the week ahead in Forex, let me remind you about our new signals service for both Forex and Fixed Time Trading. You can join us here if you are interested.

Forex This Week: Major Economic Events Ahead

Tomorrow the 14^th, of June 2022, at 6:00 am GMT there will be a release of the UK labor market data which looks at: –

1). Wage growth in the UK

2). Unemployment rate in the UK

3). Employment change.

While this may not seem like such an important event for anyone just starting out in Forex, it actually is.

These data will move the market in your favor, or against you.

How do we expect the market to react to the news of this economic event and which pairs should you add to your watchlist ahead of the week?

Well, the UK employment rate has for the past few months been on the rise and there is an expectation that the data released this month might show a slow down by a 1% shift in unemployment percentage points.

On the other hand, analysts also predict that the Claimant count (used in the UK to measure the change in the number of people claiming unemployment-related benefits) is expected to decrease from the previous report.

Should the numbers released in the report be better than forecasts, then fears of a recession in the UK will lessen as the data will support the Bank of England’s plan to increase interest rates every month.

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2). FOMC Economic Projections (June 15, 6:00 pm GMT)

In the United States, the authority that’s mandated to set interest rates is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC).

The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks.

The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate.

In the CPI report released last Friday, there was an 8.6% increase in the consumer price index.

This means that there is a great chance of the FOMC policy decision hiking rates by 50 basis points in July and August to increase interest to 2% sooner.

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3). China’s data dump (June 15, 2:00 am GMT)

Did you have a look at the data dumped by China on Friday last week?

In case you missed it, here’s a recap: –

a). The consumer price index (CPI) rose 2.1% y/y in May, the same as the increase seen in April.

b). The producer price index (PPI) increased 6.4% y/y in May. This is 2.6% of what was reported in April.

In the upcoming event, the Annual Industrial Production for China could improve from -2.9% to -0.8% in May, and retail sales to recover from the drop caused by COVID and probably the Chinese new year holiday.

4). Swiz National Bank (SNB) Policy Statement

This event is scheduled for June 16, 7:30 am GMT.

Analysts predict that the SNB will maintain its 0.75% interest rates but hey, the report is not yet released.

This could go either way with either an increase or decrease in basis points.

Should there be an increase though, expect the CHF to shoot up ahead of the BOE policy decision.

5. Bank of England Policy Decision

This event is scheduled for June 16, 11:00 am GMT, and BOE is expected to increase its interest rates by 25 basis points for another month.

This move is expected to curb consumer inflation in the UK.

But then there are other reports like the UK industrial production report, unemployment, and retail sales scheduled ahead of the BOE policy decision which we can use to get clues into the UK’s growth prospects.

Forex This Week: Lunch for Day Traders.

The Bank of Japan (BOJ) isn’t releasing anything this week but the JPY has been on a steady decline against all the major currencies.

Is this the opportunity it gets to reign over all the other currencies awaiting major events?

Or, is it going to continue falling after we see positive reports posted by these reports?

Either way, it won’t hurt if you picked 53 pips for JPY/GBP when the price hits the resistance level at 0.6111 today or tomorrow.