This week’s trading has an unusual number of news events taking place. The wide range of announcements will take place on Wednesday, Thursday, and Friday and they vary widely from AUD PPI q/q and a BOJ Gov Kuroda speech to the GDP m/m on the CAD.
BIG EVENTS IN U.S.
Without doubt the biggest events this week are in the U.S. Normally speaking the FOMC statement and the NFP events take place in separate weeks, but this time around the events are combined in 1 trading week. Here are the major events to reckon with for the US:
1) Wednesday: ADP and FOMC
2) Thursday: unemployment claims
3) Friday: NFP and unemployment rate
IMPACT OF EVENTS
Last month’s NFP figure of 288k was one of the highest in the post financial crises era. The only NFP figure that was higher in the last 5 years dates back to summer 2010. It is unlikely that this month’s NFP figure will be able to exceed last month’s figure of 288k so the expectations are measured at 230k. The main question is whether the expectations can be matched or beaten similar to the last 5 months straight.
The announcements in the U.S. will obviously have a crucial impact on the U.S. Dollar movement. Hints and signs of improvement in the U.S. economy could translate into USD strength but if weakness or a slowdown in the recovery is witnessed then USD weakness could set the tone for August trading.
IMPACT ON TECHNICALS
For us technical traders the clustering of the US news in 1 week has the advantage that the major fundamental events are over with quicker. Or in other words, technical traders can be less disturbed by announcements in the remainder of the month and more focused on the charts and price movements.
The U.S. Dollar weekly chart is showing bullish strength: 4 candles in row have higher highs and higher lows. Will this week’s candle be bullish again? The trend clashes with S&R yet again:
a) If answered yes: a bullish breakout above resistance (red and orange) is taking place and bullish trend continuation could be expecting up to the 50% Fibonacci retracement level and possibly higher.
b) If answered no: a rejection at the resistance could send the US Dollar back into consolidation (between magenta and red lines).
[tweetable alt=””]This week will tell whether the USD is ready for a dazzling breakout or messy and muddy consolidation.[/tweetable]
What are YOUR expectations for the US Dollar??
Thanks for sharing and happy trading!
Winner’s Edge Trading, as seen on: