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Weekly Forex Forecast: 15 – 19 December

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Weekly Forex Forecast: 15 – 19 December

The US Dollar posted the first weekly decline after six straight weeks of rallying ahead of an important week which will see the FOMC release its monetary policy statement as well as meeting minutes from the RBA and the BoE and the BoJ’s monetary policy statement.

Fundamentals for the Week 15 – 19 December

Date Event Estimates
15 December Tankan Manufacturing index 13
Tankan non-manufacturing index 14
Australia mid-year fiscal & economic outlook report
Switzerland PPI m/m 0.2%
German Bundesbank report
UK, CBI industrial orders expectations 3
Empire state manufacturing index 12.1
US Industrial production m/m 0.8%
NAHB housing market index 59
TIC Long term purchases 72.8bn
16 December RBA Assistant Governor speech
RBA monetary policy minutes
Japan Flash manufacturing PMI 52.3
HSBC Flash manufacturing PMI 49.8
UK Bank stress test results
BoE financial stability report
French flash manufacturing PMI 48.7
French flash services PMI 48.6
German flash manufacturing PMI 50.4
German flash services PMI 52.6
Eurozone flash manufacturing PMI 50.5
Eurozone flash services PMI 51.6
BoE’s Carney speech
UK CPI y/y 1.2%
UK Core CPI y/y 1.5%
German ZEW economic sentiment 19.8
Eurozone ZEW economic sentiment 20.1
Canada manufacturing sales m/m -0.4%
US building permits 1.06Mn
US housing starts 1.04Mn
US Flash manufacturing PMI 56.1
17 December UK average earnings index 3m/y 1.3%
UK Claimant count change -19.8k
UK unemployment rate 5.9%
BoE Meeting minutes
Eurozone final CPI y/y 0.3%
Eurozone final Core CPI y/y 0.7%
Canada wholesale sales m/m 0.9%
US CPI m/m -0.1%
US Core CPI m/m 0.1%
FOMC Statement
New Zealand GDP q/q 0.7%
18 December German Ifo Business climate 105.6
UK retail sales m/m 0.3%
US Flash services PMI 57.1
Philly Fed manufacturing index 26.3
19 December BoJ monetary policy statement
Gfk German consumer climate 8.9
Gfk UK consumer confidence -1
German PPI m/m -0.2%
UK Public sector net borrowing 14.8Bn
UK, CBI realized sales 30
Canada CPI m/m -0.2%
Canada Core CPI m/m 0.1%
Canada retail sales m/m -0.4%


Currencies/Events to Watch this Week

  • With the Euro continuing to shrug off bad news, the week ahead will see the flash services and manufacturing PMI’s along with inflation data. It is unlikely that the Euro will react much as focus shifts to the FOMC meeting on 18th December
  • Bank of England meeting minutes along with inflation data and monthly unemployment report will be the key factors to watch for the British Sterling, wherein the GBPUSD has been trading in a tight range for the past few weeks.
  • The US Federal reserve meets on 18th December for its final monetary policy meeting for the year. Markets will be closely watching the Fed’s statement and the press conference which is likely to bring volatility in the forex markets. CPI data ahead of the FOMC will keep the momentum going.
  • Bank of Japan will be holding its monetary policy review just a day after the FOMC and it will be interesting to watch how the event will turn out given that the Japanese voters have voted back Shinzo Abe to power

FX Majors Weekly Pivots

  R3 R2 R1 Pivot S1 S2 S3
EURUSD 1.2799 1.2646 1.2551 1.2398 1.2303 1.215 1.2055
GBPUSD 1.6017 1.5887 1.5802 1.5671 1.5586 1.5456 1.5371
USDCAD 1.1836 1.1713 1.1642 1.1519 1.1448 1.1326 1.1254
USDJPY 125.573 123.708 121.173 119.308 116.773 114.908 112.373
USDCHF 0.9964 0.9891 0.9766 0.9692 0.9567 0.9494 0.9369
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