Weekly Forex Forecast: 15 – 19 December

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 18^th 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 18^th 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