Forex News Trading Events For The Week of November 17th -21st.

I’ve put together some analysis of this week’s Forex news events, which I hope will give everyone a good understanding of how I’m viewing the market for this week.

This week’s “high impact” news events that I will be looking to trade are as follows;

Tuesday 18^th November 2014

GBP – UK CPI y/y – 09:30am

The figure is forecast to remain unchanged from the previous level of 1.2% which is very low, this figure falls short of their 2% target and the figure is dropping as highlighted in the previous quarterly figure. We know that this is a concern for the BoE and creates more risk for the downside to the GBP particularly against the USD, if the figure comes out as expected at 1.2% or below it will add further selling pressure on the GBP, if we get any unexpected GBP rallies from such a figure we want to be selling into them. If the figure comes out at 1.3% or above, that could provide some support to the upside for the currency, although it would require a figure over 1.5% to create any sustained GBP hopes on a recovery on the GBP for a sooner rate hike. Estimates currently sit at a rate hike occurring in November 2015, if of course we get a positive reading those expectations could be brought forward. Therefore we need to be watching this data point closely to ascertain when the BoE might be planning to hike rates, if it’s below 1.2 we’re likely to see continued negativity regarding the currency, if however we get a reading above 1.2% admittedly it won’t be enough to give the GBP sustained momentum unless we get a reading above 1.5% and beyond.

Wednesday 19^th November 2014

JPY – BoJ Monetary Policy Statement & Press Conference – Tentative

This news event is highly important considering we’ve just had that negative GDP figure from Japan, the GDP data is showing recession in Japan. What that means is that Abenomics – the stimulus programme that Japan introduced in 2013, will be put under questioning; is it working and will the BoJ lose faith or alternatively do they now have to further increase stimulus. We need to know what the BoJ are thinking and consequently what plan do they intend to take, if their commentary runs along the lines of “it’s not of concern and we are going to continue” we can expect the JPY to weaken further. If however the BoJ show any concern, hesitation or uncertainty, it is that uncertainty that feeds the market and those safe haven flows in the market. So we want to be paying close attention to this statement, it is ill advised to position oneself prior to this statement, however as soon as we get the data and subsequent market reaction granting us a clear trend to trade, we want to trade along with it.

Thursday 20^th November 2014

USD – US Core CPI – 01:30pm

Figures are expected to show a little bit of growth on previous levels, deviating slightly from 0.1% to 0.2% this of course will excite the market if we do get a positive figure. We now have a situation where inflation is the key figure for the USD as the market will be basing their rate hike expectations on what these figures are, employment is pivotal also but emphasis has died off somewhat as US inflation becomes the primary catalyst for driving dollar prices.

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