Forex News Trading Strategy for the Week

Forex News Trading Strategy: Review

Last week, there was very little economic data out of the U.S. to entice dollar traders. Still, the dollar remained well support throughout the week. On Friday, U.S. President Donald Trump promised to announce a “phenomenal” tax reform, which along with other comments, should bring the relation trade back into the picture.

The antipodean currencies were the focus of trade during the week, due to rate decisions and policy statements from both the Reserve Bank of Australia, and the Reserve Bank of New Zealand. Both central banks left their respective monetary policies unchanged, however, the RBNZ was clearly the more dovish of the two. The RBNZ’s Governor Wheeler send the New Zealand dollar tumbling when he stated that monetary policy would “remain accommodative for a considerable period”.

Forex News Trading Strategy: The Week Ahead

There are no central bank meetings scheduled this week, however we will get the release of the European Central Bank minutes of its January 19 meeting. This week is a much busier week compared to last for U.S. data. On the schedule are prints for both consumer and producer prices, as well as retail sales and housing starts. Federal Reserve Chair Yellen is schedule to testify on the Semiannual Monetary Policy Report before the Senate banking committee, on both Tuesday and Wednesday.

Monday

First up for this week was Japan’s preliminary Q4 GDP. Japan’s GDP grew by 0.2% QoQ during the fourth quarter according to preliminary estimates. This was slightly below the consensus for growth of 0.3%. The Japanese Yen was unaffected by the data.

Tuesday

Tuesday begins with the Chinese CPI inflation print, during the Asian session. CPI inflation came in just below consensus for December, when it rose 2.1% YoY. The health of the Chinese economy has come back into focus, after a string of soft data releases.

During London, we have UK CPI, Eurozone flash GDP, and German economic sentiment due up. UK CPI inflation for January is expected to print at 1.9% YoY, up from 1.6% for December.

During New York, Federal Reserve Chair Yellen is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee.

Wednesday

UK employment data will be the focus of the London session on Wednesday. The claimant count change is expected to rise 1.1K, with earnings at 2.8%. The unemployment rate is expected to hold steady at 4.8%.

During the New York session, the U.S. dollar will be in focus with CPI, retail sales, and another day of testimony from Fed Chair Yellen all on the schedule.

Thursday

The Australian labor market report, for January, kicks things off on Thursday. December’s data came in just above expectations, increasing by 13,500, with full time jobs driving the increase for the third month. Consensus is for a gain of 10K jobs for January, with the unemployment rate holding steady at 5.8%.

During New York, U.S. data comes into focus with Building Permits, Unemployment Claims, and the Philly Fed Manufacturing index on the schedule.

Friday

We end the week on a quieter note, at least as far as the economic calendar goes. UK Retail Sales is due up during London, with no tier one data of note during New York. UK retail sales closed out 2016 surprisingly weak, dropping 1.9% in December. The steep drop coming after seeing November’s modest gain revised down to a 0.2% decline. Consensus for the January figure is for a 1.0% gain in overall sales, and 0.7% for the core print.

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