This week, global markets are set for potential shifts as key economic events unfold, influencing investment strategies. Investors will focus on critical data, including inflation figures, trade balances, and central bank decisions from major economies. These indicators are crucial for gauging the current economic landscape and future monetary policy expectations. Stay tuned for the most significant market developments this week.
On Tuesday, several key economic indicators will be significant for traders. The German GDP data for Q2 will be released, with expectations of a slight contraction. This figure could influence the EUR, particularly against other major currencies. Additionally, the German CPI for July will provide insights into inflation trends in Germany, impacting the EUR's movement. In Mexico, GDP data for Q2 will also be published, with QoQ growth expected to be 0.2% and YoY growth anticipated at 2.2%. These figures will offer insights into Mexico's economic performance and could affect the MXN. In the U.S., the ADP Nonfarm Employment Change report will offer a preview of broader employment trends, while the Employment Cost Index will provide insights into wage pressures and labor costs. The Chicago PMI and Pending Home Sales data will further detail economic activity and housing market trends. Additionally, U.S. crude oil inventory updates will impact oil prices and the energy sector.
On Wednesday, traders will closely monitor the Bank of Japan's (BoJ) Monetary Policy Statement and Interest Rate Decision. These announcements, along with the BoJ's press conference, will be critical for understanding future monetary policy and could significantly influence the JPY. In the U.S., the ADP Nonfarm Employment Change report, Employment Cost Index, Chicago PMI, and Pending Home Sales data will provide a comprehensive view of economic conditions and could affect the USD and broader market sentiment. Updates on crude oil inventories will also be relevant for those tracking the energy sector.
Thursday will feature several significant releases for traders. The Bank of England (BOE) will announce its Interest Rate Decision, which could impact GBP volatility. The BOE's MPC Meeting Minutes and Governor Bailey's speech will offer additional insights into the BOE's policy direction. Earlier in the day, Chinese economic data will be important, including the Composite PMI, Manufacturing PMI, and Non-Manufacturing PMI for July. These figures will provide insights into the health of China’s economy, potentially impacting global markets.
In the U.S., Initial and Continuing Jobless Claims will provide updates on labor market conditions. The ISM Manufacturing PMI and related data will offer insights into the manufacturing sector's health. U.S. construction spending and productivity data will also be released, impacting economic expectations and market movements.
The week will conclude with key U.S. Labor market reports. The Nonfarm Payrolls data, along with Average Hourly Earnings and the Unemployment Rate, will be closely scrutinized for insights into the U.S. job market. These figures are likely to influence the USD and broader market sentiment. Additional reports include Factory Orders data, which will offer a snapshot of manufacturing activity, and the Baker Hughes Oil Rig Count, impacting energy markets. Speculative positions data from the CFTC, covering crude oil, gold, and major indices, will provide insights into market sentiment and trading positions.
DXY
On the 4h chart, the US Dollar Index (DXY) experienced a decline following the latest NFP data release, falling below the weekly fractal support at 103.65. It has completed a bullish Gartley pattern at the 127% Fibonacci extension and is now approaching the 61.8% Fibonacci retracement level at 102.86, showing signs of bullish divergence relative to the previous support fractal. While a rebound is possible, attention should be given to potential patterns projecting towards 101.83 or even below the monthly fractal support at 100.60, with further projections at 99.81.