After a strong rebound, US Dollar will see several important releases this week. Among these, Retail sales and FOMC statements will be significant. Get more insights for the new trading week with AtoZ Markets’ Forex Weekly Fundamental Forecast.
June 14, 2021, | AtoZ Markets– Investors are waiting for a stable price direction to get themselves out of the current market uncertainty and volatility. However, the situation may change this week, where FOMC will reveal the exact possible movement of the US economy. Can US Dollar remain its the strong position that we saw last Friday? Let’s see the whole market prediction from the AtoZ forex weekly fundamental forecast.
Forex Weekly Fundamental Forecast- US Retail Sales & FOMC
The week has started with a bank holiday in China and Australia that may provide a soft start. However, the leading market move may happen after the US fundamental releases, especially retail sales and FOMC.
Let’s see what else is waiting for an investor this week:
- US Core Retail Sales- Tuesday
- CAD CPI- Wednesday
- FOMC Statement- Wednesday
- AUD Unemployment Rate- Thursday
- NZD Quarterly GDP- Thursday
- SNB Monetary Policy Assessment- Thursday
Now move to the core part, where we will see what may happen this week:
The ECB showed that it was too early to slow the bond purchase program in the European central bank’s monetary policy meeting. Therefore, the ECB kept the deposit rate at -0.5% as part of the PEPP program at €1.85 trillion, continuing until at least March 2022.
Among other focuses, investors will see whether ECB will slow down the bond purchase program or not. Currently, as per ECB, it is too early for the move. They want to continue the conduct significantly more than the rest of the year.
Moreover, the ECB has provided an economic projection and sales growth forecast faster than before. As per the current forecast, the GDP growth may increase by 4.6% in 2021 and further 4.6% in 2022. In terms of inflation, the ECB wants to keep the CPI at 1.9% in 2021 and 1,5% in 2022. Currently, ECB President Christine Lagarde said that the risk of growth outlook is now balanced. However, the Q1 GDP showed a weaker than expected result but still at 0.3% QoQ.
However, this week’s prominent investors’ focus will be US fundamental releases that include Retail Sales and FOMC statements. EURUSD eliminated buying pressure last Friday, and any Hawkish FOMC may increase the bearish pressure on the price.
The UK economy has shown some evidence of rebound with solid progress in the vaccination program. The April GDP moved higher by 2.3% MoM from a 2.1% increase in March 2021. Moreover, the service sector is strong with a 3.4% increase while industrial output was down by 1.3%.
Based on the current growth, any strong PMI report will indicate a GDP growth for the entire year of 2021 to near 7.0%. Therefore, due to the solid economic growth, the bond-buying program may become slower.
Since the start of 2021, the UK economy has shown a strong rebound by showing signs of post-Covid recovery, allowing the economy to open. Therefore, the main focus of investors’ will remain towards May retail sales that may decrease from 9.2% to 1.6%. However, any sign of a good result may create bullish pressure on the GBPUSD price.
Despite the retail sales report, the current forecast for UK employment is a rise of 150K new jobs in April, compared to the prior three months. It is currently the most significant increase since February 2021. The May CPI will also show some quickening inflation, following the US. The current forecast is a rise of 1.8% year-over-year, while core CPI may increase by 1.5%.
This week, the Chinese activity data for Mat may show further growth in the Chinese economy following the economic activity this year.
In early 2020, the financial activity plunged but bounced back in Q2. Later on, the strong growth in Q1 of 2021 provided signs that the recovery is solid. Moreover, some renewed COVID outbreaks in some local areas may create fear in investors, but still, it is not much compared to the growth.
However, in the financial data, May retail sales may show a slower growth to 14.0% year-over-year. Moreover, the industrial output may grow slower to 9.2%.
The week started with the bank holiday in China and will remain relatively muted for the Chinese release. However, the leading investors’ focus will remain towards FOMC and US retail sales.
The new drama in the Bitcoin market started as soon as Tesla CEO Elon Musk gave a new tweet about Bitcoin.
Tesla will resume selling electric cars for Bitcoin when it confirms that at least half of the miners have switched to renewable energy, Elon Musk said. Over the day, the price of flagship cryptocurrency has increased by 12%, according to CoinMarketCap.
Read more about the Recent bullish Movement in Bitcoin: Bitcoin Surges 12% amid Another Tweet by Elon Musk.
Bitcoin stopped the bearish pressure on June 8, indicating that the correction is pending to the price chart. Moreover, the recent decision from El Salvador affected the market. He said that there is a way to mine bitcoin in an energy-efficient way through volcanos.
On the other hand, following the recent regulation, the Chinese government restricted using Crypto exchanged from Binance, Huobi, and OKEx, the three most used crypto exchanges.
Despite the negative effect, investors are keen to find the cryptocurrency market a promising way to earn money. Therefore, people are still joining the market, which may reveal in the chart this week.
Last Thursday, the US Bureau of Labor Statistics reported that annual inflation moved higher to 5% in May fro 4% in April. Although the result was above the previous report, it failed to catch investors’ attention.
In the meantime, the European Central Bank announced the interest rate to remain unchanged at 0.0%, 0.25%, and -0.50%, respectively. Moreover, ECB announced to continue the asset purchase program with a total value of €1,850 billion until at least the end of March 2022.
This week, the US Federal Reserve will announce the interest rate decision with the updated summary of the projection. This event is the most awaited topic for Gold investors where any dovish tone might create immediate bullish pressure on Gold.
On the other hand, a hawkish tone with an improved economic outlook could boost the US Dollar against other instruments.
Netflix started the business operation in 1997 and ultimately drove to the movie rental giant online. Moreover, the company started the streaming video service on movies and TV series in 2007 and started the production business in 2013.
In the most recent quarter, Netflix’s earnings came at $3.75 a share against the revenue of $7.16 billion. Therefore, the earnings came 139% higher against the 24% increase in sales. Netflix stock spiked to the record high as soon as the Q4 earnings got released. Moreover, Wall Street investors cheered at the company’s free cash flow and profitability.
However, the current projection for 2021 cash flow is breakeven but may turn positive in 2022.
Overall, this week will remain eventful that might provide a stable market direction after long volatility to the price. Despite the US Retail Sales and FOMC Statements, other releases are also important for traders.
What do you expect from the FOMC statement? Let us know in the comment section below!