Weekly Fundamental Calendar & Trade Set-up


Last week a two-day meeting in Krun, Germany by leaders from 7 industrialized nations - Canada, Italy, France, Germany, Japan, the UK, and the US took place regarding key issues of global economy and foreign, security and development policies. The following are the main points from a final statement on a state of global economy:

“The global economic recovery has progressed since we last met (on June 4-5th 2014).” Leaders pointed, with the decline of energy prices having “supportive effects in most of the G7 economies.”
“However, many of our economies are still operating below their full potential and more work is needed to achieve our aim of strong, sustainable and balanced growth,” they stressed.
“Overall G7 unemployment is still too high, although it has decreased substantially in recent years.” Furthermore, “We also continue to see challenges such as prolonged low inflation rates”.

US – USD

Past week’s fundamental data came flying for the U.S. Every major figure, apart from Unemployment claims which remained unchanged at 279k, came out better than expected. More than half of the data accounted for consumer spending indications. Core Retail Sales m/m rose to 1% from 0.1%, PPI m/m increased from -0.4% to 0.5% and Prelim UoM Consumer Sentiment came out at 94.6 with previous of 90.7. All showing a strong increase in consumer spending over the month of May. The positive week and its outcome could be mentioned in FOMC meeting on Wednesday.

Read also: Citi Sell EURUSD

Weekly fundamental calendar for the U.S starts on Tuesday with Building Permits forecasted slightly lower at 1.11M from 1.14M, however, still following an uptrend from 2011. A very fundamentally important day on Wednesday: FOMC Economic Projections, FOMC Statement, Federal Funds Rate and FOMC Press Conference. As expectation for a rate hike still remain in September, strong market volatility will not be avoided. Whole U.S economy will be thoroughly covered from economic projection over the next 2 years, votes on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes, to economic outlook and clues on the outcome of future votes. On Thursday, Core CPI m/m expected slightly lower at 0.2% against 0.3%, CPI m/m predicted 0.5% from 0.1% showing an increase in price for food and energy, Unemployment Claims remaining steadily at 278k and the week finished with Philly Fed Manufacturing Index indicating a better expectations from 250 manufacturers for U.S economic health at 8.1 from previous 6.7.

EU – Euro

Time is running out for Greece. The country is facing a major €1.5 billion IMF repayment at the end of the month, as Greece decided earlier on this month to bundle-up this month’s repayments at the last minute. Nevertheless, Greece has been refusing to compromise to any demand. IMF’s spokesman, Mr. Gerry Rice told: “The ball is very much in Greece’s court. There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.” In a meeting on Thursday, Eurogroup Chief Mr. Jeroen Dijsselbloem pressed the urgency for the thousandth time: “We’ve repeatedly explained to the Greeks how little time there still is, if the Greek government isn’t willing to take difficult measures, even if they’re unpopular, then Greece will never be saved.” It would seem that Greece has its final chance to turn its fate on a Eurogroup meeting in Luxembourg on the 18th of June, as Eurozone members already started “considering the consequences of non-payment (by Greece) and beyond.” Told in anonymity by A Eurozone senior official to the AFP.

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From the fundamental data side, on Monday, ECB President Draghi Speaks on monetary policy matters. On Tuesday, German ZEW Economic Sentiment forecasted lower for a third consecutive time at 37.5 from a previous of 41.9. Moreover that day, the European Court of Justice will publish a preliminary, non-binding ruling regarding the constitutionality of the ECB's Outright Monetary Transactions policy (OMT). It was requested by the German Constitutional Court because they doubted about the legality of the OMT under German and EU law. Lastly, on Thursday, an amount of money the ECB will create and use to loan to Eurozone banks - Targeted LTRO, with previous March’s figure of 97.8B and whole-day Eurogroup Meeting.

UK – GBP

A problem of Brexit still remains on the agenda. David Cameron pointed out on G7 meeting that: “We have a clear view: renegotiate, get a deal that’s in Britain’s interest and then recommend Britain stays in it”. According to Manpower, a leading recruitment firm, leaving the EU would create a “vast amount of uncertainty and instability”. Managing director James Hick added: “Our position on Europe is clear: leaving the EU would threaten jobs and harm Britain’s prospects. At a time when we face serious skills shortages in key areas of the economy, that (the EU exit) could have a very negative effect on our economic health.”

The fundamental week for UK starts big. On Tuesday, CPI y/y forecasted to leave deflation of -0.1% and enter inflation of 0.1%. Next, on Wednesday, Average Earnings Index 3m/y est. 2.5% vs. 1.9%, Claimant Count Change, having a new calculation formula, is predicted at -12.5k from -6.5k, the day finishes with MPC Official Bank Rate Votes, expecting all members to hold on rates. The last news for the week will be on Thursday as Retail Sales m/m is due, showing no change in consumer spending of 0% from previous addition of 1.2%.

Canada – CAD

Canada will start with a low note from Manufacturing Sales m/m predicted much lower at -1.3% from 2.9%. Next, on Tuesday, a consumer spending indication of Wholesale Sales m/m estimated at 0.3% with previous of 0.8%. Finally, the most important day for Canada - Friday, change in the price of goods and services purchased by consumers, excluding the 8 most volatile items - Core CPI m/m est. 0.3% vs. 0.1% and change in the total value of sales at the retail level, excluding automobiles - Core Retail Sales m/m predicted at 0.3% from 0.5%.

Australia – AUD

The only major fundamental news for Australia will be on Tuesday as Monetary Policy Meeting Minutes is due. It is a detailed record of the RBA Reserve Bank Board's most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates.

Trade set-ups

Without a fundamental backup, bearish GBPUSD setups are not advisable, due to a strong uptrend. Furthermore, Wednesday’s FOMC meetings set will provide a strong market volatility which could interfere or even change the ongoing trend, a following of the event is a must.

EURUSD bullish set-up:
a break above 1.130 will leave the price going 70 pips to TP of 1.137, SL 1.124

EURUSD bearish set-up:
a break below 1.122 will move the market 50 pips to TP of 1.117, SL 1.125

GBPUSD bullish set-up:
a break above 1.560 will leave the bulls going 90 pips to TP of 1.569, SL 1.553

GBPUSD bearish set-up:
a break below 1.545 will move the bears 80 pips down to TP of 1.537, SL 1.550

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