It is very likely that the difference between success and failure in Forex/CFD trading depends primarily on which assets you choose to trade each week and in which direction, and not on the exact methods you might use to determine trade entries and exits.
Therefore, at the beginning of the week, it is a good idea to look at the big picture of what is developing in the market as a whole and how such developments are influenced by fundamentals macros , technical factors and market sentiment.
Over the past week, market sentiment towards the United States has begun to falter. Sentiment was positive a week ago, when data appeared to show that the US economy was cooling, eliminating the need for further rate hikes by the Fed. However, now there is growing sentiment, supported by the latest economic data Americans, that the American economy is not cooling sufficiently and that the CPI (inflation) data expected this week will show a continuation rather than a reduction in inflationary pressure. . This could make it more likely that even if the Fed doesn't raise rates at its end-of-month meeting, it might do so at its next meeting in November.
Markets will eagerly await the release of US CPI (inflation) data this week and the policy meeting at the European Central Bank. On an annual basis, inflation is expected to rise again from 3.2% to 3.6%, while the ECB is expected to keep the interest rate unchanged at 4.25%.
Little data of major importance to the Forex market was released last week and as a result, directional volatility in the market was very low.
The main events of the past week were policy releases from the Bank of Canada and the Reserve Bank of Australia. Both banks left rates unchanged, as expected, but the Bank of Canada's rhetoric was a little more aggressive than expected. However, overall, the measures taken had little effect on the respective currencies.
The US dollar continued to show strength last week and several commodities rose, most notably WTI crude oil, which hit a new multi-month high.
Other key data released last week were:
- Australian GDP: met expectations.
- US unemployment claims – slightly better than expected.
- ISM US Services PMI: Slightly better than expected.
- Canadian unemployment rate: slightly better than expected.
- China CPI (inflation): Slightly better than expected.
The week ahead: September 11th – September 15th
Next week will probably see a level of on the markets volatility considerably higher than last week, as we see the end of the summer season and a return to a higher volume market. The key data released this week are, in order of importance:
- US CPI (inflation)
- US PPI
- US retail sales
- Preliminary UoM consumer sentiment in the US
- European Central Bank main refinancing rate and rate statement
- Unemployment claims in the United States
- Chinese industrial production
- US Empire State Manufacturing Index
- UK GDP
- Change to UK claimant count
- Australian unemployment
Credit by DailyForex.com
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