Start your trading week right by prepping for these top-tier catalysts and checking out my potential trade setup.
Don’t forget to review which factors drove forex market price action last week, too!
Major Economic Events:
Fed head Powell’s speech (June 22, 6:00 pm GMT) – After the jaw-dropping moves spurred by the FOMC announcement last week, dollar traders might still be extra sensitive to more remarks from the main man himself.
Powell is scheduled to talk about the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis.
Better keep your eyes and ears peeled for any hints on when the central bank might reduce their stimulus efforts!
Eurozone flash PMIs (June 23, starting 7:15 am GMT) – It’s the third week of the month, which means it’s time for a fresh batch of leading indicators from the top dawgs of the euro region!
France is expected to report a dip in its flash manufacturing PMI from 59.4 to 59.0 and an improvement in its services PMI from 56.6 to 59.6, reflecting a stronger pace of industry expansion.
Germany is slated to show a decline from 64.4 to 63.0 in its flash manufacturing PMI, indicating a slower pace of industry growth, and a climb from 52.8 to 55.4 in its services PMI.
This should bring the region’s flash manufacturing PMI down from 63.1 to 62.0 and the flash services PMI up from 55.2 to 57.6.
U.K. flash PMIs (June 23, 8:30 am GMT) – The U.K. economy is expecting to see a dip from 65.6 to 64.1 in its manufacturing PMI and no change in its services PMI at 62.9 for June.
U.S. flash PMIs (June 23, 1:45 pm GMT) – Uncle Sam is also due to report its June flash PMIs, with the manufacturing sector likely showing a dip from 62.1 to 61.5 and the services industry posting a decline from 70.4 to 70.0.
BOE monetary policy statement and MPC minutes (June 24, 11:00 am GMT) – No actual interest rate changes or asset purchases adjustments are expected for the time being, but any shift in bias among MPC members might spur big moves.
Recall that one committee member (Haldane) already voted to reduce the total size of asset purchases in the earlier policy meeting, and the pressure could be mounting for other policymakers to consider trimming stimulus as well.
Take note, however, that there is no presser or update on economic forecasts this time. This suggests that the central bank might wait until the next meeting in August before possibly announcing big changes.
Forex Setup of the Week: EUR/GBP
With this week’s main catalysts coming from the eurozone and the U.K. economy, I’m counting on big moves from this EUR/GBP pair.
Price has formed lower highs and lower lows inside a descending channel on its 1-hour time frame, and it looks like another test of resistance around .8600 is due.
Will sellers defend the ceiling?
If the channel top holds, EUR/GBP could retreat to the swing low at .8540 or all the way down to the channel bottom around the .8500 handle. A break past the resistance, on the other hand, could mark the start of a reversal.
Some dips are eyed for the German and French flash manufacturing and services PMIs while the BOE is expected to shift to a more hawkish stance. If it all lines up this way, EUR/GBP is likely to carry on with its slide.