Market Analysis

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July 10, 2020 04:56 am

Fundamental Forex analysis for the week of July 13-17

Monday, July 13


The macroeconomic calendar on Monday is practically empty, and the market will be able to rely only on some political factors if they arise. The trading day will be held in a completely calm manner.


Tuesday, July 14


On Tuesday, Japan will present its data on industrial production, and these statistics are likely to put pressure on the yen. The decline in industrial production may accelerate from -15.0% to -25.9%.


But the British currency can get support from its data on industrial production: experts predict a slowdown in its decline from -24.4% to -14.3%. A similar situation is possible in the eurozone, where the rates of decline in production should slow down from -28.0% to -20.2%.


The highlight of the day will be the publication of inflation data in the United States, where consumer price growth can accelerate from 0.1% to 0.4%. In the event of inflation growth, the US Federal Reserve will not take any measures to further mitigate monetary policy, and this could be a positive factor for the US dollar.


Wednesday, July 15


On Wednesday, a meeting of the Board of the Bank of Japan will take place, it is expected that the regulator will leave the monetary policy parameters unchanged, since there is simply nowhere to soften it.


The pound on Wednesday will come under pressure after the release of inflation data in the UK. Unlike the United States, the indicator should decline from 0.5% to 0.4%. A decrease in inflation will be the reason for expanding the program of quantitative easing or lowering the refinancing rate.


The US dollar will receive support from industrial production data, the decline of which should slow down from -15.3% to -6.2%. The day will end with a meeting of the Bank of Canada. The regulator will leave the policy unchanged and is unlikely to share his plans for the future.


Thursday, July 16


Thursday will be the day the New Zealand dollar declines, as inflation in New Zealand should fall from 2.5% to 1.6%. This is a rather sharp decline, so that the country's monetary authorities can take any steps to prevent slipping into deflation.


The Australian dollar will also be under pressure, as Australia's unemployment rate should rise from 7.1% to 7.5%. And the British pound will suffer due to rising unemployment from 3.9% to 5.1%.


The main event on Thursday will be a meeting of the Board of the European Central Bank. It is expected that the regulator will not take any steps, however, new measures to support the economy may be announced, up to an even larger expansion of the quantitative easing program. In this case, the euro will be hit hard. But its main competitor, the American dollar, on the contrary, will feel comfortable on Thursday. The fact is that the decline in retail sales should slow down from -6.1% to -3.0%. And the number of applications for unemployment benefits in the States should continue to gradually decline.


Friday, July 17


On Friday, the single European currency may win back some of the losses, as inflation in the region should rise from 0.1% to 0.3%. At the same time, there is every reason to believe that the data will turn out to be slightly better than forecasts.


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