Forex Signals Brief for August 16th – FOMC Meeting Minutes In Focus
Arslan Butt • 2 min read
Today, you can feel the excitement of the FX Junkies as they wait to trade top tier economic events from three big economies with the US FOMC at the top of the list. Read ahead to find out what to look for in the FOMC minutes!
Top Economic Events Today
GBP – Labor Market Figures
Average Earnings Index 3m/y is due to be released at 8:30 GMT and economists are expecting it to be 1.8%, just like the previous month's. This a leading indicator of consumer inflation – when businesses pay more for labor the higher costs are usually passed on to the consumer. It leads to inflation and a hike in inflation ultimately forces central banks to hike the interest rates.
Similarly, the Office for National Statistics is likely to release the Claimant Count Change with a forecast of 3.2K, lower than 5.9K (previous). This is the first indication of the employment situation, released a month earlier than the Unemployment Rate.
Simultaneously, the Office for National Statistics will also release the Unemployment Rate, but economists are expecting it to remain unchanged at 4.5%. Nonetheless, a surprise will definitely lead to good trade opportunities. So, let's keep an eye on it.
EUR – Euro
The Flash GDP q/q is expected to come out at 9:00 (GMT) with a neutral forecast of 0.6%. The point to focus on is, the Eurostat has revised the figure for the previous month from 0.5% to 0.6%. This change supports the single currency Euro.
FOMC Meeting Minutes – What To Expect?
The FOMC Meeting Minutes are due to be released at 18:00 (GMT). The Federal Reserve (Fed) officials have drafted a plan to reduce their $4.5 trillion balance sheet, but have yet to decide the starting point.
Basically, these meeting minutes will reflect the July 26th meeting. The Fed hiked the rates in the month of June and also signaled one more hike in the second half of 2017. Now we have to analyze if they continue spreading the same tone and keep supporting the dollar, which is in trouble nowaday due to hawkish stance from peer economies.
EUR/USD – Head & Shoulder Pattern In Play
Yesterday, EUR/USD made a bearish movement and hit our target at $1.1745. Bears entered the market after the German economy grew by 0.6%, missing the consensus forecast of 0.7%.
EURUSD – 2-Hour Chart – Target Hit
Now, the pair is still trading lower and has formed a head and shoulder pattern, a bearish one. EUR/USD is likely to complete the right shoulder at $1.1680.
EURUSD – 2-Hour Chart – Head & Shoulder Pattern
In my previous update, I discussed the new sideways to the slightly bearish channel on the 2-hour chart, the pair is still consolidating in the same way.
EUR/USD – Key Trading Levels
EUR/USD Trading Plan
Investors are advised to keep a check for $1.1738 as it's a trend decider for today. Below this, the pair can target $1.1680. While, on the upside, it has the potential to go for $1.1800.
Fellows, keep following us for more updates and trades. All the best and trade with care!