Good Morning, blokes.

This week was very light on the fundamental side. That trend is hopefully about to change. Today we have a good number economic events. The events from the US and Canada will get a lot of attention. Let’s check them out…

Today’s Top Economic Events

Japanese Yen – JPY

BOJ Policy Rate – By the time I write this review, the Bank of Japan will have released the interest rate decision. They left monetary stimulus unchanged in the final policy meeting of 2017, remaining on cruise control hoping it would raise the persistently low inflation. Currently, the policy rate is -0.10% and the impact remained muted.

BOJ Press Conference – We haven’t seen any change in the interest rate, therefore, the press conference will get a lot of attention. The BOJ’s Governor Haruhiko Kuroda will communicate with investors regarding monetary policy. It covers the factors that affected the most recent interest rate decision, the overall economic outlook, inflation, and clues regarding future monetary policy.

U.S. Dollar – USD

Final GDP q/q – At 13:30 (GMT), the Bureau of Economic Analysis will release the final gross domestic product of the US. Basically, the figure shows an annualized change in the inflation-adjusted value of all goods and services produced by the economy. It’s forecasted to be 3.3% vs. 3.3% in the month of September.

This is one of the main economic measures that central bankers use to determine future interest rates. Slower growth leads to dovish monetary policy and vice versa.

Philly Fed Manufacturing Index – At 13:30 (GMT), the Federal Reserve Bank of Philadelphia will release the manufacturing index with a forecast of 21.5 which is slightly on a lower side compared to the past figure of 22.7. This could maintain the bearish sentiment for the dollar. In the meantime, we also need to monitor unemployment claims.

Canadian Dollar – CAD

CPI m/m – At 13:30 (GMT), the Statistics Canada will be releasing the inflation figures. The CPI (consumer price index) is the change in the price of goods and services purchased by consumers. It’s the broadest measure of economic activity and the primary gauge of the economy’s health. For the moment, economists are expecting an increase in Canadian inflation from 0.1% to 0.2% and we may see some bullishness in the Loonie today.

Additionally, we have Core Retail Sales m/m on the table which is also positively forecasted at 0.4% vs. 0.3% last month. 

Today’s Top Trade Setups

EUR/USD –  Bullish Breakout

In our Dec 20 – Morning Brief, we discussed the fragile descending triangle pattern. Finally, the pair broke out of this triangle setup and gave us some bullish moves. For now, the $1.1830 resistance level will be working as a support.

EUR/USD – 240 – Mins Chart

The leading indicators are overbought and we may see a slight retracement up to $1.1820.

EURUSD – Key Trading Levels

Support     Resistance

1.1839       1.1895

1.1822       1.1912

1.1794       1.194

Key Trading Level:    1.1867

EUR/USD Trade Plan

Today, we need to monitor the $1.1830 as it can give us a good buying opportunity with a stop below 1.1790 and take profit at $1.1920.

USD/CAD – Inflation Figures In Focus  

The loonie strengthened against the dollar as investors seem to price in the positive inflation forecast. The pair is massively oversold and has a horizontal trendline support at $1.2815. It’s waiting for the economic data to decide whether to go further down or take a U-turn.

USD/CAD – 240 – Mins Chart

A break below $1.2815 can add further selling up to $1.2760. Above $1.2815, it’s likely to pull back to $1.2870.

USD/CAD- Key Trading Levels

Support     Resistance

1.282          1.2868

1.2806        1.2882

1.2782        1.2906

Key Trading Level:    1.2844

USD/CAD Trading Plan

I would like to take a small buy above $1.2815 with a stop below $1.2790 and take profit at $1.2860 before the release of news. Good luck and stay tuned for more updates.