Monday's Week Ahead - 3rd to 7th June

Freefall in major government yields extended and accelerated last week. Meanwhile, it seemed that stocks investors finally woke up with sharply deteriorating sentiments. Major indices staged steep decline as risk aversion heightened. The first factor being the "ever-present" US-China trade tensions. Hard-line rhetorics from official media blossomed after Xi urged his citizens to prepare for a "new long march" earlier in the month.


Our Favourite assets we are watching this week:


#USD/CHF – Strongly Bullish on 4hr and Daily charts

Intraday bias in USD/CHF remains on the downside for the moment. Current fall from 1.0237 is in progress for 0.9879 key support next. Decisive break there will carry larger bearish implications. On the upside, break of 1.0098 is needed to indicate completion of such decline. Otherwise, outlook will stay mildly bearish in case of recovery.


#EUR/CHF – Strongly Bullish on 4hr and Daily charts

EUR/CHF’s decline extended to as low as 1.1171 last week and it’s now at a critical juncture. We’d still look for strong support from 1.1162 to contain downside to bring near term reversal. On the upside, break of 1.1278 resistance will suggest that fall from 1.1476 has completed and turn near term outlook bullish. However, sustained break of 1.1162 could carry larger bearish implication.

Week ahead: From a perspective of Economic Data, the ‘Medium- High Impact’ releases this week are as follows;


Monday – 03.06.2019

China’s Caixin PMI: The Caixin China Manufacturing PMI™, released by Markit Economics, is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 private manufacturing sector companies.

Markets to watch: CNY, AUD, USD & NZD crosses

US Manufacturing PMI: The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector It is a significant indicator of the overall economic condition in US. A result above 50 is seen as positive (or bullish) for the USD, whereas a result below 50 is seen as negative (or bearish).

Markets to watch: USD crosses and Gold


Tuesday - 04.06.2019


Australia’s Interest Rate Decision: RBA Interest Rate Decision is announced by the Reserve Bank of Australia. If the RBA is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the AUD. Likewise, if the RBA has a dovish view on the Australian economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.


Markets to watch: AUD Crosses

Euro’s CPI: The core Consumer Price Index released by Eurostat is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services excluding the volatile components like food, energy, alcohol and tobacco. The core CPI is a key indicator to measure inflation and changes in purchasing trends. Generally, a high reading is seen as positive or bullish for the EUR, while a low reading is seen as negative.

Markets to watch: EUR Crosses

US Powell’s Speech: Jerome H. Powell took office as a member of the Board of Governors of the Federal Reserve System on May 25, 2012, to fill an unexpired term. On November 2, 2017, President Donald Trump nominated Powell to serve as the next Chairman of the Federal Reserve. Powell assumed office as Chair on February 5, 2018.

Markets to watch: USD Crosses

Wednesday- 05.06.2019


US ISM: The ISM Non-Manufacturing Index released by the Institute for Supply Management (ISM) shows business conditions in the US non-manufacturing sector. It is worth noting that the non-manufacturing sector does not influence, either positively or negatively, the GDP as much as the ISM Manufacturing does. A result above 50 is positive (or bullish) for the USD.


Markets to watch: USD crosses

Thursday - 06.06.2019


ECB Interest Rate Decision & GDP : The deposit rate, announced by European Central Bank, is the interest rate paid on the surplus liquidity that credit institutions may deposit overnight in an account with a national central bank that is part of the Eurosystem.

The Gross Domestic Product released by the Eurostat is a measure of the total value of all goods and services produced by the Eurozone. The GDP is considered as a broad measure of the Eurozone economic activity and health. Usually, a rising trend has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).

Markets to watch: EUR crosses

Friday - 07.06.2019


US Average Hourly Earning & NFP: The Average Hourly Earning released by the US Department of Labor is a significant indicator of labor cost inflation and of the tightness of labor markets. The Federal Reserve Board pays close attention to when setting interest rates. A high reading is also positive for the USD, while a low reading is negative.

The nonfarm payrolls released by the US Department of Labor presents the number of new jobs created during the previous month, in all non-agricultural business. The monthly changes in payrolls can be extremely volatile, due to its high relation with economic policy decisions made by the Central Bank. The number is also subject to strong reviews in the upcoming months, and those reviews also tend to trigger volatility in the forex board. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish), although previous months reviews ​and the unemployment rate are as relevant as the headline figure, and therefore market's reaction depends on how the market assets them all.

Instruments to watch: USD crosses & XAU/USD

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