The past week saw fairly dramatic developments in the forex market. While the Swiss franc approached record highs, the price of crude oil skyrocketed well past $100 a barrel. Next week promises to be equally volatile. In addition to the continuous developments unfolding in the Middle East, traders will want to take into account a number of potentially significant news events that are likely to shake up the market.
Here is a preview of next week’s main economic indicators:
Monday’s US Pending Home Sales figure is forecasted to come in significantly below last month’s. If true, traders are likely to use the report as further evidence that the US economic recovery is faltering which could result in another bearish day for the USD.
Traders can expect a heavy day on Tuesday, with several significant indicators coming out of the UK. Both the Nationwide HMI and Manufacturing PMI are expected to come in below last month’s levels. The UK pound has been steadily rising against several of its main rivals as of late. If Tuesday’s figures come in as predicted, the currency could turn bearish.
On Wednesday, all eyes will be on the US ADP Non-Farm Employment Change figure. The ADP number is a solid predictor of what the official Non-Farm figure will be, and is widely considered one of the leading indicators of economic health in the United States. Traders will want to pay attention to analyst predictions before this figure is released, as it is likely to generate heavy volatility.
On Thursday, traders will want to pay attention to the ECB Minimum Bid Rate. There has been a lot of speculation as of late regarding when the ECB will raise interest rates. If that day happens to be on Thursday, the euro is likely to gain heavily as a result.
Finally, Friday’s US Non-Farm Employment Change figure and Unemployment Rate are both expected to generate significant amounts of market volatility. The Non-Farm figure in particular always leads to heavy market activity. If the end result shows any improvement in the US economy the dollar may be able to rebound from its current bearish cycle.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
