The focus for the Fed’s press conference on Wednesday night is on whether there’s any hint about a hike in the fourth quarter. Traders mostly expect this to be the last hike of this cycle for the moment, but it’s likely that the Consensus will change at least slightly after Jerome Powell’s comments. Friday’s PCE is also important since this is the Fed’s main measure for inflation. Continuing decline as expected would weaken the hawkish case for the Fed.

Key data this week

Bold indicates the most important releases for this symbol.

Wednesday 26 July

• from 18:00 GMT: statement and press conference of the Federal Open Market Committee

Thursday 27 July

• 12:30 GMT: American quarterly GDP growth (advance, Q2) – consensus 1.7%, previous 2%
• 12:30 GMT: American monthly durable goods orders (June) – consensus 0.7%, previous 1.7%

Friday 28 July

• 12:30 GMT: American annual PCE (June) – consensus 2%, previous 3.8%
• 12:30 GMT: American annual core PCE (June) – consensus 4.2%, previous 4.6%

Euro-Australian dollar, daily

The lack of a clear result from Spain’s elections has been somewhat negative for the euro, but the apparently worsening economic downturn in the eurozone would traditionally be more significant. However, inflation has declined steadily this year and the ECB has maintained its hawkish policy, Australian employment figures remain strong, suggesting ongoing inflationary pressure and possibly more hikes by the Reserve Bank of Australia. Assuming that the ECB delivers on a single hike on Thursday, buying EURAUD will yield a carry for the first time.

The triple top on the chart since 28 June would usually be a sell signal. However, the price remains in a weakly defined ascending triangle above all the moving averages and not in overbought on the daily chart based on the slow stochastic. $1.655 is an important resistance but if the price can break through it a retest of $1.67 sooner or later seems likely. To the downside, $1.60 is an important medium-term support as a round number which coincides with the 200 SMA.

Most traders currently expect the ECB to hike again on 14 September, so the press conference is important on Thursday as on Wednesday for the Fed. A direct confirmation is unlikely but mentions of inflation coming down too slowly or relative confidence in economic performance might solidify that consensus. It’s likely that participants will start looking ahead to October’s meeting of the ECB as well after digesting the overall impression from the press conference. Equally, Wednesday’s inflation from Australia might be higher than expected, which could bring some short-term gains for the Aussie dollar.

Key data this week

Bold indicates the most important releases for this symbol.

Tuesday 25 July

• 8:00 GMT: German Ifo Business Climate (July) – consensus 88, previous 88.4

Wednesday 26 July

• 1:30 GMT: Australian annual inflation (Q2) – consensus 6.2%, previous 7%
• 1:30 GMT: Australian quarterly inflation (Q2) – consensus 1%, previous 1.4%

Thursday 27 July

• 6:00 GMT: German GfK consumer confidence (August) – consensus negative 24.7, previous negative 25.4
• from 12.15 GMT: statement and press conference of the European Central Bank

Friday 28 July

• 8:00 GMT: German quarterly GDP growth (flash, Q2) – consensus 0.3%, previous negative 0.3%
• 8:00 GMT: German annual GDP growth (flash, Q2) – consensus negative 0.6%, previous negative 0.5%
• 12:00 GMT: German non-core annual inflation (preliminary, July) – consensus 6.2%, previous 6.4%

Last week’s weekly data preview looked at GBPUSD & USOIL…

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