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Got another busy week coming up!

This time we’re looking at a handful of inflation reports from major economies, plus retail sales data from the U.S. and China.

Before that, ICYMI, I’ve written a quick recap of the market themes that pushed currency pairs around last week. Check it!

And now for the closely-watched potential market movers this week:

Major Economic Events:

U.S. inflation reports (Sept. 13, 12:30 pm GMT) – Dollar traders must be pretty eager to set their sights on Uncle Sam’s latest CPI readings since these could seal the deal for another 0.75% Fed rate hike.

Analysts are expecting to see a slowdown in headline inflation, though, as the August figure likely fell 0.1% after staying flat in July. This would mark its first negative reading since May 2020, which might suggest that U.S. inflation has peaked.

Meanwhile, the core figure likely chalked up another 0.3% gain. Weaker than expected results might dash hopes for another big tightening move later this month.

Later in the week, the U.S. economy will release its PPI data (Sept. 14, 12:30 pm GMT) and possibly print a 0.1% dip in headline producer prices and a 0.3% uptick in core PPI.

U.K. CPI (Sept. 14, 9:30 pm GMT) – The U.K. economy will also be releasing its inflation figures for August this week, and many are hoping that price pressures steadied at 10.1% year-over-year.

Another uptick in CPI would up the pressure on the BOE to accelerate their interest rate hikes in order to keep stagflation from worsening. The core CPI likely ticked higher from 6.2% to 6.3% for the month.

New Zealand Q2 GDP (Sept. 14, 10:45 pm GMT) – After reporting a 0.2% contraction for the first three months of this year, New Zealand’s economy is expected to rebound with a 1.0% GDP figure for Q2.

Retail sales reports – We’ll get a round of consumer spending data towards the end of the week, with the U.S., China and the U.K. printing their retail sales figures for August.

Spending is expected to have stagnated in the U.S., as the headline retail sales likely stayed flat while the core figure probably saw another 0.3% uptick. This might be a sign that higher borrowing costs are starting to affect the consumer sector, possibly giving the Fed enough reason to take it easy.

Over in China, retail sales probably picked up from 2.7% to 3.2% year-over-year in August, although traders might take the figures with a grain of salt due to the latest round of lockdowns in the country.

In the U.K., consumer spending likely slowed by 0.5% in the past month, as consumers are probably reeling from the sharp gains in cost of living.

Forex Setup of the Week: AUD/USD

Week Ahead in FX (September 12 – 16): Spotlight on Consumer Spending & Inflation

AUD/USD 4-hour Forex Chart

I’m seeing a textbook trend retracement play right here!

AUD/USD is pulling back to the area of interest just below the .6900 handle, which happens to be in line with the 100 SMA dynamic resistance and falling trend line on the 4-hour chart.

If this is enough to send the pair back in selloff mode, we might just see another dip to the .6700 area or lower.

Technical indicators are confirming that resistance is likely to hold, as the 100 SMA is below the 200 SMA while Stochastic is reflecting overbought conditions.

I’d look out for strong U.S. CPI and retail sales figures before hopping in a short play. After all, these could get dollar bulls excited for another 0.75% rate hike in the next FOMC meeting.

On the other hand, disappointing figures from Uncle Sam might mean more downside for the scrilla, so I’ll watch out for a trend reversal setup in that case.