Errante’s The Week Ahead: 17th – 21st February 2025

Errante’s The Week Ahead: 17th – 21^st February 2025

Highlights of the Week:

RBA and RBNZ Meetings: Market expectations for potential rate cuts in Australia and New Zealand.

Global Central Bank Speeches: Key insights into international monetary policy trends.

Flash PMI Releases: Early indicators of economic performance in Europe and the U.S.

What Now?

This week focuses on the Oceanic currencies as investors anticipate key central bank decisions. The Reserve Bank of Australia (RBA) is widely expected to lower interest rates, which could place downward pressure on the Australian dollar. Similarly, the Reserve Bank of New Zealand (RBNZ) will hold its policy meeting, with traders keenly watching for any shifts in tone regarding inflation and economic stability.

Beyond the Pacific, central bank officials from major economies will be delivering speeches, potentially providing clues on the future trajectory of monetary policies. Given the ongoing debate over inflation persistence and labor market resilience, these statements could drive volatility across FX markets.

Additionally, flash PMI reports from Europe and the U.S. will offer a preliminary outlook on economic activity. If data suggests continued expansion, it could support risk sentiment, whereas weaker figures may reinforce concerns over slowing global growth.

Upcoming Data and Events:

All times are in GMT+2.

Monday, February 17, 2025:

No important event

Tuesday, February 18, 2025:

5:30 AM – AUD – Cash Rate: RBA’s latest decision on interest rates and policy direction.

5:30 AM – AUD – RBA Monetary Policy Statement: Key insights into the RBA’s economic assessment.

5:30 AM – AUD – RBA Rate Statement: Commentary on future rate expectations.

9:00 AM – GBP – Claimant Count Change: Key labor market indicator for the UK.

11:30 AM – GBP – BoE Gov Bailey Speaks: Potential signals on future BoE policy direction.

3:30 PM – CAD – CPI m/m: Monthly consumer price changes, impacting BOC’s rate path.

3:30 PM – CAD – Median CPI y/y: A measure of underlying inflation trends.

3:30 PM – CAD – Trimmed CPI y/y: A refined inflation measure excluding volatile items.

Wednesday, February 19, 2025:

2:30 AM – AUD – Wage Price Index q/q: Key metric for wage inflation in Australia.

3:00 AM – NZD – Official Cash Rate: RBNZ’s interest rate decision.

3:00 AM – NZD – RBNZ Monetary Policy Statement: Outlook on inflation and growth.

3:00 AM – NZD – RBNZ Rate Statement: Commentary on economic conditions.

4:00 AM – NZD – RBNZ Press Conference: Market-moving statements on rate guidance.

9:00 AM – GBP – CPI y/y: Yearly inflation data impacting BoE rate expectations.

9:00 PM – USD – FOMC Meeting Minutes: Detailed discussion of the Fed’s latest policy meeting.

Thursday, February 20, 2025:

2:30 AM – AUD – Employment Change: Key labor market data for Australia.

2:30 AM – AUD – Unemployment Rate: Australian labor market conditions.

3:30 PM – USD – Unemployment Claims: Weekly measure of U.S. jobless claims.

Friday, February 21, 2025:

12:30 AM – AUD – RBA Gov Bullock Speaks: Potential insights into Australian monetary policy.

9:00 AM – GBP – Retail Sales m/m: Key indicator of consumer spending in the UK.

10:15 AM – EUR – French Flash Manufacturing PMI: Preliminary manufacturing data.

10:15 AM – EUR – French Flash Services PMI: Early look at France’s service sector.

10:30 AM – EUR – German Flash Manufacturing PMI: Indicator for German industry performance.

10:30 AM – EUR – German Flash Services PMI: Preview of Germany’s service sector activity.

11:30 AM – GBP – Flash Manufacturing PMI: First glimpse of UK’s manufacturing data.

11:30 AM – GBP – Flash Services PMI: Preliminary UK services sector performance.

3:30 PM – CAD – Core Retail Sales m/m: Retail sales measure excluding volatile components.

3:30 PM – CAD – Retail Sales m/m: Overall retail spending trends in Canada.

4:45 PM – USD – Flash Manufacturing PMI: Early manufacturing sector performance in the U.S.

4:45 PM – USD – Flash Services PMI: Early U.S. service sector performance.

7:30 PM – CAD – BOC Gov Macklem Speaks: Bank of Canada Governor’s policy insights.

Market Insights: Key Charts to Watch

EUR/USD – Daily Chart:

EUR/USD has been in a downtrend since October 2024 but broke out last week, signaling a potential trend reversal. The breakout suggests an upward movement with possible targets ahead. Bollinger Bands are shifting to a positive slope, confirming the strengthening momentum, while RSI has made a bullish divergence with the price action. The key levels to watch are:

Key Levels

Resistance: 1.0485, 1.0541, 1.0602, 1.0701

Support: 1.0442, 1.0381, 1.0282

Alternative Scenario

A decline below 1.0381 could invalidate the bullish breakout, pushing the pair lower toward the 1.0282 support level.

GBP/USD – Daily Chart:

GBP/USD has been in a descending channel since October 2024 and broke out last week, indicating a potential trend reversal. If the breakout sustains, the pair could move higher toward key resistance levels. The next upside targets include 1.2549, 1.2608, and 1.2766.

Key Levels

Resistance: 1.2608, 1.2684, 1.2767

Support: 1.2550, 1.2466, 1.2332

Alternative Scenario

A move back below 1.2466 could signal a false breakout, with price action likely returning to the descending channel.

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