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Analysis

This weeks key events | 3 markets to watch this week 20th May 2024

BY Janne Muta

|May 20, 2024

Canada reports the April CPI numbers on Tuesday, 21st May and it is the last one before the BoC rate decision on the 5th June. Some analysts think there is less than 50% probability of a rate cut. Therefore, a higher-than-expected (2.8%) reading could boost the CAD and potentially create trading opportunities.

The Reserve Bank of New Zealand (RBNZ) is not expected to change the cash rate from 5.5% and the markets are pricing this in at the moment. Market pricing suggests the next cut could happen in August to October meetings, even though the central bank itself has alluded that the next rate cut might not come in before 2025. This leaves room for surprise should the RBNZ decide to cut earlier the market could see added volatility creating opportunities for both intraday and swing traders.

On Wednesday, 22nd May, we'll see what the Fed discussed in their latest meeting. The FOMC meeting minutes could in theory surprise the markets by offering new insights into the Fed’s policy. If this new information deviates strongly from expectations for the Fed’s rate policy, it could cause a lot of volatility. The markets are currently pricing in a no-change scenario until the Fed's September meeting with a probability for a 25 bp cut in September at around 62%.

USDCAD

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USDCAD has traded lower by approximately 1.2% in May. At the same time, the price of oil has stabilised suggesting traders expect the oil market to appreciate which in turn would support the Canadian dollar. Technically the market is in a downtrend with the moving averages pointing lower and the fast SMA(20) below the slower SMA(50). Downside momentum has slowed somewhat after the market moved to a major support level at 1.3609. If the bulls want to reverse the trend they need to push the market above Friday's high at 1.3643. This move (if decisive enough) would open the way to 1.3690. Alternatively, a break below 1.3590 might move the market to 1.3560 and then perhaps below the support created by the lower end of the descending price channel and a swing low at 1.3547.

NZDUSD

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The former daily downtrend in the NZDUSD has turned into a healthy upside swing. The market has broken out of a bearish trend channel and rallied strongly higher. This upside momentum suggests the market could be in a buy-the-dips mode. If buyers engage the market after retracements to support levels we could see further continuation of this uptrend. The nearest key support levels to focus on are 0.6040 and 0.6095 while the nearest key resistance level is at 0.6216. Alternatively, if the support levels do not hold, look for a move down to 0.5980 and then perhaps to 0.5950.

Dow Jones

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The Dow has rallied to ATH levels once again. The market is trading near the April peak after trending strongly over the last three weeks. In the 8h chart, the Dow remains in an uptrend above the bull channel low and the latest swing point at 39,826. If the level holds we could see the bullish trend continuing and the market possibly moving to 40,430. Alternatively, if the level is penetrated decisively, look for a move to 39,320 and then possibly to 39,028 on continuation.

This weeks high impact market events

The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks. Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.

All times are GMT +3

Tuesday 21st May

Time
3:30 PM
8:00 PM
Currency
CAD
CAD
CAD
GBP
Impact
Hight
Hight
Hight
High
Event
CPI m/m
Median CPI y/y
Trimmed CPI y/y
BOE Gov Bailey Speaks

Wednesday 22nd May

Time
5:00 AM
9:00 AM
9:00 PM
Currency
NZD
NZD
NZD
GBP
USD
Impact
High
High
High
High
High
Event
Official Cash Rate
RBNZ Monetary Policy Statement
RBNZ Rate Statement
CPI y/y
FOMC Meeting Minutes

Thursday 23rd May

Time
10:15 AM
10:30 AM
11:30 AM
3:30 PM
4:45 PM
Currency
EUR
EUR
EUR
EUR
GBP
GBP
USD
USD
USD
Impact
High
High
High
High
High
High
High
High
High
Event
French Flash Manufacturing PMI
French Flash Services PMI
German Flash Manufacturing PMI
German Flash Services PMI
Flash Manufacturing PMI
Flash Services PMI
Unemployment Claims
Flash Manufacturing PMI
Flash Services PMI

Friday 24th May

Time
9:00 AM
5:00 PM
Currency
GBP
USD
Impact
High
High
Event
Retail Sales m/m
Revised UoM Consumer Sentiment

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While research has been undertaken to compile the above content, it remains an informational and educational piece only. None of the content provided constitutes any form of investment advice.

TIO Markets UK Limited is a company registered in England and Wales under company number 06592025 and is authorised and regulated by the Financial Conduct Authority FRN: 488900

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

DISCLAIMER: TIO Markets offers an exclusively execution-only service. The views expressed are for information purposes only. None of the content provided constitutes any form of investment advice. The comments are made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.








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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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