- UK Inflation Report
- Bank of England’s Mervyn King Speaks
- Australia & New Zealand Employment Change (later tonight)
Risk selling is hitting the markets this morning. The question for traders is whether the rally that began after last Friday’s NFP has fizzled and we are back to worrying about the EU, or is the current weakness simply profit taking. Looking ahead, Forex traders will be focusing on today’s Bank of England Inflation Report. After seeing UK GDP falling by 0.7% in its latest Q2 report, consensus among traders is that the Bank of England will lower their growth forecasts to 0.0% for the year from their previous estimate of 0.8% growth in 2012. If they don’t take down their numbers, the BoE will need to offer a very convincing reason why they believe the second half will show improvements. Charts to Watch EURUSD: After a nice move higher, the EURUSD’s rally has hit resistance as it approached the 1.2400 figure. Currently, the pair has been consolidating between the 1.2330 and 1.2350 level. The current trading action suggests we could be seeing a potential breakout trade taking place if the EURUSD trades above 1.2400 resistance or falls below last week’s lows.