Inflation, GDP, key data releases for next week

A quiet consolidative Friday to close the week, sees dollar higher against most of its rivals, exception made by Aussie that seems to be ready to extend its advance. The FED has been the reason of such dollar strength, but also worth’s mentioning that in most pairs, critical levels had held so far and that continued dollar weakness may have finally triggered some corrections rather than a trend change. Whether current greenback strength could last, will probably depend in the results of upcoming week data, as key releases including inflation and GDP readings for several major economies, will keep trades entertained again: 

In the UK, inflation readings will hit the wires on Tuesday, with YoY CPI expected unchanged at 1.6%.On Thursday, it will be the turn of GDP, expected at 2.7% from 1.9% yearly basis, both key measures of the health of the kingdom: considering latest Pound weakness, readings below expected in both figures will likely favor a continued slide particularly against recently strengthened dollar, with chances of a full 100% retracement in GBP/USD down to 1.6250, this year low.

As for Europe, attention will focus in European PMIs as soon as Monday, and German inflation by the end of the week: PMI’s had been pretty positive lately, exception made by France. And upcoming readings are also expected below previous ones, while German numbers are expected to decline either: if expectations are missed, the EUR could suffer a kneejerk and test again key 1.3750 area against the greenback. 

In the US, the week with be fulfilled with fundamental readings, including GDP, Durable Goods Orders and even a Bank Stress test: the  market will trade these in regards to FED’s outlook and possible upcoming economic policy moves. But latest dollar recovery is still unsustainable in the long term, so disappointing data will likely jeopardize such recovery and put the greenback back in the bearish path.