Monthly Forex News Events that Might Affect EURUSD Volatility – July 2017

Monthly Forex News Events that Might Affect EURUSD Volatility – July 2017

Monthly Forex News Events that Might Affect EURUSD Volatility – July 2017

The technical forces have sent the EURUSD to new 2017 year highs more than the fundamental forces. The EURUSD rallied to more than 7-month despite the US Fed delivering a new rate hike at its June meeting and despite numerous signals coming from the ECB which isn’t just ready to widen down the stimulus program. The focus now is shifting to the summer trading conditions as there aren’t many fundamental drivers in the upcoming month, which can impact the EURUSD exchange rate.

The month of July is set to be a very quiet month it terms of price activities as there aren’t any major risk events that can disrupt the EURUSD volatility. The seasonal pattern for July sees the EURUSD exchange rate moving slightly higher which means that the current bullish trend has higher chances to remain intact or at least not to see any major reversal.

The seasonal pattern only gives us the tendency of a particular currency to exhibit a certain behavior at a certain time, so we have to carefully monitor the pattern and how the fundamental forces interact with the price action.

Going forward, we’re going to analyze and disseminate the major news event for the upcoming month that can be the catalyst for higher EURUSD volatility.

“Don’t risk significant money in front of key reports, since that is gambling not trading.” Paul Tudor Jones

Monthly Forex News Events that Might Affect EURUSD Volatility – July 2017

The month of July will only bring some minor risk events that can be the catalyst for the EURUSD to exhibit higher volatility. The two main risk events are the Fed interest rate decision which is highly expected to hold rates while on the other side of the monetary policy spectrum we have the ECB interest rate decision. The ECB stand firm by its stimulus program and no major changes in monetary policy are expected.

  • Monday, July 3, 2017 – First trading day of the month kicks off with the US ISM Manufacturing PMI figures. We had a strong May reading of 54.9 slightly above market expectation. The current White House administration has made big progress in support of the US manufactures and we should expect another strong positive reading in July.
  • Wednesday, July 5, 2017 – The FOMC meeting minutes will give trades more details into the June Fed rate hike. The latest press Fed press conference has shown that Janet Yellen is no longer dovish on interest rate hikes. The market is also expecting one more rate hike until the end of 2017 and the FOMC minutes can give traders more insights into the timing of the next rate hike.
  • Friday, July 7, 2017 – The Non-Farm Payrolls Report is one of the most awaited figures especially for Forex traders. The NFP missed expectation as the US only added 138k new jobs but the market is expecting the summer part-time jobs to boost the NFP figures. The unemployment rate also inched lower to 4.3%, the lowest figure in the last 16 years. The market consensus is for a figure above the 200k mark
  • Friday, July 7-8, 2017 – The G20 Hamburg summit will gather together the heads of states of the most powerful economies in the world. The top agenda will be topics related to the free trade agreements which can be the catalyst for some uncertainty due to the current divergence among the USA and other major economies. The US president Trump and Russian president Putin will also meet for the first time at the G20 summit which can generate some worthy headlines.
  • Thursday, July 13, 2017 – The US PPI inflation has held steady despite lower prices in the energy sector. The PPI inflation is the Fed favorite measurement of inflation which makes it a big risk event as traders will speculate big time in the event inflation is approaching the 2% Fed’s inflation target.
  • Friday, July 14, 2017 – The US Retail sales missed market expectation of 0.1% and dropped -0.3% in May. This was the biggest drop in more than a year. Retail sales are expected to pick up again during the second half of the year.
  • Thursday, July 20, 2017 – The ECB interest rate decision followed by resident Mario Draghi’s press conference will be the highlight of the day. Even though the ECB acknowledges that the inflation has picked up substantially it still looks like the QE tapering process will not start anytime soon. The market consensus is for the ECB monetary policy to remain unchanged.
  • Wednesday, July 26, 2017 – The Fed interest rate decision and the FOMC statement is the main risk event. No press conference is expected and based on the general consensus the Fed should hold interest rates at current levels and only look to hike one more time in 2017 bear the end of the year.
  • Friday, July 28, 2017 – The Advance US GDP figures for the second quarter of 2017 are scheduled to be released. The US GDP only increased by 1.2% during the first quarter of the year versus 0.9% forecasted. The US economy is expected to grow by 2.2% in 2017 lower than 2016’s GDP rate of 2.6%.

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