Weekly Outlook | A pivotal week might offer more clarity
Updated Updated Wed, 2025 September 17 06:48
Important events this week:
Financial markets are expected to trade under more volatility during this week with four important interest rate decisions. At first, it is expected that the Bank of Canada will cut rates, which is expected to impact the Canadian Dollar. Then the most important decision will follow by the FED in the United States. During previous comments the chief Jerome Powell pointed out that markets offer a shift, which would enable the bank to potentially lower interest rates. The news is expected to shake up markets. In particular further moves of the Central bank might be questioned, which could lead to fresh liquidity in markets in general.
On Thursday and Friday, the BoE from England as well as the BoJ from Japan will also announce their interest rates moving forward. No change is being expected with the focus on the working if the Banks. The Pound looks slightly weaker as compared to other currencies and might even push lower against the AUD. Especially in Japan the high debt burden will not offer the Central Bank much room for adjustments. The Japanese Yen is also projected to weaken further against other currencies.
– CA- BoC interest rate decision- The Bank of Canada will decide upon their interest rate moving forward. It is expected that the rate will be reduced from 2.75% by 25 basis points to 2.50%. The Canadian Dollar has been under pressure in recent months and might lose further momentum following the news. Despite the rate decision and rate cut being priced in markets already, the “Loonie” might continue to lose momentum especially against the EUR.
EURCAD, daily chart
The clear uptrend can be seen on the daily chart above and due to the strength of the EUR this is expected to continue as well. Any correction in prices might add fresh buying power. The recent resistance line at 1.6115 might then act as a support whereas the rising 50- moving average near 1.16050 might also act as support should the market correct further. The decision will take place on Wednesday, 17th September at 15:45 CET.
– US- Interest Rate Decision- Finally, markets might get another rate cut by the Fed this month. US equity markets have been rising so far in September, which has been a rather difficult month for stocks traditionally. However, lower rates might help markets to rise further and the S&P 500 might break to a new all- time- high as well following the news release.
S&P 500, weekly chart
The weekly chart of the S&P 500 index shows the break higher after the prolonged sideways pattern in recent weeks. Any retest of the breakout zone might offer fresh upside. The zone at 6,400 points might act as important support and should markets start to correct further the recent resistance at 6,150 points might come into play for long-term entries. In any case lower rates should support more upside momentum The interest rate decision will follow on Wednesday, 17th September at 20:00 CET.
