Chinese Data Fest, Inflation Insights, Top Trades & Building An Unshakeable FX Routine

Welcome to Currency & Coffee!

Your go-to weekly digest for all things forex, sprinkled with a touch of fun and wrapped in simplicity. Let's conquer the markets and elevate our trading game, one sip at a time!

Here’s what we have covered today:

☕ Chinese data fiesta, Inflation reports and PMI’s galore.

☕ This week's money makers.

☕ Building a Rock-Solid Trading Routine

🗞️Movers & Shakers🗞️

🇨🇳 China's Data Fiesta ( Apr 18th, 2am GMT):

We'll get a sneak peek at China's post-reopening activities! Brace yourself for the data fiesta coming from the world's second-largest economy. Strong data could boost the yuan, while disappointing numbers may weaken it.

Expect annual GDP to jump from 2.9% to 3.2% in Q1, while quarterly growth might rise from 0.0% to 1.7%. Remember, the People’s Bank Of China (PBoC) Governor recently confirmed a 5% growth target for 2023. A few more deets: fixed asset investment could dip (5.5% to 5.3% ytd/y), but industrial production and capacity utilisation should improve.

Unemployment may drop to 5.5% on the consumer front, and March retail sales could surge to 4.5% y/y.

Don't forget that the disappointing data might prompt traders to expect more PBoC intervention, affecting the yuan.

Inflation Reports Galore :

After the US, it's time for Canada, Japan, the UK, and New Zealand to reveal their inflation data! Will we see similar slowdowns? Slower inflation could soften currencies, while faster inflation might boost them.

🇨🇦 Canada (Apr 18, 12:30pm GMT): Expect a drop in annual headline inflation (5.2% to 4.1%) and core inflation (4.7% to 4.3%). Slower figures would support BOC's mid-2023 inflation target of 3%, impacting the loonie.

🇬🇧 UK (Apr 19, 6:00am GMT): Headline CPI might cool off to 9.8% y/y in March. Any surprises could contradict BOE's inflation deceleration outlook, affecting the pound.

🇳🇿 New Zealand (Apr 19, 10:45pm GMT): Expect Q1 annual inflation to slow down (7.2% to 7.0%), but the quarterly rate might tick up (0.4% to 0.6%), influencing the kiwi.

🇯🇵 Japan (Apr 20, 11:30pm GMT): Annual headline inflation could slip (3.3% to 3.2%), but core inflation might hold steady at 3.2% y/y, impacting the yen.

Flash Manufacturing & Services PMIs:

Survey season is here, so it's time for business activity snapshots in major economies! Most releases arrive on Friday (April 21), so don't hit weekend mode too soon! Better PMIs could indicate economic strength and bolster currencies, while weaker PMIs might signal a slowdown and soften them.

↗️ Japan (12:30 am GMT): Manufacturing might improve (49.2 to 49.9).

↗️ Eurozone PMIs: The upbeat trend should continue. Expect a mixed bag for services. France's manufacturing (47.3 to 47.9), while services (53.9 to 53.6). Germany's manufacturing (44.7 to 45.6) and services (53.7 to 53.2). Eurozone manufacturing (47.3 to 47.9) and services (55.0 to 54.6).

↗️ UK (8:30 am GMT): Services PMI might hold steady (52.9), while manufacturi could rise (47.9 to 48.8).

➡️ USA (1:45 pm GMT): After China's reopening boost, manufacturing and services activities might moderate slightly.

Economic Calendar

Building a Rock-Solid Trading Routine

Let's talk about an essential ingredient for success - a solid trading routine.

Developing a daily ritual can boost discipline, ease stress, and sharpen decision-making skills.

In my early trading days, consistency and discipline eluded me. Chasing the market and impulsive trades were my downfall. But once I established a daily routine, my performance skyrocketed!

So, how to create a routine that works for you and adds extra value?

1️⃣ Set a specific time for market analysis and planning trades. Dive into price charts, market news, and strategy evaluations. Consider using a trading journal to track your thoughts and ideas.

2️⃣ During trading hours, follow your plan and resist emotional or impulsive decisions. Breaks are essential – step away from the screen to refresh and refocus.

3️⃣ After trading, assess your trades and tweak your strategies as needed. Learn from both successes and failures, and use them to grow as a trader.

4️⃣ Regularly review your routine and make adjustments to keep it fresh and effective. Seek feedback from fellow traders and be open to learning new techniques.

In a nutshell, a trading routine is your secret weapon in the forex arena. By committing to a consistent daily practice, you'll cultivate discipline, reduce stress, and make smarter decisions. So, design a routine that suits you and stick to it – your trading success depends on it! Remember, constant improvement and adaptation are key to staying ahead in the game!

Sip, Laugh, Trade 😁

📈Latte Line Up 📈

Let's get stuck into the potential money-making opportunity this week.

-EURUSD-

HTF (12-HR): Get ready to surf the EURUSD wave within a rising channel! After creating a higher high around 1.1050, we're swooping back down to the previous resistance and 61.8% Fibonacci sweet spot at 1.0925. Be on the lookout for a surge of buying pressure, marked by rejection or engulfing candles. Once you've caught that wave, it's time to zoom in on the shorter time frame and hunt for those long opportunities.

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GET CHARTING!

LTF(1-HR): Once the 12-hr chart gives us that sweet rejection or engulfing candle signal, we'll switch our detective hats on and examine the 1-hr or 30-min chart. Keep an eye out for a change in the plot – from lower lows and lower highs to higher highs and higher lows. Patience is key! As the market structure shifts, wait for a break and retest on the LTF before going long on a candlestick rejection or engulfing candle.