The FOMC meeting minutes are among the most important events to take place this week. The markets are still waiting for any signal from the Fed about future policy easing and the beginning of a series of rate cuts. According to the Fed Head’s Jerome Powell comments, the first rate cut may occur six months after inflation becomes stable at “good” levels. This is supposed to be the main agenda of the last meeting in the last days of January. Everything that goes beyond current expectations may lead to higher volatility. 

Other Key Events of the Week

Along with the FOMC meeting that will take place on Wednesday, February 21, we also suggest traders to pay attention to the following events:

• RBA Meeting Minutes;
• Canadian CPI Indexes;
• Australian Wage Price Index y/y;
• German Flash Manufacturing and Services PMIs.

RBA Meeting Minutes

The Reserve Bank of Australia meeting minutes will also be in focus of traders this week. The central bank officials are unlikely to hike rates again as they are too high at their present levels. However, according to the RBA officials, the inflation rate is still above expectations and another interest rate hike can’t be ruled out. 

Australian Wage Price Index y/y

The next one is connected directly to the RBA meeting minutes as the central bank’s officials will pay a lot of attention to the Australian wage price index that will be released on Wednesday, February 21. According to the latest forecast, the yearly labor cost index in Australia is likely to slow down and reach 0.9% against 1.3% previously, which is one of the indicators demonstrating that inflation is slowing down in the country.

Canadian CPI m/m

Canadian monthly inflation is likely to accelerate again according to various forecasts. Experts expect CPI to hit 0.4% against -0.3% during the previous period. This may have a direct impact on the next BOC decision that will be taken on March 6 by the officials of the Bank of Canada. The current interest rate in Canada is 5.00%

German PMIs

Last but not least, it is worth paying attention to German PMI indexes, which will be released on Thursday, February 22. Manufacturing PMI is likely to grow from 45.5 to 46.1, while services index may show a more moderate growth from 47.7 to 48.0. Both indicators are below 50, which means that the business activity is still in the negative zone. 

AUD/USD Technical Analysis

AUD/USD is traded along the ascending trendline on the hourly chart, which means that the upward movement is likely to continue. However, the price is testing the ascending trendline together with a relatively strong support level at 0.6534. Traders can buy Higher contracts or buy the currency pair if the price manages to stay above 0.6534 and moves on along the ascending trendline. Traders should keep an eye on candlestick reversal signals. The next target for buyers will be 0.6571. 

In the opposite scenario, if the price makes a breakout and pierces both the ascending trendline and the support level at 0.6534, traders can sell it or buy Lower contracts. The next target for a downside price movement will be the support at 0.6512. 

EUR/USD Technical Analysis

EUR/USD moves along the ascending trend line on the hourly chart as well. Currently, the currency pair tests it with a reversal doji signal. If EUR/USD stays above the trendline, it will test 1.0788, which is an opportunity for digital options traders to buy a Higher contract before the price reaches this resistance. Further, if EUR/USD breaks this level, the next target for buyers will be 1.0821.

However, if the trendline fails to hold the price from downside movement, then the bears will come into play and try to push it lower to 1.0758, which, in turn, will provide traders with an opportunity to buy a Lower contract or simply sell it.