Trading Week Ahead: Will This Be the Fed’s Turning Point?

The week ahead promises heightened volatility for US markets as three major macroeconomic releases take centre stage: Consumer Price Index (CPI), Producer Price Index (PPI), and Retail Sales. Each will offer a fresh gauge of the economy’s health and could significantly reshape expectations for Federal Reserve policy in the second half of the year.
Which of these events will deliver the biggest shock to the markets?

• US CPI
Inflation remains the single most influential driver of Federal Reserve policy, and this week’s CPI release will be in sharp focus. Markets are looking for a cooling in monthly price growth from 0.3% to 0.2%, a shift that could tilt sentiment towards earlier rate cuts and soften the US dollar. However, a hotter reading would reinforce the Fed’s hawkish resolve, lifting Treasury yields and putting equities under pressure.

• US PPI
Producer prices are set to break out of last month’s stagnation, with forecasts pointing to an increase from 0.0% to 0.2%. This rebound would signal renewed cost pressures at the production level, potentially feeding through to consumer prices in the months ahead. A stronger print would strengthen the dollar’s footing, while a softer number could encourage a more dovish market outlook.

• US Retail Sales
Consumer spending, the heartbeat of the US economy, is expected to lose a touch of momentum, easing from 0.6% growth last month to 0.5%. If retail sellers prove more resilient than expected, the data could embolden the Fed to keep rates elevated for longer. Conversely, weaker figures would hint at slowing demand, reviving expectations for policy easing later this year.

Date	Time	Instrument	Event
Tuesday, Aug. 12	6:30 AM	AUD	Cash Rate
	8:00 AM	GBP	Average Earnings Index
	11:00 AM	EUR	ZEW Economic Sentiment
	2:30 PM	USD	CPI
Wednesday, Aug. 13	8:00 AM	EUR	German CPI
Thursday, Aug. 14	8:00 AM	GBP	GDP
	11:00 AM	EUR	GDP
	2:30 PM	USD	PPI
	2:30 PM	USD	Unemployment Claims
Friday, Aug. 15	2:30 PM	USD	Retail Sales
Friday, Aug. 15	4:00 PM	USD	Prelim UoM Consumer, Inflation Expectations

*All times in the table are in GMT+2

Technical Analysis with FVG Strategy

This strategy combines the use of the 20- and 50-period EMA to assess market direction alongside the Fair Value Gap (FVG) to pinpoint zones of price inefficiency. These gaps, which emerge during sharp market moves, often highlight strong potential areas for trade entries and exits. The method is suitable for instruments like EURUSD, GBPJPY, US30, and XAUUSD, offering insights into recent market behaviour and identifying possible trading setups.

Opportunities to Watch This Week

GBPJPY

Market Context: After a sharp sell-off, GBPJPY reversed into a bullish structure. Price trades above the 20 and 50 EMAs and shows strong upward momentum. Liquidity above recent swing highs acts as a magnet for buyers.

Bullish Scenario (Preferred): Price aims for the swing highs where liquidity concentrates. A nearby resistance could slow the advance but will likely not trigger a major reversal.

Bearish Scenario (Alternative): A pullback into the marked support zone could activate buyers' interest again, giving bulls an entry at lower prices.

Setup: A fresh FVG formed this week and offers a 2:1 RRR trade toward swing highs.

EURUSD

Market Context: Last week’s bullish momentum continued, pushing the pair toward a key FVG resistance. Price approaches this zone with potential for another test before any pullback.

Bullish Scenario (Preferred): A retest of the identified FVG could lead to a move toward the upper boundary of the opposing FVG, the strongest resistance currently on the chart.

Bearish Scenario (Alternative): A drop into support could allow liquidity to fill the lower FVG and set the stage for another rally.

Setup: This week’s FVG supports a 2:1 RRR long trade toward the marked target.

Weekly Market Outlook

XAUUSD

Market Context: Gold broke above the 20 and 50 EMAs and cleared resistance, confirming a bullish structure. Last week’s unfilled FVG within three candles is now invalid, yet it still acts as strong resistance.

Bullish Scenario (Preferred): A retest of the FVG could send the price toward swing highs as buyers remain in control.

Bearish Scenario (Alternative): A close below the FVG would signal a shift in structure and open room for downside movement.

Setup: No valid FVG was formed this week. The bias stays bullish while the price holds above EMA support.

US30

Market Context: The index remains in consolidation around the 20 EMA. Price holds at the edge of a gap (FVG), which keeps the tone neutral to bearish.

Bearish Scenario (Preferred): A move lower from the current range could target the next liquidity zone beneath the gap.

Bullish Scenario (Alternative): A close above the FVG could open a move toward overhead resistance.

Setup: No valid FVG was formed this week. Traders should watch for a breakout from the current accumulation zone.

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