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Taking a look at the economic calendar, it is set to be a busy week for the forex market. There’s a central bank rate decision, GDP, inflation, and employment reports scheduled for release. A number of big tech companies have earnings reports and with U.S. stocks hitting a new record high on Monday, investors will be watching those results carefully as major disappointments could trigger widespread profit-taking.

Here are the 10 most important things to watch this week:

1. US Federal Reserve monetary policy announcement
2. Big Tech Earnings
3. US Q2 Advance GDP
4. EZ Q2 Advance GDP
5. Canada GDP
6. Eurozone CPI
7. Australian CPI
8. Canadian CPI
9. Germany’s Employment Report
10. US Personal Income & Spending

The Federal Reserve’s monetary policy announcement is the most high-profile event but there’s a very good chance the FOMC statement will remain virtually unchanged. Since the last Fed meeting, high vaccination rates have encouraged more spending and travel. We haven’t seen it in the data yet because the latest retail sales report showed only a 0.6% increase for July but there’s no question that economic activity accelerated over the past month. The problem is that the delta virus variant, expiration of the eviction moratorium this week, and the end to extended unemployment benefits poses a major risk for economic activity in the fall. The Fed admitted that they talked about talking about taper at their last meeting and discussions likely continued in July. However, any major announcements will probably be relegated to the August Jackson Hole symposium, where policymakers will meet in person for the first time since the pandemic with details released at the September FOMC meeting.

All of this means that FOMC may not have a huge impact on the U.S. dollar. If Fed Chairman Powell stays tightlipped about future policy and downplays recent price rises, the recent ranges of USD/JPY and EUR/USD should hold. If he doubles down on taper talk and suggests that details are right around the corner, the dollar will soar. Stronger GDP growth is also widely expected for the second quarter so a good number will not be a big surprise.

The Eurozone also releases Q2 GDP. Although the European Central Bank remained dovish and the German IFO report dropped unexpectedly, the post ECB consolidation combined with today’s rally in EUR/USD tells us the pair is oversold. If the rest of this week’s economic reports surprise to the upside (and we think they will), EUR/USD could squeeze above 1.19. Like the U.S., high vaccination rates led to fewer restrictions in Eurozone in the second quarter. The pickup in travel and spending should provide a big boost for Q2 GDP. Inflation is up and according to the PMIs, hiring expanded at a faster pace last month.

Canada’s inflation report should be more market-moving than GDP which is only a monthly read. Australia also releases CPI which if stronger could help boost the oversold AUD. However, with an ongoing lockdown and dovish central bank, the currency should remain on its backfoot.

With all of this in mind, the most market-moving event(s) on this week’s calendar could be earnings or more precisely risk appetite. If stocks continue to extend their gains, the U.S. dollar and Japanese Yen will weaken. If earnings disappoint triggering a sharp sell-off in stocks, then nothing else matters and all of the major currencies could fall in lockstep.