Articles
EUR/GBP extends decline below 0.8450 as UK economy rebounds faster than expected
401733 July 11, 2024 15:14 FXStreet Market News
-
EUR/GBP
extends
the
downside
near
0.8425
in
Thursday’s
early
European
session. -
The
UK
GDP
grew
0.4%
MoM
in
May
after
stagnating
in
April,
better
than
expected. -
Higher
bets
on
the
ECB
rate
cuts
weigh
on
the
Euro
and
cap
the
cross’s
upside.
The
EUR/GBP
cross
remains
on
the
defensive
around
0.8425
during
the
early
European
session
on
Thursday.
The
cross
trades
with
mild
losses
after
the
monthly
UK
Gross
Domestic
Product
(GDP)
data.
The
UK
economy
grew
more
than
expected
in
May
after
stagnating
in
April,
with
the
GDP
expanding
at
0.4%
MoM.
This
figure
beat
market
expectations
of
0.2%
in
the
reported
period,
according
to
National
Statistics
(ONS)
on
Thursday.
The
Pound
Sterling
(GBP)
attracts
modest
sellers
in
response
to
the
stronger
UK
data.
The
uncertainty
surrounding
the
Bank
of
England’s
(BoE)
decision
to
begin
lowering
its
borrowing
costs
from
the
August
meeting
has
risen.
The
BoE
policymaker
Catherine
Mann
signals
caution
on
rate
cuts,
warning
of
a
resurgence
in
UK
inflation
and
rapid
increases
in
service
prices.
Mann
added
that
uncertainty
about
wage
behaviour
in
the
UK
is
unlikely
to
disappear
soon,
and
policy
decisions
need
to
be
robust
to
this.
Meanwhile,
BoE
policymaker
Jonathan
Haskell
said
that
he
does
not
want
to
cut
interest
rates
as
inflationary
pressures
remain
in
the
job
market
and
it
is
unclear
how
rapidly
they
will
fade.
Investors
are
now
pricing
in
nearly
60%
odds
that
the
BoE
will
cut
interest
rates
on
August
1,
the
first
time
since
2020.
On
the
Euro
front,
the
European
Central
Bank
(ECB)
governing
council
member
Fabio
Panett
said
on
Tuesday
that
the
ECB
can
continue
to
lower
interest
rates,
adding
that
wage
growth,
a
central
driver
of
inflation,
was
“not
warranted.”
Traders
raise
their
bets
on
an
ECB
rate
cut
this
year,
which
might
cap
the
cross’s
upside
in
the
near
term.
GDP
FAQs
A
country’s
Gross
Domestic
Product
(GDP)
measures
the
rate
of
growth
of
its
economy
over
a
given
period
of
time,
usually
a
quarter.
The
most
reliable
figures
are
those
that
compare
GDP
to
the
previous
quarter
e.g
Q2
of
2023
vs
Q1
of
2023,
or
to
the
same
period
in
the
previous
year,
e.g
Q2
of
2023
vs
Q2
of
2022.
Annualized
quarterly
GDP
figures
extrapolate
the
growth
rate
of
the
quarter
as
if
it
were
constant
for
the
rest
of
the
year.
These
can
be
misleading,
however,
if
temporary
shocks
impact
growth
in
one
quarter
but
are
unlikely
to
last
all
year
–
such
as
happened
in
the
first
quarter
of
2020
at
the
outbreak
of
the
covid
pandemic,
when
growth
plummeted.
A
higher
GDP
result
is
generally
positive
for
a
nation’s
currency
as
it
reflects
a
growing
economy,
which
is
more
likely
to
produce
goods
and
services
that
can
be
exported,
as
well
as
attracting
higher
foreign
investment.
By
the
same
token,
when
GDP
falls
it
is
usually
negative
for
the
currency.
When
an
economy
grows
people
tend
to
spend
more,
which
leads
to
inflation.
The
country’s
central
bank
then
has
to
put
up
interest
rates
to
combat
the
inflation
with
the
side
effect
of
attracting
more
capital
inflows
from
global
investors,
thus
helping
the
local
currency
appreciate.
When
an
economy
grows
and
GDP
is
rising,
people
tend
to
spend
more
which
leads
to
inflation.
The
country’s
central
bank
then
has
to
put
up
interest
rates
to
combat
the
inflation.
Higher
interest
rates
are
negative
for
Gold
because
they
increase
the
opportunity-cost
of
holding
Gold
versus
placing
the
money
in
a
cash
deposit
account.
Therefore,
a
higher
GDP
growth
rate
is
usually
a
bearish
factor
for
Gold
price.
Germany Harmonized Index of Consumer Prices (MoM) meets expectations (0.2%) in June
401732 July 11, 2024 15:14 FXStreet Market News
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Thursday 11th July 2024: Asian Markets Surge as Japan’s Nikkei Hits Historic High Amid U.S. Tech Rally
401730 July 11, 2024 14:41 ICMarkets Market News
Global Markets:
- Asian Stock Markets : Nikkei up 1.00%, Shanghai Composite up 0.97%, Hang Seng up 1.78% ASX up 0.93%
- Commodities : Gold at $2384.5 (0.27%), Silver at $31.22 (0.64%), Brent Oil at $85.23 (0.47%), WTI Oil at $82.91 (0.57%)
- Rates : US 10-year yield at 4.284, UK 10-year yield at 4.159, Germany 10-year yield at 2.535
News & Data:
- (USD) Crude Oil Inventories -3.4 M vs 0.7M expected
Markets Update:
Japan’s Nikkei 225 crossed the 42,000 mark for the first time amid a broader rise in Asia-Pacific markets on Thursday, driven by optimism over potential Federal Reserve rate cuts after a rally in U.S. Big Tech. The Nikkei gained 0.97%, led by technology stocks, while the Topix rose 0.7%, both reaching new peaks. Core machinery orders in Japan surged 10.8% year-on-year, surpassing expectations, though they fell 3.2% month-on-month, indicating economic fragility that could complicate the Bank of Japan’s monetary policy plans.
Japanese automaker Toyota saw gains in India as the state of Uttar Pradesh waived levies on hybrid cars, reducing their price by 10%. South Korea’s Kospi rose 0.75% with the Bank of Korea maintaining rates at 3.5% for the 12th consecutive time, while Australia’s S&P/ASX 200 climbed 1.00%. Hong Kong’s Hang Seng index surged 1.71%, and the mainland Chinese CSI 300 index increased by 0.35%.
In the U.S., all three major indexes rose overnight, with the S&P 500 and Nasdaq Composite gaining 1.02% and 1.18%, respectively. The S&P broke the 5,600 mark for the first time, marking its 37th record close in 2024, while the Nasdaq achieved its 27th record close this year. The Dow Jones Industrial Average increased by 1.09%. Chip stocks were among the top performers, with Taiwan Semiconductor Manufacturing Company rising 3.5%, Qualcomm up 0.8%, Broadcom gaining 0.7%, and Nvidia climbing 2.7%.
Expectations of rate cuts fueled these gains, with predictions that the June inflation rate would be 3.1% year over year, lower than May’s 3.3%. The core inflation rate, excluding food and energy prices, is anticipated to rise by 3.4% since June last year, compared to a 3.3% increase in May.
Upcoming Events:
- 12:30 PM GMT – USD Core CPI m/m
- 12:30 PM GMT – USD CPI m/m
- 12:30 PM GMT – USD CPI y/y
- 12:30 PM GMT – USD Unemployment Claims
The post Thursday 11th July 2024: Asian Markets Surge as Japan’s Nikkei Hits Historic High Amid U.S. Tech Rally first appeared on IC Markets | Official Blog.
Germany Consumer Price Index (MoM) meets expectations (0.1%) in June
401729 July 11, 2024 14:40 FXStreet Market News
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Investing
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great
deal
of
risk,
including
the
loss
of
all
or
a
portion
of
your
investment,
as
well
as
emotional
distress.
All
risks,
losses
and
costs
associated
with
investing,
including
total
loss
of
principal,
are
your
responsibility.
The
views
and
opinions
expressed
in
this
article
are
those
of
the
authors
and
do
not
necessarily
reflect
the
official
policy
or
position
of
FXStreet
nor
its
advertisers.
The
author
will
not
be
held
responsible
for
information
that
is
found
at
the
end
of
links
posted
on
this
page.
If
not
otherwise
explicitly
mentioned
in
the
body
of
the
article,
at
the
time
of
writing,
the
author
has
no
position
in
any
stock
mentioned
in
this
article
and
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business
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with
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company
mentioned.
The
author
has
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received
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this
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other
than
from
FXStreet.
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author
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author
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United Kingdom Trade Balance; non-EU climbed from previous £-7.29B to £-6.856B in May
401728 July 11, 2024 14:39 FXStreet Market News
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It
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Investing
in
Open
Markets
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a
great
deal
of
risk,
including
the
loss
of
all
or
a
portion
of
your
investment,
as
well
as
emotional
distress.
All
risks,
losses
and
costs
associated
with
investing,
including
total
loss
of
principal,
are
your
responsibility.
The
views
and
opinions
expressed
in
this
article
are
those
of
the
authors
and
do
not
necessarily
reflect
the
official
policy
or
position
of
FXStreet
nor
its
advertisers.
The
author
will
not
be
held
responsible
for
information
that
is
found
at
the
end
of
links
posted
on
this
page.
If
not
otherwise
explicitly
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in
the
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the
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at
the
time
of
writing,
the
author
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no
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The
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IC Markets Europe Fundamental Forecast | 11 July 2024
401726 July 11, 2024 14:18 ICMarkets Market News
IC Markets Europe Fundamental Forecast | 11 July 2024
What happened in the Asia session?
It was a quiet session as the dollar index (DXY) drifted lower towards 104.90 while gold climbed above $2,380/oz. Meanwhile, crude oil prices remain elevated with WTI oil briefly rising above $83 per barrel – this commodity looks set to continue its ascend as the day progresses.
What does it mean for the Europe & US sessions?
The final CPI reading for Germany will be released today and it is expected to show inflationary pressures dissipating further. Headline CPI is anticipated to rise just 0.1% MoM for the second month in a row – a result that could weaken the Euro before the start of the European trading hours.
GDP output in the U.K. was relatively strong in the first quarter of 2024 with the monthly growth rate averaging an output of 0.3%. After stagnating in April, May’s estimate of 0.2% points to minor rebound in economic activity. Should the latest result surprise to the upside, it could function as a bullish catalyst for the Pound.
The Dollar Index (DXY)
Key news events today
CPI (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from DXY today?
After easing in May, inflation is once again anticipated to moderate lower for the month of June. Headline CPI is forecasted to drop from 3.3% in May down to 3.1% YoY – should overall inflation cool for the second consecutive month, the dollar is bound to face strong overhead pressures.
Meanwhile, unemployment claims have risen in recent weeks to signal potential ‘cracks’ in the labour market with the 4-week average now moving up to 238K. This week’s estimate stands at 236K and should claims surprise to the upside for the seventh time in eight weeks, it could function as a massive bearish catalyst for the dollar.
Central Bank Notes:
- The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
- The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
- The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
- Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
- In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
- In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
- In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
- The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
- Next meeting runs from 30 to 31 July 2024.
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
CPI (12:30 pm GMT)
Unemployment Claims (12:30 pm GMT)
What can we expect from Gold today?
After easing in May, inflation is once again anticipated to moderate lower for the month of June. Headline CPI is forecasted to drop from 3.3% in May down to 3.1% YoY – should overall inflation cool for the second consecutive month, gold should receive a strong boost.
Meanwhile, unemployment claims have risen in recent weeks to signal potential ‘cracks’ in the labour market with the 4-week average now moving up to 238K. This week’s estimate stands at 236K and should claims surprise to the upside for the seventh time in eight weeks, it could function as a massive bullish catalyst for this precious metal.
Next 24 Hours Bias
Weak Bullish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
The Aussie rose above its near-term resistance of 0.6750 this morning and was rising towards 0.6770 as Asian markets came online – these are the support and resistance levels for today.
Support: 0.6750
Resistance: 0.6825
Central Bank Notes:
- The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
- Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
- The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
- Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
- The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
- Next meeting is on 6 August 2024.
Next 24 Hours Bias
Medium Bullish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
Following the RBNZ’s decision to hold the official cash rate steady at 5.5% for the eighth consecutive board meeting yesterday, the Kiwi tumbled almost 0.7% to fall as low as 0.6065 at its lowest point. This currency pair was trading around 0.6095 at the beginning of the Asia session – these are the support and resistance levels for today.
Support: 0.6070
Resistance: 0.6115
Central Bank Notes:
- The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
- The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
- The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
- Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
- Next meeting is on 14 August 2024.
Next 24 Hours Bias
Weak Bearish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
Despite comments by Federal Reserve Chairman Jerome Powell on the slowdown in the U.S. labour markets based on recent data, USD/JPY remains elevated due to the significant weakness in the yen. This currency pair was rising towards 161.80 as Asian markets came online – these are the support and resistance levels for today.
Support: 161.40
Resistance: 162.00
Central Bank Notes:
- The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
- The Bank of Japan decided on the following measures:
- The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
- The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
- Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
- In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
- The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
- Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
- Next meeting is on 31 July 2024.
Next 24 Hours Bias
Weak Bullish
The Euro (EUR)
Key news events today
Germany CPI (6:00 am GMT)
What can we expect from EUR today?
The final CPI reading for Germany will be released today and it is expected to show inflationary pressures dissipating further. Headline CPI is anticipated to rise just 0.1% MoM for the second month in a row – a result that could weaken the Euro before the start of the European trading hours.
Central Bank Notes:
- The Governing Council today decided to lower the three key ECB interest rates by 25 basis points after nine months of holding rates steady.
- Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 4.25%, 4.50% and 3.75% respectively, with effect from 12 June 2024.
- Since September 2023, inflation has fallen by more than 2.5% and the inflation outlook has improved markedly while underlying inflation has also eased, reinforcing the signs that price pressures have weakened, and inflation expectations have declined at all horizons.
- At the same time, despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year – the latest Eurosystem staff projections for both headline and core inflation have been revised up for 2024 and 2025 compared with the March projections.
- Projections now show headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026 while economic growth is expected to pick up to 0.9% in 2024, 1.4% in 2025 and 1.6% in 2026.
- The Council also confirmed that it will reduce the Eurosystem’s holdings of securities under the pandemic emergency purchase programme (PEPP) by €7.5 billion per month on average over the second half of the year.
- The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
- Next meeting is on 18 July 2024.
Next 24 Hours Bias
Medium Bullish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The overnight comments by Federal Reserve Chairman Jerome Powell have caused USD/CHF to retreat from its recent high of 0.9000. This currency pair was trading around 0.8985 at the beginning of the Asia session – these are the support and resistance levels for today.
Support: 0.8950
Resistance: 0.9000
Central Bank Notes:
- The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
- The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
- The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
- Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
- Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
- Next meeting is on 26 September 2024.
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
GDP (6:00 am GMT)
What can we expect from GBP today?
GDP output in the U.K. was relatively strong in the first quarter of 2024 with the monthly growth rate averaging an output of 0.3%. After stagnating in April, May’s estimate of 0.2% points to minor rebound in economic activity. Should the latest result surprise to the upside, it could function as a bullish catalyst for the Pound.
Central Bank Notes:
- The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
- Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
- Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
- Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
- UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
- UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
- The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
- Next meeting is on 1 August 2024.
Next 24 Hours Bias
Weak Bullish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
Weak demand for the greenback has pushed USD/CAD lower in recent weeks. This currency pair was trading around 1.3615 at the beginning of the Asia session – these are the support and resistance levels for today.
Support: 1.3590
Resistance: 1.3645
Central Bank Notes:
- The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75% while continuing its policy of balance sheet normalization.
- Canada’s economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR but consumption growth was solid at about 3%, and business investment and housing activity also increased.
- Inflation remains above the 2% target and shelter price inflation is high but total CPI inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing.
- CPI inflation has eased from 3.4% in December to 2.7% in April while the preferred measures of core inflation have come down from about 3.5% last December to about 2.75% in April and the 3-month rate of core inflation slowed from about 3.5% in December to under 2% in March and April.
- In the labour market, businesses are continuing to hire workers as employment has been growing, but at a slower pace than the working-age population while elevated wage pressures look to be moderating gradually.
- The Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
- Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
- Next meeting is on 24 July 2024.
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Crude oil – which saw a decline of over 2% in the beginning of the week – reversed sharply overnight as a higher-than-anticipated drawdown in the EIA inventories functioned as a strong bullish catalyst. Inventories were forecasted to increase by 0.7M barrels of crude but dropped by 3.4M barrels instead. WTI oil rebounded off the $81-level to bounce strongly and rise above $82.80 per barrel – prices have breached $83 and the bullish momentum looks set to extend further as the day progresses.
Next 24 Hours Bias
Medium Bullish
The post IC Markets Europe Fundamental Forecast | 11 July 2024 first appeared on IC Markets | Official Blog.
Trade Cable on the US CPI Data
401724 July 11, 2024 14:17 ICMarkets Market News
Currency traders are preparing for big moves later in the trading day as the US CPI data is due to set the tone for the dollars progress in the weeks ahead. Most of the major currencies are poised at good technical levels and given the lack of clear guidance from the Fed Chair this week in his testimonies to Congress, many consider that this data’s impact will be more significant in terms of shaping when the decision is made to cut rates.
Cable has seen a good move overnight and hit a one month high after the Bank of England’s Chief Economist advised that price pressures remained persistent, which pulled back on many investors hopes for an early rate cut from the MPC. If this more hawkish outlook from the Bank coincides with a weaker print for the US CPI, then we can expect Cable to break higher in fresh ranges. We also have UK GDP numbers early in the London time zone which could see some initial volatility, but traders are expecting the CPI data to dominate the moves in the pair today.
The monthly US CPI numbers are expected to show a 0.1% month-on-month increase for the headline figure with the Core data coming in +0.2%, whilst the year-on-year data is expected to show a 0.2% decrease coming in at 3.1%, reinforcing that slowing data that is pushing for swifter rate cuts and putting pressure on the dollar. Most traders expect the bigger risk to sit with a surprise higher print which could turn recent trends on their head and give more ‘bang for your buck’, which would push cable back into recent ranges.
On the longer-term Daily chart, Cable is sitting just under the resistance trendline and 2024 high and a break here could take it up to challenge the 2023 high at 1.3150 whilst bears will use the level as a s/l for short positions if the CPI prints higher.
Resistance 2: 1.3150 – 2023 High
Resistance 1: 1.2920 – Trendline Resistance and 2024 High
Support 1: 1.2575 – Trendline Support
Support 2: 1.2296 – April Low
The post Trade Cable on the US CPI Data first appeared on IC Markets | Official Blog.
Germany Harmonized Index of Consumer Prices (YoY) in line with forecasts (2.5%) in June
401723 July 11, 2024 14:16 FXStreet Market News
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United Kingdom Index of Services (3M/3M) came in at 1.1%, above forecasts (1%) in May
401722 July 11, 2024 14:14 FXStreet Market News
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