By ForexTime
The explosive price action seen this week continues to highlight how global financial markets remain sensitive to key inflation data!
Currencies, commodities, and stocks were injected with fresh volatility mid-week after the softer-than-expected US inflation figures calmed fears around Fed rate hikes.
Markets may be pumped with more volatility this afternoon due to earnings announcement by Wall Street banks.
And even before things settle down across the board, investors are already bracing for fresh action in the week ahead thanks to top-tier economic reports and key risk events…
Monday, July 17
Tuesday, July 18
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Wednesday, July 19
Thursday, July 20
Friday, July 21
After rallying to a fresh 2023 high at 1.3140 and rising more than 2% this week (as of writing), sterling bulls are certainly in the driving seat. Indeed, the GBPUSD has drawn strength from upbeat UK GDP data and a broadly weaker dollar.
The key question is whether bulls can maintain the appetite for further gains in the week ahead.
On Wednesday, July 19th – the latest UK inflation report will be published.
All eyes will be on the incoming UK inflation report which could influence BoE hike expectations. This will be topped off with the latest retail sales figures and Gfk Consumer confidence report on Friday which could provide fresh insight into the health of the UK economy.
Markets are forecasting:
As of writing, traders are pricing in a 73% probability of a 50-basis point BoE hike in August as the central bank continues to battle sticky inflation.
Fed hike expectations are likely to influence the US dollar in the week ahead. On top of this, investors will be dished out key US data which may provide fresh insight into the health of the largest economy in the world.
The US empire manufacturing will be under the spotlight on Monday, to key US retail sales and industrial production figures on Tuesday. Much attention will also be directed towards the US initial jobless claims and University of Michigan Consumer Sentiment Index on Thursday.
The GBPUSD remains heavily bullish on the daily and weekly timeframe.
There have been consistently higher highs and higher lows in the weekly timeframe with prices slicing through the 200-week Simple Moving Average. Given how the currency pair remains in a healthy weekly bullish channel, the path of least resistance points north. A strong weekly close above 1.3200 may encourage an incline towards the next major resistance at 1.3700. While bulls are clearly in a position of power, the Relative Strength Index (RSI) has reached overbought levels. A technical throwback could be on the table before bull’s attack once again.
Zooming into the daily charts, the GBPUSD remains in a strong uptrend. After hitting a fresh 2023 high at 1.3140, the question is whether bulls have the appetite for more gains? A strong breakout above this point could encourage an incline towards 1.3200 and 1.3250. However, should prices slip back below 1.3000, this may trigger a further decline towards 1.2840.
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