InvestMacro

The Analytical Overview of the Main Currency Pairs on 2022.08.02

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0212
Prev Close: 1.0260
% chg. over the last day: +0.47%

European manufacturing PMI dipped below the level of 50 in July. This usually means that a country is approaching a recession. It is a preliminary and rough indicator, but the statistics show that a drop of 50 triggers recessive processes in the country. The Central Bank has begun to work toward easing monetary policy. In Spain, the Index fell from 52.6 to 48.7, Italy from 50.9 to 48.5, France from 49.6 to 49.5, Germany from 52 to 49.3, and the overall Eurozone PMI fell from 52.1 to 49.8. With the ECB just starting to tighten monetary policy and raise interest rates, Europe will slowly deepen into recession. Winter will not be easy for Europe.

Trading recommendations

Support levels: 1.0112, 1.0035, 1.0000
Resistance levels: 1.0284, 1.0365, 1.0415, 1.050

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is still forming a wide volatile balance, and buyer pressure prevails now. The MACD indicator is in the positive zone. Under such market conditions, buy trades are best sought on intraday time frames from the support level of 1.0112. Sell trades can be considered from the resistance level of 1.0284, but only after additional confirmation and only with short targets.

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

News feed for 2022.08.02:

– US JOLTs Job Openings (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2164
Prev Close: 1.2254
% chg. over the last day: +0.74%

The UK manufacturing PMI declined from 52.8 to 52.1, which is better than the rest of Europe. Output fell for the first time in more than two years as new orders and export shipments continued to fall. The PMI held above the 50 mark thanks to faster job growth, increased inventories of purchases, and longer lead times for suppliers. Manufacturing output declined for the first time since May 2020, largely reflecting the downturn in the consumer and intermediate goods sub-sectors.

Trading recommendations

Support levels: 1.2203, 1.2150, 1.2114, 1.2063, 1.1907, 1.1803
Resistance levels: 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. The price reached the daily resistance level. The MACD indicator is in the positive zone but shows signs of divergence already in several time frames. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level 1.2203, but only with confirmation. Sell trades can be considered from the resistance level of 1.2294, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2006 support level and fixes below, the downtrend will likely resume.

There is no news feed for today.

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 133.25
Prev Close: 131.60
% chg. over the last day: -1.25%

The Japanese yen is strengthening amid a decline in US yields. The dollar also declined, falling to its lowest level in two months. Nervousness over an upcoming visit to Taiwan by US House Speaker Nancy Pelosi also led to an influx of capital into the yen and put pressure on other Asian currencies. However, it should not be noted that the difference between the US and Japanese interest rates is not in favor of the Japanese yen, so at any time, upward movement on the currency pair USD/JPY may resume.

Trading recommendations

Support levels: 130.85
Resistance levels: 131.37, 133.17, 134.00, 135.10, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. In the last trading sessions, the Japanese yen is getting stronger. The MACD indicator is in the negative zone, and the sellers’ pressure is still there, but there are signs of divergence. Under such market conditions, buy trades can be sought from the support level of 130.85, but with additional confirmation. Resistance levels of 131.37 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 136.03, the uptrend will likely resume.

There is no news feed for today.

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2808
Prev Close: 1.2837
% chg. over the last day: +0.22%

Oil decreased by almost 5% due to negative Chinese data. China is the world’s largest importer of crude oil, while the Canadian dollar is a commodity currency and depends on oil prices. Falling oil prices are weakening the Canadian dollar. It also should be noted that the Central Banks of the US and Canada keep their interest rates at the same level (2.5%), so there is no significant imbalance in this currency pair to form a long-term trend. At the same time, employment growth in Canada could affect the USD/CAD exchange rate as the Bank of Canada (BoC) wants to accelerate the path to higher interest rates. An improvement in the labor market could lead to a more aggressive rate hike.

Trading recommendations

Support levels: 1.2786
Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. At the moment, the price is forming a wide balance. The MACD indicator is in the negative zone, but there is a divergence, which indicates that it is harder for the price to move lower. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2786 or from the lower border of the channel, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.3006 resistance level, the uptrend will likely resume.

There is no news feed for today.

By JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial News Forex and Currency News

02 Aug

Australia’s Central Bank has raised its interest rate. Business activity in Europe is falling

By JustForex

According to the latest ISM report, economic activity in the US manufacturing sector rose in July, with the economy posting its 26th consecutive month of growth. But it should be noted that there is a downward trend in growth, and the PMI indicator is approaching the level of 50. Going below 50 is usually a harbinger of recession.

At the close of trading yesterday, the Dow Jones (US30) decreased by 0.14%, and the S&P 500 (US500) lost 1.28%. The NASDAQ Technology Index (US100) was down by 1.13% on Monday.

Twitter (TWTR) lost about 2%, even as Greenlight Capital announced a new stake in the social media giant, betting that the latter will emerge victorious in a legal battle with Elon Musk to force the billionaire to fulfill his $44 billion deal. Boeing (BA) shares jumped by 6% after reports that the Federal Aviation Administration cleared the maker to resume delivery of the 787 Dreamliner.

Companies reporting today include AMD (AMD), Caterpillar (CAT), PayPal Holdings Inc (PYPL), Starbucks (SBUX), Gilead (GILD), Airbnb (ABNB), Marriott Int (MAR), Uber Tech (UBER), Ferrari NV (RACE), Electronic Arts (EA), and others.

On the political front, US House Speaker Nancy Pelosi is expected to visit Taiwan as part of her tour of Asia, despite hostile threats from China. This adds significantly to the nervousness in the financial markets.

Stock markets in Europe were mostly down on Monday. German DAX (DE30) decreased by 0.03%, French CAC 40 (FR40) lost 0.18%, Spanish IBEX 35 (ES35) was 0.87% lower, British FTSE 100 (UK100) was 0.13% lower.

Oil is down nearly 5% due to negative Chinese data. Chinese factory activity declined in July amid new blockages related to COVID. China is the world’s largest importer of crude oil. OPEC+, Organization of Petroleum Exporting Countries, will meet Wednesday to decide on September production quotas for the group’s members. Analysts believe that OPEC+, which includes 23 countries, will likely leave production unchanged and only raise it slightly in September. Most importantly, OPEC+ should not cut production at this point.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) gained 0.69%, Hong Kong’s Hang Seng (HK50) ended down by 0.05%, while Australia’s S&P/ASX 200 (AU200) was up by 0.69%.

Australia’s Central Bank raised its interest rate by 50 basis points to 1.85% and noted further tightening. The Bank said in a statement that it attaches great importance to getting inflation back into the 2-3 percent range over time while keeping the economy stable. The outlook for global economic growth has been worsened by pressure on real income due to higher inflation, tighter monetary policy in most countries, Russia’s invasion of Ukraine, and COVID containment measures in China.

Japan’s planned record minimum wage hike paves the way for sustained GDP growth. Japan’s average minimum wage is rising at a record pace this year. The government said Tuesday, a positive development for Prime Minister Fumio Kishida’s efforts to protect households from global inflation. Kishida expects the increase to contribute to his flagship policy of distributing wealth to the broader population to put Japan’s economy on a sustainable recovery path.

S&P 500 (F) (US500) 4,118.63 −11.66 (−0.28%)

Dow Jones (US30) 32,798.40 −46.73 (−0.14%)

DAX (DE40) 13,479.63 −4.42 (−0.033%)

FTSE 100 (UK100) 7,413.42 −10.01 (−0.13%)

USD Index 105.41 −0.49 (−0.47%)

Important events for today:

– Australia RBA Interest Rate Decision (m/m) at 07:30 (GMT+3);
– Australia RBA Rate Statement (m/m) at 07:30 (GMT+3);
– Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3).

By JustForex

Economics & Fundamentals Financial News

02 Aug

Bond yields move lower, stocks too

By ForexTime

Asian stocks have kicked off August on the back foot as US-China tensions stir safe-haven demand. This follows on from US equities, that snapped a three-day win streak after capping their best month since 2020 last week. Trading volumes are typically thinner during summer as European traders especially are running flat trading books during the holiday season. This means volumes will be a fraction of the size of normal trading activity which can exacerbate price action and swings. These were certainly seen intraday yesterday as the broad S&P500 index moved between gains and losses.

Yesterday’s falls across the pond followed on from a gain of more than 9% for the blue-chip S&P500 in July and a 12.3% increase in the tech-heavy Nasdaq that marked the tech benchmark’s strongest month since April 2020. Easing expectations for interest rate rises and positive earnings updates from several big tech and energy companies were the two key drivers of this summer rally. The question on many investors’ lips has been if the low is now in place, or if this is a bear market rally in a broader downtrend?

On the technical side, the S&P500 has hit the 100-day simple moving average at 4121 in a resistance zone with the February low at 4114. The halfway point of the March to June move is also near at 4137.

Data Dependent traders

Market participants are now watching data more closely too, after Fed Chair Powell, and President Lagarde, and the ECB, bailed out of offering forward guidance to investors and markets. Probably this is an honest admission that policymakers don’t know what the economy is going to do next. Instead, they are now data dependent and yesterday’s main economic indicator painted a cloudy picture at best.

The US ISM slipped to 52.9 in July, its lowest level since June 2020. Any figure above 50 indicates an expansion, but the latest result points to a slowdown in growth. But the ISM’s index did provide an encouraging gauge that cost pressures may be easing on companies. The sub-index fell to a near two-year low, well below the estimates of economists.

Falling bond yields take down USD/JPY

The high in USD/JPY seems a distant memory today from when it was posted in mid-July above 139. The major is correlated with US 10-year rate differentials, mainly due to the Bank of Japan’s commitment to yield curve control. This effectively means where the US 10-year Treasury yield goes, so to does USD/JPY. And those yields have fallen sharply as markets have scaled back their expectations of how much the Fed will tighten policy to curb red-hot inflation. From a high close to 3.5%, the US 10-year yield is now nearing 2.5% after dropping below the lower bound of the recent sideways trading range around 2.7%. This is a mighty fall in bond markets and has weighed heavily on USD/JPY.

The major is back below 135 and smashed down through the next major support at 131.34 overnight. The latest US wage and inflation data may slow the descent of US yields. But the yen may retain a small bid on growing odds of a US recession as the Fed hiking cycle continues. This week’s bid for safe haven assets as US House Speaker Pelosi gears up to visit Taiwan is also helping the yen. The 100-day simple moving average could offer support at 130.12 as prices go into overbought territory.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Bonds Economics & Fundamentals Financial News

01 Aug

Crude Oil Prices Continue to Be Under Pressure

By RoboForex Analytical Department

The commodity sector remains rather tense on Monday; Brent is trading at $102.75.

Global geopolitics is what investors are focused on right now. Any complications in this area muddy the water one way or another, and it’s bad news. Last weekend, the Kosovo situation escalated – a gas pipeline “Balkan Stream” is going through Serbia, which doesn’t recognise the independence of Kosovo. The pipeline delivers natural gas from “TurkStream” to Hungary.

Later this week, OPEC and OPECF+ will have meetings. The OPEC+ agreement is ending in August and the organisations are set to discuss options to increase oil production. First of all, it depends on Saudi Arabia, a country that still has the potential for oil extraction expansion. However, Saudis don’t seem to be interested in it.

The latest report from Baker Hughes showed that over the past week, the Oil Rig Count in the US gained 6 units, up to 605. In Canada, the indicator increased by 13 units, up to 137.

On the H4 chart, Brent is forming the third ascending wave with the target at 111.55 and may later correct down to 106.16. After that, the instrument may resume trading upwards with the short-term target at 118.80. From the technical point of view, this scenario is confirmed by the MACD Oscillator: its signal line is moving above 0 inside the histogram area. Both the line and the price chart may yet continue to move upwards.

As we can see in the H1 chart, after finishing the descending correctional structure at 106.16, Brent is consolidating above this level. Possibly, the asset may break the range to the upside and start another growth with the target at 111.55, or even extends this structure up to 118.70. From the technical point of view, this idea is confirmed by the Stochastic Oscillator: after breaking 20, its signal line is heading towards 50. Later, the line may break the latter level and continue growing to reach 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

Energy Financial News

01 Aug

Ichimoku Cloud Analysis 01.08.2022 (EURUSD, XAUUSD, AUDUSD)

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD continues testing the bearish channel’s upside border. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may re-test the cloud’s upside border at 1.0175 and then resume moving upwards to reach 1.0405. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1.0085. In this case, the pair may continue falling towards 0.9990. To confirm a further uptrend, the price must break the bearish channel’s upside border and fix above 1.0275.

XAUUSD, “Gold vs US Dollar”

XAUUSD is rebounding from Tenkan-Sen and Kijun-Sen. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Kijun-Sen at 1740.00 and then resume moving upwards to reach 1820.00. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1700.00. In this case, the pair may continue falling towards 1655.00.

AUDUSD, “Australian Dollar vs US Dollar”

AUDUSD is growing inside the bullish channel. The instrument is currently moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen at 0.6960 and then resume moving upwards to reach 0.7150. Another signal in favour of a further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 0.6805. In this case, the pair may continue falling towards 0.6710.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Financial News Forex and Currency News

01 Aug

Forex Technical Analysis & Forecast for August 2022

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

As we can see in the daily chart, after reaching the short-term downside target at 0.9964, EURUSD has completed the ascending impulse along with the correction; right now, it is forming one more ascending structure towards 1.0360 and may later consolidate there. If the price breaks the range to the upside, the market may start another growth with the short-term target at 1.0616 or even extend this correctional wave up to 1.0764. After that, the instrument may resume trading within the downtrend to reach 0.9300.

GBPUSD, “Great Britain Pound vs US Dollar”

On the daily chart, GBPUSD has finished the ascending impulse at 1.2222. Possibly, the pair may correct down to 1.2000 and then resume growing with the short-term target at 1.2444. The entire ascending structure is considered a correction of the previous decline towards 1.2665. After the correction is over, the instrument may start a new decline with the target at 1.1690, or even extend this wave down to 1.1500.

USDJPY, “US Dollar vs Japanese Yen”

On the daily chart, having completed the descending wave at 132.22, USDJPY is expected to grow and test 135.08 from below. Later, the market may resume falling with the first target at 130.37 and then start another correction up to 135.10.

BRENT

As we can see in the daily chart, after finishing the first ascending impulse at 108.00 along with the correction down to 100.00, Brent is expected to form the third ascending wave towards 118.18. Later, the market may correct to test 108.00 from above and then continue growing with the first target at 122.00.

XAUUSD, “Gold vs US Dollar”

On the daily chart, having completed the first ascending impulse along with the correction, Gold is forming one more ascending wave with the first target at 1799.33. After that, the instrument may correct down to 1740.00, and then resume growing to reach 1855.00, or even extend this structure up to 1888.30.

S&P 500

On the daily chart, the S&P index is still correcting up 4163.6 and may later start a new decline towards 3900.0. After that, the instrument may complete this ascending wave by reaching 4208.0, and then resume trading downwards with the target at 3500.0.

Article By RoboForex.com

Financial News Forex and Currency News

01 Aug

The Analytical Overview of the Main Currency Pairs on 2022.08.01

By JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.0197
Prev Close: 1.0225
% chg. over the last day: +0.27%

Inflation in the Eurozone broke another record and rose to 8.9% in July (8.6% in June). The energy price boom continues, and the geopolitical factors behind it show no signs of abating. The Overall Energy Index increased to 39.7% y/y as gas prices continue to rise and their carryover to consumer prices increases. Along with energy, food has become a very large contributor to inflation as food prices have already increased to 9.8% y/y. Eurozone GDP showed growth of +0.7%, which came as a surprise to analysts. Spain, France, and Italy showed the most considerable GDP growth. Germany’s GDP was unchanged from January-March. Germany was one of the countries hit hardest by high energy prices and problems in global supply chains.

Trading recommendations

Support levels: 1.0112, 1.0035, 1.0000
Resistance levels: 1.0284, 1.0365, 1.0415, 1.050

Alternative scenario: if the price breaks down through the 1.0112 support level and fixes below, the downtrend will likely resume.

News feed for 2022.08.01:

– German Retail Sales (m/m) at 09:00 (GMT+3);
– Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
– Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
– French Manufacturing PMI (m/m) at 10:50 (GMT+3);
– German Manufacturing PMI (m/m) at 10:55 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2165
Prev Close: 1.2174
% chg. over the last day: +0.07%

The Bank of England intends to accelerate its fight against inflation. The Bank of England will hold its monetary policy and interest rate meetings this week, where it is expected (70% probability) to raise the rate by another 0.5%. This move will mark the UK’s most significant interest rate hike in 27 years. Bank of England governor Andrew Bailey suggested at a previous speech that this hike would not be the last, saying that policymakers are willing to act “decisively” if necessary to combat inflation. It should not be forgotten that there is a struggle for the Prime minister’s chair in Britain. Foreign Secretary Liz Truss has promised tax cuts if she wins the race for the leadership of the ruling Conservative Party. Former Chancellor of the Exchequer Rishi Sunak says this will increase inflation, forcing interest rates to go even higher.

Trading recommendations

Support levels: 1.2150, 1.2114, 1.2063, 1.1907, 1.1803
Resistance levels: 1.2191, 1.2238, 1.2294

From the technical point of view, the GBP/USD currency pair trend on the hourly time frame is bullish. But sellers’ pressure is increasing again. The MACD indicator is in the positive zone but shows signs of divergence already in several time frames. Under such market conditions, it is better to look for buy trades on the intraday time frames from the support level 1.2150 or 1.2114, but only with confirmation. Sell trades can be considered from the resistance level of 1.2191, but only after additional confirmation and with short targets.

Alternative scenario: if the price breaks down through the 1.2006 support level and fixes below, the downtrend will likely resume.

News feed for 2022.08.01:

– UK Manufacturing PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

Prev Open: 134.23
Prev Close: 133.21
% chg. over the last day: -0.76%

Japan included currency response measures as items to consider in its fiscal year 2023 budget, which is due later this year, budget guidance showed Friday, warning investors against selling the yen. Currencies are rarely mentioned in the annual budget guidance, so the inclusion underscores policymakers’ concerns about the rapid sell-off in the yen, which has raised living costs and hurt the terms of trade underscored by the trade deficit.

Trading recommendations

Support levels: 131.67, 130.99
Resistance levels: 133.17, 134.00, 135.10, 136.03, 137.11

From the technical point of view, the medium-term trend on the USD/JPY currency pair is bearish. In the last trading sessions, the Japanese yen is getting stronger. The MACD indicator has become negative, and the sellers’ pressure is still there, but there are signs of divergence. Under such market conditions, buy trades can be sought from the support level of 131.67, but with additional confirmation. Resistance levels of 133.17 or 134.00 may be considered for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes above 136.03, the uptrend will likely resume.

News feed for 2022.08.01:

– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

Prev Open: 1.2806
Prev Close: 1.2804
% chg. over the last day: -0.02%

Real Gross Domestic Product (GDP) was unchanged in May after growing 0.3% in April. Growth in service-producing industries (+0.4%) was offset by a decline in goods-producing industries (-1.0%). Canada’s manufacturing sector contracted by 1.7% in May after seven months of growth. Output rose in the construction, manufacturing, accommodation, and catering sectors. Declines were recorded in mining, quarrying, oil and gas extraction, financial and insurance, and professional scientific and technical services sectors.

Trading recommendations

Support levels: 1.2781
Resistance levels: 1.2880, 1.2923, 1.3006, 1.3085, 1.3154

In terms of technical analysis, the USD/CAD currency pair trend is bearish. Currently, the price is forming a wide balance and trading on the lower border of the descending channel. The MACD indicator is in the negative zone, but there is a divergence, which indicates that it is harder for the price to move lower. Under such market conditions, it is better to consider sell deals from the resistance level of 1.2880, but with confirmation. Buy trades should be considered on the lower time frames from the support level of 1.2781 or from the lower border of the channel, but only with confirmation and short targets.

Alternative scenario: if the price breaks out and consolidates above the 1.3006 resistance level, the uptrend will likely resume.

There is no news feed for today.

By JustForex

Financial News Forex and Currency News

01 Aug

Trade Of The Week: Will BoE “Go Hard Or Go Home” On Rates

By ForexTime

Take cover! Central banks across the globe have pulled out their big guns and heavy monetary artillery in the face of soaring inflation.

Last week, the Federal Reserve (Fed) raised interest rates by 75 basis points for the second straight month. In July, the Bank of Canada (BoC) hiked rates by a whooping 100 basis points! Even the European Central Bank (ECB) surprised markets with a 50-basis point hike – taking its policy rate out of negative territory in one clean move.

This week, the Bank of England (BoE) is expected to join the heavy hitters – raising rates by 50 basis points after hiking rates by 0.25% five consecutive times since December 2021. If this was a boxing ring, the short jobs against inflation have failed so the central bank is switching to haymakers and uppercuts for the knockout blow! The key question is whether the BoE will embrace the aggression or remain cautious towards rates?

Before we discuss what to expect from the BoE this week, let’s take a quick peek at the GBPUSD.

Things are looking interesting for the currency pair on the weekly charts as prices breakout from the bearish channel. A weaker dollar remains a key factor behind the Pounds recent rebound. If BoE hawks “go hard” on Thursday, this could propel the currency pair higher.

The low down…

Looking beyond the sunny weather and random bbq’s, a thunderstorm is brewing.

The outlook for the UK economy remains gloomy due to a combination of negative themes.

Inflation is through the roof with consumer prices hitting 9.4% in June – another new 40 year high thanks to soaring food and energy prices. Rising prices are squeezing millions of households, impacting consumption which remains a key engine of economic growth. The latest PMIs are not looking too pretty with manufacturing slumping to a 25-month low in July. Let’s not forget about political uncertainty and post-Brexit related drama’s adding to the already toxic cocktail. In a nutshell, economic conditions remain unfavourable with fears mounting over the UK falling into a recession.

Back in June, the central bank signalled that it would ‘act forcefully’ if the inflation menace refused to stand down. Traders are currently pricing in a 79% probability of a 50-basis point rate hike this month.

The week ahead…

The main risk event for Sterling will be the Bank of England rate decision on Thursday.

Given how markets expect the bank to move ahead with its biggest rate increase in 27 years, much attention will be directed towards the updated quarterly economic review and Governor Andrew Bailey’s press conference. These could offer some clues into the central banks thinking on inflation and UK economic outlook. More details are also expected to be released on the central banks strategy to reducing its £866 billion quantitative-easing portfolio.

Possible outcomes to BoE meeting

BoE hikes rates by 50-basis points. This decision could send the pound higher but gains may be capped if the central bank pulls a “one and done” by striking a cautious tone. This could feed expectations around no more aggressive hikes in 2022.
BoE hike rates by 50-basis points and sings a hawkish tone – fuelling speculation around more aggressive hikes down the road. Sterling rallies.
BoE hikes rates by 25-basis points. Concerns about the economic outlook keep hawks at bay with the central bank postponing aggressive hikes till September or Q4. Pound tumbles on this decision.

GBPUSD to break above 1.2350?

The GBPUSD turned bullish on the daily charts after prices conquered the 1.2060 lower high. Bulls are clearly in the vicinity with the next key point of interest at 1.2350. There have been fresh consistent highs and lows while the MACD in the process of cross above zero. A strong breakout and daily close above 1.2350 could signal a move towards 1.2500 and 1.2650, respectively. Should 1.2350 prove to be a tough nut to crack, prices may decline back towards the 50-day Simple Moving Average and 1.2060, respectively.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Forex and Currency News Opinions

01 Aug

China vs. Taiwan, Serbia vs. Kosovo – new military conflicts are already around the corner

By JustForex

The US Personal Consumer Expenditures (PCE) inflation rate, closely monitored by the Fed, is at its highest since January 1982. The PCE increased to 6.8% in June. The core PCE (which excludes food and fuel prices) was up 4.8% from a year ago and up 0.1% from May. The Employment Cost Index, another figure that Fed policymakers keep a close eye on, rose by 1.3% in the second quarter. The Index added 5.1% in 12 months, a record for a series of data tracked since 2002. Markets expect the Fed to raise rates another 0.5% in September, according to the FedWatch CME Group tracker. However, the probability of a larger three-quarter-point hike rose to 38% Friday morning.

As the stock market closed Friday, the Dow Jones Index (US30) increased by 0.97% (+2.80% for the week, +6.73% for the month ), and the S&P 500 Index (US500) added 1.42% (+4.15% for the week, +9.11% for the month). The Technology Index NASDAQ (US100) gained 1.88% on Friday (+4.67% for the week, +12.35% for the month).

Equity markets in Europe were mostly up on Friday. German DAX (DE30) added 1.52% (weekly result +2.25%, monthly result +5.24%), French CAC 40 (FR40) grew by 1.72% (weekly result +4.03%, monthly result +8.72%), Spanish Index IBEX 35 (ES35) increased by 0.88% (+1.69% for the week, -0.24% for the month), British FTSE 100 (UK100) gained 1.06% (+2.02% for the week, +3.55% for the month).

Inflation in the Eurozone broke another record and rose to 8.9% in July (8.6% in June). The energy price boom continues, and the geopolitical factors behind it show no signs of abating. Analysts expect gas supplies from Russia to remain very limited as winter approaches, putting upward pressure on energy prices. In Germany, the government recently decided to impose an energy tax on consumers starting in October. This means that inflation in Germany could rise above 10%.

Eurozone GDP growth of 0.7% QoQ was unexpectedly strong. Experts had predicted a 0.5% growth, and the consensus was even more pessimistic. The most substantial increase was in Spain (+1.1%), where GDP levels are still below pre-pandemic levels. Analysts expect Spain to benefit from a rebound in foreign tourism this summer and show positive growth numbers in the coming quarters, even if very high inflation hurts households in Spain more than in many other Eurozone countries. Growth was also strong in France (+0.5%) and Italy (+1.0%). Data from France showed that while consumption remained weak, fixed investment and exports supported growth. In Germany, GDP was unchanged from January-March. Germany was one of the countries hit hardest by high energy prices and problems in global supply chains, so the weak growth figures were not a surprise.

The media are reporting on armed clashes on the Serbian-Kosovo border. The Serbian army is on high alert, and the Serbian presidential party is already hinting at “denazification.” Serbia is an ally of Russia, and Kosovo seeks EU and NATO membership. Serbia is behaving very much like Russia before the Russians attacked Ukraine.

Asian markets traded higher last week. Japan’s Nikkei 225 (JP225) added 0.38% for the week (+7.19% for the month), Hong Kong’s Hang Seng (HK50) lost 1.75% last week (-7.67% for the month), and Australia’s S&P/ASX 200 (AU200) was up by 2.26% for the week (monthly result +6.20%).

The situation between Taiwan and China is escalating. Under the guise of exercises, China is redeploying military equipment in the province of Fujian, which is located only 180 kilometers from Taiwan. The transfer of military equipment began just after a Thursday conversation between the US president and China. US Speaker Pelosi’s planned visit to Taiwan provoked an extremely negative reaction from China, which threatened the US with unpredictable consequences, including that the Chinese People’s Liberation Army would shoot down the US speaker’s plane.

The Japanese government will not impose a cap on the defense budget request for the next fiscal year, stressing its determination to increase spending to counter China’s military assertiveness. The government will also allocate about 4.4 trillion yen ($33.12 billion) to Kishida’s “new capitalism” program, which aims to invest in green and digital transformation areas.

After more than two years, New Zealand is fully opening its borders and welcoming all international travelers. According to the New Zealand Ministry of Health, travelers need a rapid antigen test on the day of arrival and a second test on the fifth or sixth day of their trip. Masks are not required outdoors, but they are required indoors.

In the commodities market, natural gas (+27.52%) and palladium (+9.09%) futures showed the biggest gains in July. Gasoline futures (-17.24%), wheat (-12.72%), lumber (-10.06%), Brent oil (-10.55%), WTI oil (-10.46%), corn (-6.85%), sugar (-5.13%), copper (-4.92%), and coffee (-4.69%) showed the biggest drops in July.

S&P 500 (F) (US500) 4,130.29 +57.86 (+1.42%)

Dow Jones (US30) 32,845.13 +315.50 (+0.97%)

DAX (DE40) 13,484.05 +201.94 (+1.52%)

FTSE 100 (UK100) 7,423.43 +78.18 (+1.06%)

USD Index 105.83 −0.52 (−0.49%)

Important events for today:

– Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
– China Caixin Manufacturing PMI (m/m) at 04:45 (GMT+3);
– German Retail Sales (m/m) at 09:00 (GMT+3);
– Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
– Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
– French Manufacturing PMI (m/m) at 10:50 (GMT+3);
– German Manufacturing PMI (m/m) at 10:55 (GMT+3);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
– US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3).

By JustForex

Economics & Fundamentals Financial News

01 Aug

Chart Spotlight: Tellurian Inc. (TELL)

By Ino.com

Natural gas prices are exploding.

For one, Russia said it would cut natural gas shipments to Europe.

In fact, as noted by Barron’s, “Russian company Gazprom said on Monday that it will cut natural gas shipments from the key Nord Stream pipeline to Germany starting this week. The pipeline’s exports will be cut to 20% of capacity, down from 40%, because of a sanctions-related issue with turbines serving the pipeline.”

Two, there are drought conditions in the U.S., and a heat wave forcing millions to turn up their air conditioners to full blast.

Three, according to EQT CEO Toby Rice, as quoted by Barron’s, “In the United States, we’ve got the natural gas here, we’ll be fine. But you think about our allies in Europe, and the tremendous power and influence that Russia has on these countries. Clearly, we need to take away the gun, and provide the energy to our allies around the world.”

All could create a big opportunity for natural gas stocks, like Tellurian (TELL).

Tellurian – a $2.1 billion company – is “building a low-cost, global natural gas business, profitably delivering natural gas to customers worldwide.”

Better, the company could benefit from a substantial shortage of natural gas.

In fact, according to its latest investor deck, geopolitics and energy security providing a step change in global LNG demand. Tellurian notes there’s (1) underinvestment in energy and post-CV structural growth have collided with a geopolitical crisis; (2) A need to replace 20 Bcf/d of Russian gas to Europe, equivalent to ~35% of the world’s LNG market; (3) Natural gas shortage expected to lead to catastrophic consequences.

Technically, according to MarketClub, shares of TELL are slightly overbought. The MarketClub Smart Scan also gives the stock a score of +60, which tells us at the moment, the stock is struggling to move in a solid trend.

However, with natural gas prices showing no signs of cooling off, I’d like to see the stock run from a current price of $3.68 to $5, near-term.

The MarketClub Trade Triangles are also mostly green.

While it’s telling us that the longer-term trend has been down over the last month, the intermediate trend has been strong since mid-July. In addition, the short-term trend, according to Market Club, has been up since mid-July as well.

Source: MarketClub

Ian Cooper
INO.com Contributor

The above analysis of Tellurian Inc. (TELL) was provided by financial writer Ian Cooper. Ian Cooper is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Ian Cooper expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

By Ino.com – See our Trader Blog, INO TV Free & Market Analysis Alerts

Source: Chart Spotlight: Tellurian Inc. (TELL)

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