The Week Ahead – Economic Data, Monetary Policy, and COVID-19 in Focus

On the Macro

It’s quieter week ahead on the economic calendar, with 51 stats in focus in the week ending 6th August. In the week prior, 71 stats had also been in focus.

For the Dollar:

From the private sector, ISM Manufacturing and Non-Manufacturing PMIs for July will be in focus.

Expect the Non-Manufacturing PMI due out on Wednesday to have the greatest impact.

On the labor market front, ADP nonfarm employment change and weekly jobless claims figures on Wednesday and Thursday will also influence.

Nonfarm payrolls at the end of the week, however, will be the key stat of the week.

In the week ending 30th July, the Dollar Spot Index fell by 0.79% to 92.174.

For the EUR:

It’s a busy week on the economic data front.

Private sector PMIs for Italy and Spain together with finalized numbers for France, Germany, and the Eurozone will influence.

Expect Italy and the Eurozone’s PMIs to be key in the week.

German and Eurozone retail sales figures will also influence, with consumption key to a sustainable economic recovery.

For the week, the EUR rose by 0.84% to $1.1870.

For the Pound:

It’s a relatively quiet week ahead on the economic calendar.

Finalized private sector PMIs for July are due out on Monday and Wednesday.

Expect any revisions to the services PMI to have a greater impact in the week.

Construction PMIs also due out, should have a muted impact, however.

While the finalized numbers will influence, the Bank of England monetary policy decision on Thursday will be the main event.

Last week, the IMF talked up the outlook for the British economy. It now rests in the hands of the BoE.

The Pound ended the week up by 1.13% to $1.3904.

For the Loonie:

It’s a busier week ahead on the economic calendar.

Trade data on Thursday and employment change figures on Friday will be the key numbers.

While trade figures will influence, expect the employment change figures to have a greater impact.

The Loonie ended the week up 0.71% to C$1.2475 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

Manufacturing sector data, building permits, retail sales, and trade data will be in focus.

Retail sales and trade data, due out on Wednesday and Thursday, will be the key stats of the week.

On the monetary policy front, however, the RBA monetary policy decision on Tuesday will be the main event.

The Aussie Dollar ended the week down by 0.30% to $0.7344.

For the Kiwi Dollar:

It’s a quiet week ahead. Mid-week, employment change figures will draw interest ahead of inflation expectation numbers on Friday.

With little else for the markets to consider in the week, expect both sets of numbers to provide direction. The markets are expecting a further pickup in inflationary pressures…

The Kiwi Dollar ended the week flat at $0.6974.

For the Japanese Yen:

Finalized private sector PMIs and Tokyo inflation figures will be in focus in the 1st half of the week.

Expect any revision to the PMIs to be of greater influence.

Late in the week, household spending figures will also draw interest.

The Japanese Yen rose by 0.75% to ¥109.720 against the U.S Dollar.

Out of China

It’s a busier day, with private sector PMIs to provide the markets with direction.

Following NBS numbers from the weekend, the market’s preferred Caixin manufacturing PMI will set the tone. Over the weekend, the NBS Manufacturing PMI fell from 50.9 to 50.4…

With service sector activity a greater component of the economy, Wednesday’s services PMI will also influence, however.

The Chinese Yuan ended the week up by 0.31% to CNY6.4614 against the U.S Dollar.

Geo-Politics

Russia and China continue to be the main areas of interest for the markets. News updates from the Middle East will also need continued monitoring…

The Weekly Wrap – A Dovish FED and Weak Stats Left the Greenback in the Red

The Stats

It was a busy week on the economic calendar, in the week ending 30th July.

A total of 71 stats were monitored, which was up from 33 stats in the week prior.

Of the 71 stats, 37 came in ahead forecasts, with 30 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 42 of the stats reflected an upward trend from previous figures. Of the remaining 29 stats, 27 reflected a deterioration from previous.

For the Greenback, disappointing economic data and a dovish FED left the Dollar in the red. The Dollar Spot Index fell by 0.79% to 92.174. In the previous week, the Dollar had risen by 0.24% to 92.906.

Out of the U.S

Consumer sentiment and durable goods orders drew attention early in the week.

In June, durable goods orders ex transportation rose by 0.3%, following a 0.5% increase in May.

More significantly was a pickup in consumer confidence in July. The CB Consumer Confidence Index rose from 128.9 to 129.1. Economists had forecast a decline to 126.0.

On Thursday, jobless claims and 2nd quarter GDP numbers were in focus. The stats were skewed to the negative, however.

In the 2nd quarter, the U.S economy grew by 6.5%. This fell well short of a forecasted growth of 8.5%.

Jobless claims also fell short of expectations, with initial jobless claims falling from 424k to 400k. Economists had forecast a decline to 370k.

At the end of the week, personal spending and inflation figures came in ahead of forecasts, however.

Personal spending rose by 1.0% in June, with the annual rate of inflation seeing a pickup from 3.4% to 3.5%.

While the stats were material, the FED monetary policy and press conference were the main events of the week.

In line with market expectations, the FED left policy unchanged. The FED Chair also looked to assure the markets that there would be no near-term moves, the guidance considered dovish.

Out of the UK

It was a particularly quiet week. There were no major stats for the markets to consider in the week.

The lack of stats left the Pound in the hands of IMF economic growth forecasts, which delivered Pound support.

In the week, the Pound rose by 1.13% to end the week at $1.3904. In the week prior, the Pound had fallen by 0.14% to $1.3748.

The FTSE100 ended the week up by 0.07%, following a 0.28% gain from the previous week.

Out of the Eurozone

Through much of the week, the German economy was in focus.

Business and consumer sentiment figures delivered mixed results. While business sentiment waned in July, consumer confidence remained unchanged, in spite of the reopening of economies.

Unemployment figures from Germany were upbeat. The unemployment fell from 5.9% to 5.7% in July.

Inflationary pressures continued to surge, however, with Germany’s annual rate of inflation accelerating in July to 3.8%.

At the end of the week, 1st estimate GDP numbers and prelim inflation figures were the key stats of the week.

Quarter-on-quarter, the French economy grew by 0.9% versus a forecasted 0.7% in the 2nd quarter.

Germany saw growth of 1.5%, falling short of a forecasted 1.9%. In the 1st quarter, the economy had contracted by 2.1%.

For the Eurozone, the economy grew by 2.0%, coming in ahead of a forecasted 1.5%. The economy had contracted by 0.3% in the previous quarter.

Inflation also ticked up, aligned with member state numbers. According to prelim figures, the Eurozone’s annual rate of inflation accelerated from 1.9% to 2.2% in July, rising above the ECB’s 2% target.

For the week, the EUR rose by 0.84% to $1.1870. In the week prior, the EUR had fallen by 0.30% to $1.1771.

The DAX30 fell by 0.67%, while the CAC40 and the EuroStoxx600 ended the week up by 0.67% and by 0.05% respectively.

For the Loonie

It was a relatively quiet week on the economic data front.

Inflation and GDP numbers were the key stats of the week.

In June, the annual rate of inflation softened from 2.8% to 2.7%, bucking the trend seen across key economies.

The Canadian economy also continued to struggle in May, with the economy contracting by 0.3%. The economy had contracted by 0.5% in April.

In the week ending 30th July, the Loonie rose by 0.71% to C$1.2475. In the week prior, the Loonie had risen by 0.39% to C$1.2564.

Elsewhere

It was a mixed week for the Aussie Dollar and the Kiwi Dollar.

While the Aussie Dollar fell by 0.30% to $0.7344, the Kiwi Dollar ended the week flat at $0.6974.

For the Aussie Dollar

Inflation was the main area of focus. The stats were mixed, however, pegging the Aussie Dollar back.

In the 2nd quarter, the annual rate of inflation surged from 1.1% to 3.8%. The trimmed mean rate of inflation picked up from 1.1% to 1.6%, however.

Wholesale inflation also saw a pickup but at a softer pace than anticipated.

Australia’s annual wholesale rate of inflation ticked up from 0.2% to 2.2%. Economists had forecast a rate of 3.5%.

For the Kiwi Dollar

It was a busier week, with trade and consumer and business confidence in focus.

Trade data disappointed, with the trade surplus narrowing from NZ$498m to NZ$261m in June. The narrowing stemmed from a more marked increase in imports, however, rather than a fall exports, which limited the damage.

Business and consumer confidence figures were also skewed to the negative. The ANZ Business Confidence Index fell from -0.60 to -3.80, with the ANZ Consumer Confidence Index falling from 114 to 113.1.

The week numbers were not enough to sink the Kiwi.

For the Japanese Yen

It was another relatively busy week.

Early in the week, private sector PMIs were in focus. Later in the week industrial production and retail sales also drew attention on Friday.

While prelim private sector PMIs softened slightly in July, industrial production and retail sales impressed.

Industrial production jumped by 6.2% in June, reversing a 6.5% slide from May. More significantly, retail sales increased by 3.1%, reversing a 0.4% decline from May.

The Japanese Yen rose by 0.75% to ¥109.72 against the U.S Dollar. In the week prior, the Yen had fallen by 0.44% to ¥110.550.

Out of China

It was a quiet week on the economic data front. There were no major stats from China for the markets to consider.

In the week ending 30th July, the Chinese Yuan rose by 0.31% to CNY6.4614. In the week prior, the Yuan had ended the week down by 0.03% to CNY6.4813.

The CSI300 and the Hang Seng ended the week down by 4.98% and by 5.46% respectively.

GBP/USD Weekly Price Forecast – British Pound Continues to Look Strong

The British pound has rallied significantly during the course of the trading session to show signs of life again, as the market is more than likely going to try to move against the US dollar in one fell swoop. That being said, the 1.40 handle is an area that has been significant resistance in the past, so I would not be surprised at all to see a little bit of a pullback. If and when we can break above that 1.40 level though, then it is likely we go looking towards 1.42 handle, which is where we have seen a massive amount of resistance in the past. Ultimately, this is a market that I think will continue to see choppy behavior, and as we head into August, I think we will see a little less in the way of momentum.

GBP/USD Video 02.08.21

When you look at the 1.42 handle, it is an area that has been like a brick wall for several years, and I think breaking above there would make this market a longer-term “buy-and-hold” type of situation. I do not necessarily see that happening easily, and I do not necessarily see that happening in the next week or two. I think this is more or less going to be a bit of a grind higher, especially as we head into what is traditionally one of the quietest times of the year.

That being said, if we pull back it is likely that we will go looking towards the 1.37 handle underneath, where we launched from earlier this week. Ultimately, this is a market that needs to make up its mind for a bigger move.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Pulls Back From Major Barrier

The British pound has initially rallied during the course of the trading session on Friday, but then pulled back to show signs of exhaustion at the 1.40 handle. That being the case, the market is likely to see a lot of pressure in this area as it is a large, round, psychologically significant figure, and of course the market will be paying attention to it. Quite frankly, if we can break above the 1.40 handle, that would be a very bullish sign for the British pound and could send this market much higher. On the other hand, if we were to break down below the 50 day EMA, that could cause some issues.

GBP/USD Video 02.08.21

Breaking down below the 50 day EMA then opens up the possibility of a move back down to the 1.37 handle, which is where I would also expect to see the 200 day EMA sits at. With that being the case, I think this is a market that will try to break down significantly, perhaps reaching to the 1.35 handle if we do get down there. That being said, the most recent move has been as bullish as it has ever been, so I think it would take something rather ugly to make this a reality.

With this situation, I would be much more likely to buy a pullback on signs of support if we get it than to be short of this market, at least as things stand at the moment. Whether or not we can break above the 1.42 handle above is a completely different question that we may have to ask in the next few weeks. That is an area that has been crucial more than once.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – U.S. Dollar Gains Ground After Yesterday’s Sell-Off

British Pound Is Moving Lower Against U.S. Dollar

GBP/USD is currently trying to settle back below the support at 1.3950 while the U.S. dollar is gaining some ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the support level at the 50 EMA at 91.90 and is trying to get back above the 92 level. In case this attempt is successful, the U.S. Dollar Index will move towards the resistance at 92.15 which will be bearish for GBP/USD.

There are no important economic reports scheduled to be released in the UK today so foreign exchange market traders will focus on the economic data from U.S.

Analysts expect that Personal Income declined by 0.3% month-over-month in June after falling by 2% in May. Meanwhile, Personal Spending is projected to grow by 0.7%.

Traders will also have a chance to take a look at the final reading of Consumer Sentiment report for July which is projected to show that Consumer Sentiment declined from 85.5 in June to 80.8 in July.

Technical Analysis

gbp usd july 30 2021

GBP/USD is testing the nearest support level which is located at 1.3950. In case this test is successful, GBP/USD will move towards the next support at 1.3920.

In case GBP/USD gets below the support at 1.3920, it will head towards the next support at 1.3900. A successful test of this level will open the way to the test of the support which is located at the 50 EMA at 1.3880.

On the upside, GBP/USD needs to get back above 1.3950 to have a chance to develop upside momentum in the near term. The next resistance level for GBP/USD is located at the recent highs at 1.3980.

If GBP/USD manages to settle above the resistance at 1.3980, it will move towards the next resistance level at 1.4000.

A move above the resistance at 1.4000 will push GBP/USD towards the resistance at 1.4020. In case GBP/USD gets above this level, it will head towards the next resistance level at 1.4040.

For a look at all of today’s economic events, check out our economic calendar.

A Busy Economic Calendar Puts the EUR, the Loonie, and the Greenback in Focus

Earlier in the Day:

It was a busy quiet start to the day on the economic calendar this morning. The Kiwi Dollar and the Japanese Yen were in action in the early part of the day. Later this morning, the Aussie Dollar will also be in focus.

For the Kiwi Dollar

Consumer confidence and housing sector data were in focus this morning.

In June, building permits rose by 3.8%, reversing a 2.40% slide in May. Economists had forecast a 1.10% decline.

Of greater significance, however, was a modest fall in consumer confidence.

In July, the ANZ Consumer Confidence Index fell from 114.0 to 113.1. Economists had forecast a decline to 113.0.

According to the July survey,

  • A good time to buy a major household item rose 2 points to +24, a fresh post-COVID high.
  • Sentiment towards the finances in a year’s time also improved. A net 23% expect to be better off this time next year, up 1 point.
  • This was in contrast to sentiment towards current financial situations, which fell 6 points to +8%.
  • Views towards the economic outlook were also mixed.
  • Perceptions regarding the next year’s economic outlook fell 5 points to -2%, while the 5-year outlook rose by 2 points to +12%.

The Kiwi Dollar moved from $0.70039 to $0.70162 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.01% to $0.7011.

For the Japanese Yen

Industrial production increased by 6.2% in June, according to prelim figures, reversing most of a 6.5% slide from May. Economists had forecast a 5.1% increase.

According to the Ministry of Economy, Trade and Industry,

  • Industries that mainly contributed to the increase were motor vehicles, production machinery, and electronic parts & devices.
  • Industries that mainly contributed to the decrease were transport equipment (excl. motor vehicles) and ceramics, stone, & clay products.

According to the Ministry of Economy, Trade and Industry, retail sales increased 3.1%, reversing a 0.4% decline from May. Economists had forecast a 3.6% slide.

The Japanese Yen moved from ¥109.416 to ¥109.402 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.05% to ¥109.420 against the U.S Dollar.

For the Aussie Dollar

Wholesale inflation and private sector credit figures will draw interest.

On the inflation front, the annual wholesale rate of inflation is forecast to accelerate from 0.2% to 3.5%.

Quarter-on-quarter, economists have forecast for the producer price index to rise by 2.1%, following a 0.4% increase in the 1st quarter.

At the time of writing, the Aussie Dollar was flat at $0.7396.

The Day Ahead

For the EUR

It’s a particularly busy day ahead on the economic data front, with the 2nd quarter GDP numbers, consumer spending, and inflation in focus.

French, German, and Eurozone 1st estimate GDP numbers for the 2nd quarter will be the key stats of the day, however.

At the time of writing, the EUR was up by 0.03% to $1.1891.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

The lack of stats leaves the IMF’s growth forecasts for the UK, delivered earlier in the week, to continue to resonate.

At the time of writing, the Pound was up by 0.05% to $1.3966.

Across the Pond

It’s a busy day ahead on the economic calendar.

Personal spending and inflation figures for June together with finalized consumer sentiment figures for July will be in focus.

Barring any marked revisions to prelim consumer sentiment figures, expect the personal spending and inflation figures to be key.

Following the FED’s policy decision on Wednesday, any FOMC member chatter will also need monitoring.

On Thursday, the U.S Dollar Spot Index ended the day down by 0.50% to 91.864.

For the Loonie

It’s also a busy day on the economic calendar. Wholesale inflation, RMPI, and GDP numbers will be in focus.

With a lack of stats through much of the week, expect Loonie sensitivity to today’s numbers.

Away from the economic calendar, crude oil prices and market risk sentiment will also influence.

At the time of writing, the Loonie was down by 0.01% to C$1.2449 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Reaching Towards Big Figure Again

The British pound has rallied significantly during the trading session again on Thursday as we continue to see the Pound recover. The 1.40 handle is of course a big figure that a lot of people will pay close attention to, as it will cause a lot of headlines. Furthermore, the market will more than likely continue to favor the idea of the US dollar softening unless of course we get some type of “risk off” scenario. After all, the US dollar is considered to be a massive safety asset, so it will be interesting to see how things play out over the next several days. That being said, if we can break above the 1.40 handle, it is likely that the market goes much higher, perhaps testing the 1.42 level again.

GBP/USD Video 30.07.21

To the downside, if the market was to show signs of exhaustion, we could drop down towards the 1.37 level underneath, which of course has attracted attention previously. The 200 day EMA is sitting in that same general vicinity, and therefore there could be a significant amount of support in that region. With that being said, it would not surprise me at all to see a little bit of a pullback simply because we are a bit overextended during the last two weeks or so.

All things been equal, this is a market that I think is trying to figure out where it wants to go longer term, but I would be a bit surprised if we simply slice through the 1.40 handle, because of the overextension. Ultimately, I do not think it would take much to have people push to the downside.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – U.S. Dollar Declines As Fed Remains Dovish

British Pound Is Moving Higher Against U.S. Dollar

GBP/USD is moving towards the resistance level at 1.3950 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index is currently trying to settle below the support level at 92.15. In case this attempt is successful, the U.S. Dollar Index will get to the test of the next support at the 92 level which will be bullish for GBP/USD.

Yesterday, Fed Chair Jerome Powell reiterated his dovish message and stated that inflation pressures remained transitory. The Fed maintains its current asset purchase program, although some Fed members have started to discuss whether the Fed should reduce the purchases mortgage-backed securities before it reduces the purchases of Treasuries. The Fed will likely provide additional details about such discussions in Jackson Hole at the end of August.

The U.S. dollar lost ground against a broad basket of currencies after Fed’s comments as traders expected to see more clarity on the future reduction of asset purchase program. At this point, it looks that the Fed will not begin to reduce asset purchases before 2022, which is rather bearish for the American currency.

Technical Analysis

gbp usd july 29 2021

GBP/USD managed to get above the resistance at 1.3920 and continues its upside move. The next resistance level for GBP/USD is located at 1.3950. In case GBP/USD settles above this level, it will move towards the resistance at 1.3980.

A successful test of the resistance at 1.3980 will push GBP/USD towards the resistance at 1.4000. If GBP/USD manages to settle above this level, it will head towards the next resistance level at 1.4020.

On the support side, the previous resistance at 1.3920 will serve as the first support level for GBP/USD. In case GBP/USD declines below 1.3920, it will move towards the next support at 1.3900.

A move below 1.3900 will push GBP/USD towards the support which is located at the 50 EMA at 1.3880. A successful test of the support at the 50 EMA will push GBP/USD towards the support at 1.3865.

For a look at all of today’s economic events, check out our economic calendar.

Powell Presses Pause on Dollar’s Rally; Sterling Surging

By Tom Westbrook

About a month of dollar gains had already lost momentum leading in to Wednesday’s Federal Reserve meeting and Chairman Jerome Powell’s remark that rate increases were “a ways away” was enough to tip it a touch lower still.

The euro edged to a two-week high of $1.1860 and the Australian and New Zealand dollars clung to gains made in a bounce on Wednesday. Sterling, which has been surging on optimism over the re-opening of the British economy, touched a one-month high of $1.3940.

The dollar index was softer for a fourth straight session, last trading at a two-week low of 92.110, while the Chinese yuan edged up to stand as high as 6.4691 per dollar in onshore trade and has now regained ground lost in tandem with a regulatory-driven plunge in Chinese equities on Tuesday. [CNY/]

“In the short-term, there’s been a reduction of taper fears, and that’s why we’ve seen the dollar heading lower,” said Jeffrey Halley, senior analyst at brokerage OANDA in Jakarta.

“Improving risk sentiment should be associated with a weaker dollar,” added National Australia Bank’s head of FX strategy Ray Attrill.

A Bloomberg report on a call China’s securities regulator held with banks and brokers to soothe nerves following heavy equities selling also helped sentiment and riskier currencies.

A CNBC report saying China Securities Regulatory Commission told brokerages on the call that China would continue to allow companies to list in the United States offered further support, as did solid rises in Chinese stock indexes on Thursday.

The Australian dollar was last up about 0.1% at $0.7379, capped by concerns over a lengthening lockdown in Sydney that is likely to drag on the national economy.

The New Zealand dollar rose 0.2% to $0.6971.

SURGING STERLING

Recent resilience in safe-haven currencies such as the Japanese yen and Swiss franc suggests plenty of caution remains in currency markets as global coronavirus cases rise, yet at the same time sterling’s gains reflect optimism that the British economy can be re-opened as vaccinations progress.

The British currency is the biggest G10 gainer on the dollar this week. It climbed some 2.6% from a five-month low it touched last week to the one-month top it hit on Thursday.

The pound notched up its highest levels in almost four months on the euro on Wednesday. It has also made strong gains on the yen and especially on the Australian dollar, against which it is up 3.6% from low touched in early July.

Though experts and Prime Minister Boris Johnson have cautioned it is too early to draw conclusions, England’s re-opening last week has yet to spark a surge in cases or in hospitalisations.

“At the moment, the UK’s (COVID) position is pretty good and I do think that’s had an impact,” said NAB’s Attrill.

Later on Thursday, traders will be looking at German labour and inflation data, European sentiment surveys and second-quarter U.S. GDP – where the consensus is for 8.5% annualised growth, albeit from a wide range of forecasts.

(Reporting by Tom Westbrook; Editing by Edwina Gibbs)

Economic Data from the Eurozone and the U.S Put the EUR and the Dollar in the Spotlight

Earlier in the Day:

It was another relatively quiet start to the day on the economic calendar this morning. The Kiwi Dollar was in action in the early part of the day.

For the Kiwi Dollar

Business confidence was in focus this morning.

In July, the ANZ Business Confidence Index fell from -0.6 to -3.8%. Economists had forecast an increased to 1.2%.

According to the latest ANZ Report,

  • While business confidence was down, firms’ own activity rose by 5 points to +32%.
  • Investment intentions increased by 7 points to 25.5%, while employment intentions eased by 1 point.
  • Cost expectations rose by 5 points to a net 86.2%. A net 62.8% of respondents intend to raise their prices, up 6 points. General inflation expectations rose by 19 bps to 2.41%.
  • Profit expectations increased by 2 points to 5.8%, however.
  • Export intentions rose by a modest 1 point to 13.4%.

The Kiwi Dollar moved from $0.69584 to $0.69545 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.07% to $0.6954.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.16% to ¥109.730 against the U.S Dollar, while the Aussie Dollar was down by 0.15% to $0.7365.

The Day Ahead

For the EUR

It’s a relatively busy day ahead on the economic data front, with the German economy back in the spotlight.

Unemployment and inflation figures will be in focus later today.  Expect plenty of interest in the numbers, with market sensitivity to inflation lingering despite the ECB’s latest shift in its price objective.

At the time of writing, the EUR was up by 0.03% to $1.1848.

For the Pound

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

At the time of writing, the Pound was up by 0.06% to $1.3911.

Across the Pond

It’s a busy day ahead on the economic calendar.

1st estimate GDP numbers for the 2nd quarter and weekly jobless claims figures will be in focus later today.

We can expect plenty of interest in today’s numbers. Expect any sharp increase in jobless claims to overshadow positive GDP numbers, however.

At the time of writing, the U.S Dollar Spot Index was down by 0.09% to 92.235.

For the Loonie

It’s a quiet day on the economic calendar, with no material stats from Canada to provide the Loonie with direction.

The lack of stats will leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was up by 0.05% to C$1.2522 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Hesitates at 50 Day EMA

The British pound has initially tried to rally during the trading session on Wednesday, but then pulled back a bit to show signs of hesitation at the 50 day EMA. It should also be noted that there is a significant amount of resistance just above, and it is also likely that the Federal Reserve statement later in the day will have a lot to do with what happens next. Because of this, I would be cautious about putting too much money to work, but I think the statement will have a lot to do with where the US dollar will go, which of course will have its own influence on this market.

GBP/USD Video 29.07.21

The markets have seen quite a nice move in the British pound from the lows, and I think at this point in time it is likely that we will continue to see a lot of choppy behavior, and therefore we will have to make a longer-term decision, which I expect to see a bit of progress in making by the end of the session as Jerome Powell and his statement will have a lot to do with what happens with the greenback. I think at this point, a little bit of a pullback would not necessarily rule out the idea of a move higher, as we have gotten a bit ahead of ourselves. The key is going to be near the 200 day EMA which is also sitting at 1.37 as well. Because of this, I think that the next day or so could be choppy, but if we were to somehow get to the 1.40 handle, that foretells a potential big move.

For a look at all of today’s economic events, check out our economic calendar.

Fall in UK COVID-19 Infections Boosts Sterling Sentiment

By Elizabeth Howcroft

Elsewhere currency markets were generally cautious ahead of the U.S. Federal Reserve meeting later in the session. Markets are waiting to see if the Fed will provide any clues on the timing of any slowdown in its bond-buying programme, amid surging U.S. inflation.

Sterling held on to recent gains. The sterling-dollar pair saw a sudden surge on Tuesday around the time at which daily foreign exchange benchmarks are calculated.

At 1100 GMT, the pound was flat on the day versus the dollar, at $1.38825, close to a 13-day high.

Versus the euro, it was up around 0.1% at 0.8503, having briefly crossed the key 0.85 level for the first time since April earlier in the session.

Analysts attributed the pound’s gains to COVID-19 cases in Britain declining over the last seven days, although British Prime Minister Boris Johnson advised against drawing conclusions from the data, saying it was too early to assess whether there was a definite trend.

“It’s been a good week for sterling, reflecting the fact that virus cases have gone down rather than up,” said Colin Asher, senior economist at Mizuho in London. “If we roll into next week’s BOE meeting with (daily) cases below 10,000 then the BOE may be less cautious than was expected.

“We will probably see upgrades to BOE forecasts on inflation and growth. I think UK data is strong enough to expect that QE could be terminated early,” Asher added, referring to the quantitative easing or bond-buying scheme.

SHIFT IN RHETORIC

The Bank of England looks set to keep its stimulus running at full speed next week despite two policymakers breaking ranks to suggest that its nearly 900 billion pound ($1.2 trillion) QE programme might have to end early as inflation speeds up.

Stuart Cole, head macro economist at Equiti Capital, said fall COVID-19 cases and more optimism for growth in the second half of the year were raising expectations for a shift in the monetary policy committee’s rhetoric.

Bank of England interest-rate setter Michael Saunders could possibly vote to curtail the bond-buying programme, Cole said.

Sentiment was also lifted by an expected lessening of travel restrictions for visitors to England from abroad.

Speculators went net short on the pound for the first time since December 2020 in the week up to last Tuesday, CFTC data showed on Friday.

“GBP is heading into next week’s Bank of England meeting with a balanced positioning, which may be allowing some hawkish speculation to emerge,” wrote ING strategists in a note to clients.

(Reporting by Elizabeth HowcroftEditing by Alex Richardson and David Holmes)

GBP/USD V-Shape Reversal in Play

The 1-2-3 pattern is making a rejection at the lows. We should see a move to the upside as price is slowly crawling to the resistance zone. If the market closes above 1.3900, the next level is 1.3950. A move above 1.3950 will pave a way towards 1.4080. The GBP/USD is bullish despite the USD strength and I will be buying the dips again.

For a look at all of today’s economic events, check out our economic calendar.

Cheers and safe trading,

Nenad

 

GBP/USD Daily Forecast – U.S. Dollar Tries To Gain Some Ground Ahead Of Fed Interest Rate Decision

British Pound Pulls Back Against U.S. Dollar

GBP/USD is currently testing the support at the 50 EMA at 1.3875 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle below the 20 EMA at 92.45 but remains close to this level. In case the U.S. Dollar Index settles below the 20 EMA, it will move towards the support at 92.30 which will be bullish for GBP/USD.

Today, foreign exchange market traders will focus on Fed Interest Rate Decision and subsequent commentary. The rate is expected to stay unchanged, but traders will have a chance to learn whether Fed has started to discuss the future of its asset purchase program.

At this point, it looks that the Fed will stay very dovish as the recent spread of the Delta variant of coronavirus has added uncertainty to the economic outlook. However, if any comments sound hawkish, the U.S. dollar may get additional support.

Technical Analysis

gbp usd july 28 2021

GBP/USD faced resistance near 1.3900 and made an attempt to settle below the 50 EMA which is located at 1.3875. In case GBP/USD manages to settle below the 50 EMA, it will gain downside momentum and move towards the next support level at 1.3835. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

If GBP/USD settles below 1.3835, it will move towards the support at the 20 EMA at 1.3810. A successful test of this level will push GBP/USD towards the next support at 1.3800.

On the upside, the nearest resistance level for GBP/USD is located at 1.3900. A move above this level will signal that GBP/USD is ready to continue its rebound. The next resistance is located at 1.3920. If GBP/USD gets above this level, it will move towards the resistance at 1.3950. A successful test of the resistance at 1.3950 will open the way to the test of the resistance at 1.3980.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data Puts the EUR in Focus ahead of the FED Policy Decision and Press Conference

Earlier in the Day:

It was a relatively quiet start to the day on the economic calendar this morning. The Aussie Dollar was in action in the early part of the day.

For the Aussie Dollar

Inflation was in focus this morning.

In the 2nd quarter, the annual rate of inflation accelerated from 1.1% to 3.8%. Economists had forecast a pickup to 4.0%.

Quarter-on-quarter, consumer prices rose by 0.8%, falling short of a forecasted 1.0% rise. In the 1st quarter, consumer prices had risen by 0.6%.

According to the ABS,

  • The most significant price rises in the June quarter were automotive fuel (+6.5%) and medical and hospital services (+2.4%).
  • Electricity prices rose by 3.3% as a result of the continued unwinding of the Western Australian Government’s A$600 electricity credit.
  • In the 2nd quarter, the trimmed mean annual rate of inflation picked up from 1.1% to 1.6%.

The Aussie Dollar moved from $0.73726 to $0.73660 upon release of the figures. At the time of writing, the Aussie Dollar up by 0.07% to $0.7367.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.08% to ¥109.870 against the U.S Dollar, while the Kiwi Dollar was up by 0.12% to $0.69640.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic data front. Consumer sentiment figures from Germany will be in focus early in the European session.

With little else for the markets to consider, we can expect EUR sensitivity to the numbers. While economist have forecast for confidence to improve, the Delta variant could test consumer optimism near-term.

At the time of writing, the EUR was up by 0.03% to $1.1820.

For the Pound

It’s another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

Further demand for the Pound is likely following the IMF’s outlook towards the UK economy.

At the time of writing, the Pound was up by 0.06% to $1.3888.

Across the Pond

It’s a relatively quiet day ahead on the economic calendar. Trade data for June will be in focus later in the day. We don’t expect the numbers to have a material impact on the Dollar and the broader markets, however.

The market focus will be on the FED interest rate decision and press conference scheduled for late in the U.S session.

The question will be whether the FED Chair can continue to convince the markets of unwavering policy support.

At the time of writing, the U.S Dollar Spot Index was up by 0.02% to 92.453.

For the Loonie

It’s relatively quiet day on the economic calendar, with inflation figures in focus.

After a quiet start to the week, we will expect the Loonie to be responsive to the numbers.

Ultimately, however, market risk sentiment and crude oil prices will remain the key drivers on the day.

At the time of writing, the Loonie was up by 0.13% to C$1.2586 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Recovers Initial Losses

The British pound has initially fallen during the course of the trading session on Tuesday only to turn around and show signs of strength again. Ultimately, this is a sign that we probably go much higher, perhaps trying to reach towards the 50 day EMA. The 50 day EMA will course attract a certain amount attention, and it should be noted that the British pound certainly is trying to find its way to the upside.

GBP/USD Video 28.07.21

If we can break above that 50 day EMA, then it is likely that the market could go looking towards the 1.40 handle. The 1.40 handle is a large, round, psychologically significant figure that a lot of people would be paying attention to if and when it gets hit. I do believe that the market will have a couple of rough days ahead, but it is obvious that we have to make some type of longer-term decision soon. The question now is what happens with the US dollar? I think we get some answers by the end of the day on Wednesday, as the Federal Reserve will release its statement.

If we do break down below the 200 day EMA, then it is likely that we could go looking towards the 1.35 handle, which of course is an area that I think would attract a lot of attention as it is an area that has been supportive in the past. That being said, you should pay attention to the fact that the previous weekly candlestick was a hammer, which of course shows significant strength. Ultimately, this is a market that I think continues to see a lot of indecision in the short term.

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Daily Forecast – British Pound Pulls Back Against U.S. Dollar

U.S. Dollar Tries To Move Higher Against British Pound

GBP/USD is currently trying to stay above the resistance at 1.3800 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index failed to settle below 92.50 and moved closer to 92.70. The nearest resistance level for the U.S. Dollar Index is located at 92.80. If the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 93.10 which will be bearish for GBP/USD.

Today, foreign exchange market traders will focus on the economic data from U.S. Analysts expect that Durable Goods Orders increased by 2.1% month-over-month in June after growing by 2.3% in May.

Case-Shiller Home Price Index is projected to grow by 16.4% year-over-year in May, while CB Consumer Confidence is expected to decline from 127.3 in June to 123.9 in July.

Traders will also continue to monitor the developments in U.S. government bond markets. The yield of 10-year Treasuries has recently made several attempts to settle above 1.30% but failed to develop sufficient upside momentum. A move above this level will indicate that demand for safe-haven assets continues to decrease, although higher yields may provide some support to the American currency.

Technical Analysis

gbp usd july 27 2021

GBP/USD faced resistance near 1.3835 and pulled back closer to the 20 EMA which is located at 1.3800. In case GBP/USD settles below the 20 EMA, it will gain additional downside momentum and head towards the support at 1.3780.

A successful test of the support at 1.3780 will open the way to the test of the next support at 1.3745. In case GBP/USD declines below this level, it will move towards the next support at 1.3710.

On the upside, the nearest resistance level for GBP/USD is located at 1.3835. If GBP/USD gets above this level, it will continue its rebound and head towards the resistance at the 50 EMA at 1.3870.

A move above the 50 EMA will push GBP/USD towards the resistance at 1.3900. In case GBP/USD manages to settle above this level, it will move towards the resistance at 1.3920.

For a look at all of today’s economic events, check out our economic calendar.

Economic Data from the U.S to Put the Dollar in the Spotlight

Earlier in the Day:

It was a particularly quiet start to the day on the economic calendar this morning. There were no material stats to provide the markets with direction early in the day.

For the Majors

At the time of writing, the Japanese Yen was up by 0.13% to ¥110.250 against the U.S Dollar, while the Aussie Dollar down by 0.07% to $0.7380. The Kiwi Dollar was down by 0.14% to $0.6994.

The Day Ahead

For the EUR

It’s a particularly quiet day ahead on the economic data front. There are no material stats due out of the Eurozone to provide the EUR with direction.

The lack of stats will leave the EUR in the hands of market risk sentiment on the day, with COVID-19 remaining a key area of focus.

At the time of writing, the EUR was up by 0.01% to $1.1804.

For the Pound

It’s also particularly quiet day ahead on the economic calendar. There are no material stats to provide the Pound with direction.

At the time of writing, the Pound was up by 0.02% to $1.3821.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Durable and core durable goods and consumer sentiment figures are due out later today.

Expect core durable goods orders and consumer confidence figures to be the key drivers later in the day.

At the time of writing, the U.S Dollar Spot Index was down by 0.04% to 92.6140.

For the Loonie

It’s another quiet day on the economic calendar, with no major stats due out to provide the Loonie with direction.

The lack of stats will continue to leave the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was up by 0.04% to C$1.2546 against the U.S Dollar.

For a look at all of today’s economic events, check out our economic calendar.

Elliott Wave Cycles Point Major Forex Pairs Trade At Bottom

Summary

  • Major pairs trade at the bottom
  • EURUSD tries to complete an ending diagonal
  • GBPUSD bounced with impulsive wave structures
  • Aussie is also trying to find the support

First support is at 1.1760 followed by 1.1700. Divergence on the RSI also indicates a potential bounce, ideally once an ending diagonal is finished.

EURUSD 4h Elliott Wave Analysis Chart

Graphical user interface, chart, scatter chart Description automatically generated

GBPUSD is turning around after a nice five wave drop to 1.3569. We have seen a drop below April level for a short period of time which gives an impression that market has bottomed, possibly even completed flat correction. However, the most important is current intraday bullish impulse from the low which suggests more upside ahead, especially after a broken channel resistance line near 1.3800

GBPUSD 4h Elliott Wave Analysis Chart

Graphical user interface Description automatically generated

AUDUSD turned back to the lows again but it came down out of wave 4) running triangle pattern which suggest the final leg, probably wave 5) of C is unfolding, before a reversal. So, bounce and recovery may occur anytime soon, ideally in impulsive fashion which is needed to confirm a change in trend.

AUDUSD 4h Elliott Wave Analysis Chart

Graphical user interface, chart Description automatically generated

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD Price Forecast – British Pound Continues to Grind Higher

The British pound has rallied a bit during the course of the trading session on Monday, but as you can see, we have struggled a little bit as well. All things been equal, it looks as if we are trying to grind towards the 1.3850 handle, where we would also meet up with the 50 day EMA. At this point, the market is likely to see a lot of noisy behavior, and that noisy behavior could continue to cause a little bit of uncertainty, thereby pushing money into the US dollar. That being said, the 1.37 level underneath should be rather supportive due to the fact that it has been important in the past, and of course the 200 day EMA jumping into this area also offers very supportive behavior.

GBP/USD Video 27.07.21

To the upside, if we can break above the 50 day EMA, then it is likely we could go much higher, perhaps reaching towards the 1.40 handle. The 1.40 handle of course is a large, round, psychologically significant figure and an area that I think a lot of people would pay close attention to. With that being the case, I do think that it is only a matter of time before we need to get some type of certainty, which is something we desperately need at this point. The most recent selloff has been rather brutal, so keep that in mind but it certainly looks as if we are trying to recover heading into the New York session. If that is going to be the case, it looks like the Americans are going to go “risk on” yet again.

For a look at all of today’s economic events, check out our economic calendar.