Investors Trim Long Positions on Asian Currencies, Yuan Bets Halved

The 13 responses came in before the Federal Reserve’s policy meeting late on Wednesday where it stunned by signalling it might raise interest rates as early as 2023, a faster pace than initially assumed.

Emerging markets in the past have not fared well with the prospect of U.S. interest rate hikes, and with the Fed opening the door to an accelerated timetable to wean off pandemic-driven monetary stimulus, it could suck funds out of riskier assets and force Asia’s central banks to tighten quicker.

For now, investors remain largely bullish on emerging currencies in Asia, with long bets on the Taiwan dollar and Indonesian rupiah slightly raised from two weeks ago.

The central banks of both countries meet later on Thursday and are expected to leave policy rates unchanged at record lows, but may offer more commentary on their own timetable and economic outlook in light of the Fed’s hawkish shift.

Taiwan’s dollar has appreciated sharply since late March as the economy booms on the work-from-home trend fuelling global demand for tech.

Bank Indonesia’s governor has promised to keep rates low and liquidity in abundance until there is inflationary pressure, but also warned that local bond markets – susceptible to foreign flows – may be impacted by U.S. policy shifts.

Long bets on the rupiah were at their highest since February.

The Fed’s hawkish messaging sent the U.S. dollar to its highest level in around two months and resulted in declines across Asia’s currency space on Thursday, including a more than 0.5% drop by the rupiah.

Emerging markets “will face material headwinds over the next several months” and “will likely sell off in absolute terms and will underperform their DM (developed market) peers,” said Arthur Budaghyan, chief emerging markets strategist at BCA Research.

Broadly, long bets on China’s yuan were lowered after they hit a six-month high in the last poll. It follows the central bank stepping in to warn against speculative bets on the currency after its recent rally.

ING, in a note, said the yuan’s rise will slow from now on.

Bullish bets on the Singapore dollar, South Korean won and Philippine peso were all trimmed.

For the Indian rupee, a strong performer in May, long bets were also lowered.

The “significant hit to economic confidence in the second wave suggests the recovery is going to be delayed,” analysts at ING said, adding that it will cap any significant upside in the rupee.

The Asian currency positioning poll is focused on what market participants believe are the current market positions in nine Asian emerging market currencies: the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and Thai baht.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3. A score of plus 3 indicates the market is significantly long U.S. dollars.

The figures include positions held through non-deliverable forwards (NDFs).

(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Shailesh Kuber)

 

Economic Data Puts the EUR and the Greenback in the Spotlight

Earlier in the Day:

It was a busier start to the day on the economic calendar this morning. The Kiwi Dollar and the Aussie Dollar were in action this morning.

For the Kiwi Dollar

GDP numbers were in focus in the early hours.

In the 1st quarter, the economy grew by 1.6%, quarter-on-quarter, coming in ahead of a forecasted 0.5% expansion. In the 4th quarter of last year, the economy had contracted by 1.0%.

According to NZ Stats, the services industry, which accounts for two thirds of the economy, delivered the largest contribution.

The Kiwi Dollar moved from $0.70551 to $0.70753 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.61% to $0.7094.

For the Aussie Dollar

Employment figures were in focus.

In May, employment increased by 115.2k in May, reversing a 30.6k decline from April. Economists had forecast a more modest 30.0k rise.

Full employment increased by 97.5k following a 33.8k rise in April.

As a result of the pickup in hiring, the unemployment rate fell from 5.5% to 5.1%. Economists had forecast for the unemployment rate to hold steady at 5.5%.

According to the ABS,

  • The number of unemployed fell by 53k to 701k.
  • While the unemployment rate fell to 5.1%, the participation rate increased 0.3 percentage points to 66.2%. This was close to a historical high of 66.3% seen back in March 2021.

The Aussie Dollar moved from $0.76269 to $0.76290 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.32% to $0.7634.

Elsewhere

Through the early hours, the Japanese Yen was up by 0.05% to ¥110.65 against the U.S Dollar.

The Day Ahead

For the EUR

It’s a relatively quiet day ahead on the economic data front. Finalized inflation figures for the Eurozone are due out later today.

Stats in line with prelim numbers should deliver EUR support though the upside will likely be limited. The ECB continues to see inflation as transitory, removing near-term influence on monetary policy.

At the time of writing, the EUR was up by 0.03% to $1.9999.

For the Pound

It’s a particularly quiet day ahead on the economic calendar.

There are no material stats to provide the Pound with direction.

Updates on government plans to ease remaining restrictions will remain a key driver.

At the time of writing, the Pound was up by 0.04% to $1.3993.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include Philly FED Manufacturing numbers and the weekly jobless claim figures.

Barring particularly dire manufacturing numbers expect the weekly initial jobless claims to have the greatest impact on the Dollar.

Away from the economic calendar, FOMC member chatter and news from Capitol Hill will also need monitoring.

At the time of writing, the Dollar Spot Index was up by 0.29% to 91.396.

For the Loonie

It’s a relatively quiet day ahead on the economic data front. Foreign securities purchases for April are due out later today.

We don’t expect the numbers to influence, however, leaving the Loonie in the hands of market risk sentiment on the day.

At the time of writing, the Loonie was down by 0.01% to C$1.2278 against the U.S Dollar.

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

U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 91.500, Weakens Under 91.480

The U.S. Dollar is trading at its highest level against a basket of major currencies since April 19 on Thursday after the Federal Reserve brought forward its projections for the first post-pandemic interest rate hikes into 2023, citing an improved health situation and dropping a long-standing reference that the crisis was weighing on the economy.

At 01:45 GMT, September U.S. Dollar Index futures are trading 91.380, up 0.172 or +0.19%.

A majority of 11 Fed officials penciled in at least two quarter-point interest rate increases for 2023, even as officials in their statement pledged to keep policy supportive for now to encourage an ongoing jobs recovery.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier in the session when buyers took out the May 5 main top at 91.410. A trade through 89.795 will change the main trend to down.

The minor trend is also up. A trade through 90.310 will change the minor trend to down. This will shift momentum to the downside.

The new minor range is 89.545 to 91.470. Its retracement zone at 90.510 to 90.280 is the nearest support. This zone will move up as the index moves higher.

The short-term range is 93.430 to 89.545. Its retracement zone at 91.490 to 91.950 is the next upside target.

The major retracement zone at 91.850 to 92.495 is the primary upside target.

The key area to watch today is the resistance cluster at 91.490 to 91.495.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index on Thursday is likely to be determined by trader reaction to 91.490 to 91.495.

Bullish Scenario

A sustained move over 91.500 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to extend into the major 50% level at 91.850. Sellers could come in on the first test of this level. Taking it out could trigger an acceleration to the upside with 92.495 a near-term target.

Bearish Scenario

A sustained move under 91.480 will signal the presence of sellers. This won’t change the trend, but it could trigger a short-term break with the next potential downside target the minor retracement zone at 90.510 to 90.280.

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

Gold Tumbles on a More Hawkish Fed Demeanor

My view was that the Federal Reserve would maintain its dovish monetary policy, remaining extremely accommodative and continuing to keep interest rates near zero. The other camp believed that the Federal Reserve would take on a more hawkish tone and begin to talk about talking about tapering their asset allocations and raising interest rates. Unquestionably the latter camp got it right.

The statement released continued to acknowledge upticks in inflation raising their inflation target 3%. The statement confirmed that the Federal Reserve would continue their asset purchases of $120 billion per month. The commitment to maintain interest rates near zero through 2023 changed, causing the financial markets to sell off sharply. The biggest change occurred in the revised “dot plot” that caused gold to sell off sharply.

The Federal Reserve’s official mandate of continuing to purchase assets at the current level until the economic data indicates “substantial further progress” was confirmed. Also, the Fed mandate to continue to show extreme patients would lead to stable or higher gold prices was the exact opposite of today’s outcome.

Today’s statement and Chairman Powell’s press conference showed a more hawkish Fed demeanor. Although the Federal Reserve, for the most part, maintained its current monetary policy there was the modification to the timeline (dot plot) to raise interest rates that moved the financial markets lower.

The Fed’s dot plot chart showed 11 of 18 officials expect at least two rate hikes in 2023. In March, only seven expected one hike. Seven officials now see the first hike next year, up from four in March.

This was enough to set the tone of this month’s FOMC meeting as more hawkish than the last meeting. The outcome sent stocks lower and caused gold to tumble in a freefall.

As of 5:30 PM EST gold futures basis, the most active August 2021 contract is trading $43.80 lower and currently fixed at $1812.60, after trading to a low of $1804.40 and recovering slightly. Today’s dramatically lower pricing was due to a combination of higher yields in U.S. debt instruments, a strong U.S. dollar, and market participants selling pressure based upon the revised timeline of interest rate hikes.

gold june 16

The U.S. dollar gained 87 points (+0.97%) and is currently fixed at 91.38, and U.S. 10- year treasury notes yield rose to 1.58%.

For those who want more information, please use this link.

Wishing you, as always, good trading and good health,

Gary S. Wagner

FOMC Maintains Stimulus, Brings Rate Hike Forecast Forward to 2023

New projections saw a majority of 11 Fed officials pencil in at least two quarter-point interest rate increases for 2023, even as officials in a statement after their two-day policy meeting pledged to keep policy supportive for now to encourage an ongoing jobs recovery.

The Fed also made technical adjustments to prevent its benchmark interest rates from falling too low. It raised the interest rate it pays banks on reserves – the IOER – held at the U.S. central bank by five basis points, and also lifted to 0.05% from zero the rate it pays on overnight reverse repurchase agreements, used to set a floor on short-term interest rates.

In a question and answer period after the statement, Chairman Jerome Powell said the Fed will provide advanced notice before changing asset purchases and that considering tapering of these purchases at coming meetings would be appropriate, if progress allows.

MARKET REACTION

STOCKS: The S&P 500 extended losses to -0.83%%

BONDS: The 10-year U.S. Treasury note yield jumped to 1.5720% and the 2-year yield rose to 0.1991%

FOREX: The dollar index turned higher. It was last up 0.72%

COMMENTS

PETER TUZ, PRESIDENT, CHASE INVESTMENT COUNSEL, CHARLOTTESVILLE, VIRGINIA

“I’m not too surprised by the statement or the reaction. You would have had to have your head pretty buried in the sand not to pick up on inflation rising in many parts of the U.S. economy. So the Fed acknowledged that. The market’s reaction to the Fed acknowledging rising inflation is also not a surprise because now people are wondering if and when are you going to do something.”

STEVEN RICCHIUTO, U.S. CHIEF ECONOMIST, MIZUHO SECURITIES USA LLC, NEW YORK

“The policy statement is verbatim from what we had last time, essentially. And that is going to drive the post-meeting press conference, which is going to drive home the point that this Fed is going to stay the course, which is not what the market wanted. A lot of people wanted the Fed to say something more aggressive and the Fed took the least aggressive tact that they could. That’s the right decision for them to make.

“If the Fed had told you that they’re going to be aggressive and start tapering, yields would have continued to move down. The fact that they’re not doing that means that yields, people were a little bit too aggressive in terms of what was going to happen.

GENNADIY GOLDBERG, INTEREST RATE STRATEGIST, TD SECURITIES, NEW YORK

“The market reacted quite hawkishly and I think that was largely to the 2023 dot actually moving up even more than we had anticipated. We had expected it to move to one hike, it actually moved to two, so certainly a bit more optimism there. The statement was a little bit more upbeat but I would say there weren’t that many changes there that warranted this kind of reaction. So really the crux of the reaction really came down to the dot.”

“On the front-end it does look like the Fed just decided to move preemptively. They effectively raised IOER and RRP and that should help support the money market complex and just prevent any further flirtation with negative rates, at least for now. I think everyone was basically anticipating this hike at some point, the move today was basically done just to be preemptive.”

JASON WARE, CHIEF INVESTMENT OFFICER & CHIEF ECONOMIST, ALBION FINANCIAL GROUP, SALT LAKE CITY

“I think the market is taking it as a bit more hawkish in the initial reaction. In the coming days we will see what investors truly think. The reason traders are a bit skittish is that in some ways the results of the meeting, at least so far in the statement and the pulling forward of the timeline of the first rate hike, just that change is enough to make those that are ultra-short-term-focused re-position. But for longer-term investors, it is still extremely loose financial conditions and ultra-accommodative for equity investors.

“Another element is they increased their headline inflation expectations which demonstrates they are paying attention to the latest CPI reports. They brought that up. That’s a good thing. That helps underscore and solidify the Fed’s credibility.”

“I think there were an increasing number of market participants that expected a more robust conversation about when tapering might begin. Our expectation is we will probably see the stage being set for tapering in August at Jackson Hole.”

STEPHEN MASSOCCA, SENIOR VICE PRESIDENT, WEDBUSH SECURITIES, SAN FRANCISCO

“Basically they are living off this theory that all these inflationary numbers are the result of a disorganized economy exiting Covid and that once the economy reorganizes price pressure will return and inflation will vanish, that is the argument they are making. I actually kind of think it is a good one. Before they react I think waiting for a few months is prudent and I think the market understands that.

“The one guy remaining in power, Powell, knows what he is doing. And if you scream PPI, look at that number, it is just because the economy is so disorganized now coming out of Covid that once it organizes that will be a mirage that goes away. It really does make a lot of sense. If it doesn’t happen that is going to be a real problem for the market. But right now that argument makes sense and everybody is buying it.”

GUY LEBAS, CHIEF FIXED INCOME STRATEGIST, JANNEY MONTGOMERY SCOTT, PHILADELPHIA

“The IOER hike is really about relieving some of the strains in the front-end of the curve related to a tsunami of cash in the financial system. Banks are overreserved, money market funds are finding it hard to get positive yield anywhere and so it addresses some of those problems. But it will also have the effect of pulling yields out the curve a little bit higher, probably out to about three years, because the relative value of a two-year or three year note is in part dependent on what a bank can get in overnight rates, which is now somewhat higher.”

“I don’t think that there’s a ton of information at this stage conveyed in the dots because you’re measuring a median forecast at a time when economic variability is massive.  It’s also a conditional forecast and I think the conditions on which the forecast is based are at best volatile and somewhat unlikely.”

KARL SCHAMOTTA, DIRECTOR OF GLOBAL PRODUCT AND MARKET STRATEGY, CAMBRIDGE GLOBAL PAYMENTS, TORONTO

“We may not be seeing a taper tantrum but we are seeing a hissy fit on currency markets. The interesting thing is that the Fed has gone beyond simply acknowledging that inflation is rising and that the U.S. economy has a lot of momentum, and it has essentially shifted to a much more hawkish stance in this set of projections.”

JACK ABLIN, CHIEF INVESTMENT OFFICER, CRESSET WEALTH ADVISORS

“I think this is pretty close to what the market wanted. The market wanted the Fed to tell investors that there is nothing to see here, keep moving, nothing going on in the economy or inflation, and we’re just going to stay aggressively easy.”

“The Fed is not in complete denial, the way the market would have liked. They do recognize that they will have to respond sometime in the future. But I will call that a tilt – not a change in direction. The Fed is still maintaining its head-in-the-sand policy.”

RYAN DETRICK, SENIOR MARKET STRATEGIST, LPL FINANCIAL, CHARLOTTE, NORTH CAROLINA

“The market’s a little lower but you see that on Fed days.

“There was a big jump in (the Fed’s) inflation expectations, a point above March projections, and with the likelihood of first rate hike now in 2023, there was a knee jerk reaction and the market is trying to digest it.

“But the market was expecting this. The market is having typical Fed day volatility.

“It’s like you get all worked up and excited when the Fed has an announcement and the market sleeps on it overnight and go the other way the very next day.

“They upped the GDP forecast, we’ve got a stronger economy and stronger inflation. Those shouldn’t be surprises to anyone.”

“The action in the bond market is pretty calm. The stock market is having typically volatile Fed day shake-out but the bond market seems to be taking it in stride, and that’s a key takeaway.

“There’s no sign of tapering, but we’ll see with the Q&A.”

FRANCES DONALD, GLOBAL CHIEF ECONOMIST, MANULIFE INVESTMENT MANAGEMENT, TORONTO

“The dot plot is now showing two rate hikes by 2023. That’s enough of a hawkish surprise for the bond market and its getting all of the attention.”

“What’s interesting here is that the Federal Reserve has increased its estimate of when the first rate hikes will come but not materially changed its 2022 and 2023 projections for growth and inflation. What that tells us is that while the outlook hasn’t dramatically changed it seems that the Fed’s confidence in returning to a normal environment has.”

“There has not been a material change of tone. This statement has only a few adjustments.

“The market is reacting to a few strands of information in the dot plot. Now it will be Powell’s time to try to dissuade the market from reading too much into the dot plot.”

TOM MARTIN, SENIOR PORTFOLIO MANAGER, GLOBALT INVESTMENTS, ATLANTA

“The market wants to see the Fed communicate that it’s going to provide the accommodation that the country will need while being on the lookout for inflation, and to me, what you got with this announcement is what the market wanted.

“On average, the market does want the Fed to be measured, which they absolutely were with this release.

“I don’t see that the movements in the S&P and Nasdaq mean much.”

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

(Compiled by the U.S. Finance & Markets Breaking News team)

 

Dollar Jumps After Fed Pulls Interest Rate Hikes Into 2023

The dollar index, which tracks the greenback against six major currencies, was up 0.63% at 91.103, its highest since May 6.

A majority of 11 Fed officials penciled in at least two quarter-point interest rate increases for 2023, even as officials in their statement pledged to keep policy supportive for now to encourage an ongoing jobs recovery.

The projections showed the outlook for inflation jumping this year, though the price increases were still described as “transitory.” Overall economic growth is expected to hit 7%.

“The interesting thing is that the Fed has gone beyond simply acknowledging that inflation is rising and that the U.S. economy has a lot of momentum, and it has essentially shifted to a much more hawkish stance in this set of projections,” said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

Against the Japanese yen, the dollar rose 0.39% to 110.49 yen, its highest since April 6.

The dollar, which slumped through much of 2020, staged a rebound earlier this year, but that relief rally appeared to run out of steam through May as investors remained convinced that the Fed will keep interest rates lower for longer as it seeks to support the economy.

While the Fed’s new language does not mean a change in policy is imminent it does provide more support for the greenback, analysts said.

“I think we’re back to talking about a mild rally in the U.S. dollar and the data becoming very important over the summer period prior to Jackson Hole and September’s meeting,” said Simon Harvey, senior FX market analyst at Monex Europe.

Risk-sensitive currencies logged a sharp reversal following the Fed announcement, with the New Zealand dollar down 0.98% at $0.7049 and the Australian dollar – which is seen as a proxy for risk appetite – up 0.95% at $0.7612.

Sterling, which had strengthened against the dollar on Wednesday after data showed British inflation unexpectedly jumped above the Bank of England’s 2% target in May, gave up those gains to trade down 0.49%.

Meanwhile, bitcoin’s recent rally appeared to run out of steam, as the world’s largest cryptocurrency fell 4.34% to $38,430.03.

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

(Reporting by Saqib Iqbal Ahmed in New York and Elizabeth Howcroft in London; Editing by Alison Williams, Will Dunham and Alex Richardson)

USD/INR: Rupee Falls for Seventh Straight Session Ahead of Fed Decision

The Indian rupee dipped against the U.S. dollar for the seventh straight day on Wednesday ahead of the conclusion to the Federal Reserve’s monetary policy decision.

The USD/INR rose to an intraday high of 73.3890 – hit its weakest since May 14 – against the U.S. currency from Tuesday’s close of 73.35. The rupee has lost 88 paise so far this month and weakened 60 paise in the seven trading sessions.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, fell 0.02% to 90.515. The index is expected to rise further after the relatively impressive US consumer price index data, which rose by 5% year-on-year in May– the highest since 2008.

The rupee was also under some pressure ahead of the Federal Reserve monetary policy meeting scheduled this week. Traders remain cautious ahead of the policy decision as any unexpected hawkish surprise would lift the greenback.

“Sentiments remained frail as the recent recovery in the US, the world’s largest economy, and upbeat inflation data raised hopes over a slightly hawkish approach and potential interest rate hike. Bets on shift in the monetary stance by the US Central Bank gave strengthen to the US currency. Strong demand for the dollar by importers and banks amid soaring Crude Oil prices undermined the domestic currency,” noted Manish Pargi, currency analyst at Angel Broking.

The benchmark BSE Sensex index ended down 271.07 points or 0.51% lower at 52,501.98, while the broader NSE Nifty fell 101.70 points or 0.64% to 15,767.55.

On the other hand, global oil benchmark Brent futures rose 0.27% to $74.19 per barrel. However, foreign institutional investors were net buyers in the capital market on Tuesday as they offloaded shares worth Rs 633.69 crore, as per provisional data.

The Indian rupee was one of Asia’s best performers, having risen 2.3% in May, but lost ground last two weeks. The USD/INR is expected to rise about 1% to INR 74.00 against the U.S. dollar rate over the coming year.

USD/CAD Daily Forecast – Test Of Support At 1.2170

Canadian Dollar Gains Ground Against U.S. Dollar

USD/CAD is currently trying to get back below the support at 1.2170 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has made several attempts to settle above the resistance at the 50 EMA at 90.60 in recent trading sessions, but these attempts yielded no results. In case the U.S. Dollar Index gets above this level, it will head towards the resistance at 90.90 which will be bullish for USD/CAD.

Today, U.S. reported that Building Permits declined by 3% month-over-month in May while Housing Starts grew by 3.6%. The foreign exchange market has mostly ignored these economic reports as traders remained focused on the upcoming Fed Interest Rate Decision.

The Fed will soon reveal its current view of the economic situation and share its views about inflation. Recent inflation reports from various countries, including U.S., indicated that prices are rising faster than expected.

Canada has just reported that Inflation Rate increased by 3.6% year-over-year in May compared to analyst consensus which called for growth of 3.5%. Core Inflation Rate increased by 2.8% year-over-year compared to analyst consensus of 2.4%.

If the Fed highlights inflation risks, USD/CAD will get more support. If the Fed stays dovish, the U.S. dollar may find itself under more pressure.

Technical Analysis

usd cad june 14 2021

USD to CAD failed to settle above the resistance at the 50 EMA near 1.2200 and pulled back towards the support at 1.2170.

In case USD to CAD manages to settle below this support level, it will head towards the next support which is located at the 20 EMA at 1.2130. A successful test of the support at the 20 EMA will open the way to the test of the support at 1.2100.

On the upside, USD to CAD needs to settle above the 50 EMA to continue its upside move. The next resistance level is located at 1.2250. If USD to CAD gets above this level, it will head towards the resistance at 1.2270. A move above this level will push USD to CAD towards the resistance at 1.2300.

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

Silver Price Daily Forecast – Silver Remains Range-Bound While Traders Wait For Fed Decision

Silver Stays In The Previous Trading Range

Silver is currently trying to get back above $27.75 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index is testing the nearest resistance level at the 50 EMA at 90.60. If this test is successful, the U.S. Dollar Index will gain additional upside momentum which will be bearish for silver and gold price today. However, it remains to be seen whether markets are ready for any moves ahead of the Fed Interest Rate Decision.

Gold has recently made an attempt to get below $1850 but failed to develop sufficient downside momentum and moved closer to $1865. The nearest significant resistance level for gold is located at the 20 EMA at $1875. In case gold gets to the test of this level, silver will get more support.

Gold/silver ratio has managed to settle below the 67 level and is trying to get to the test of the support at 66.50. A move below 66.50 will be bullish for silver.

Technical Analysis

silver june 16 2021

Silver continues to trade in the range between the support at $27.50 and the resistance at $28.30, and it looks that it will need additional catalysts to get out of this range.

RSI is in the moderate territory and there is plenty of room to gain momentum, but silver failed to get any momentum in recent weeks.

Currently, silver is trying to get back above $27.75. If this attempt is successful, it will get to the test of the next resistance level which is located at $28.00. A move above this level will push silver towards the resistance at $28.30.

On the support side, a move below the key support level at $27.50 will open the way to the test of the next support which is located at the 50 EMA at $27.20. In case silver manages to get below the 50 EMA, it will head towards the support at $27.00. A move below this level will push silver towards the support at $26.65.

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

EUR/USD Daily Forecast – U.S. Dollar Is Flat Ahead Of Fed Interest Rate Decision

EUR/USD Stays Near Resistance At 1.2130

EUR/USD is currently testing the resistance at 1.2130 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index did not manage to settle above the resistance at the 50 EMA near 90.60 and pulled back below 90.50. If the U.S. Dollar Index settles below 90.50, it will head towards the support at 90.30 which will be bullish for EUR/USD.

Today, foreign exchange market traders will stay focused on the Fed Interest Rate Decision. The rate is expected to stay unchanged, and the market will pay attention to Fed’s commentary and economic projections. Any signs that Fed is worried about rising inflation could provide support to the American currency. However, it remains to be seen whether Fed is ready to signal that inflation is a problem before it sees additional data.

Traders will also have a chance to take a look at Building Permits and Housing Starts reports from the U.S. Analysts expect that Buidling Permits increased by 0.9% month-over-month in May while Housing Starts grew by 2.5%.

Technical Analysis

eur usd june 16 2021

EUR/USD is currently trying to settle above the resistance level at 1.2130. RSI remains in the moderate territory and there is plenty of room to gain upside momentum, but it remains to be seen whether traders are ready for any notable moves ahead of the Fed Interest Rate Decision.

In case EUR/USD manages to settle above 1.2130, it will head towards the next resistance level which is located near the 20 EMA at 1.2155.  A successful test of this resistance level will push EUR/USD towards the next resistance at 1.2175. In case EUR/USD gets above 1.2175, it will head towards the resistance at 1.2200.

On the support side, the nearest support level for EUR/USD is located near the 50 EMA at 1.2115. If EUR/USD manages to settle below 1.2115, it will move towards the next support level at 1.2080. A move below the support at 1.2080 will push EUR/USD towards the support level at 1.2060.

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

GBP/USD Daily Forecast – Support At 1.4080 Stays Strong

British Pound Gains Some Ground Against U.S. Dollar

GBP/USD received support at 1.4080 and is trying to settle back above 1.4100 while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index is currenty trying to settle above the nearest resistance level which is located at the 50 EMA near 90.60. This resistance level has already been tested several times and proved its strength. If the U.S. Dollar Index manages to settle above 90.60, it will gain additional upside momentum and head towards the next resistance at 90.90 which will be bearish for GBP/USD.

UK has just released inflation data for May. Inflation Rate increased by 0.6% month-over-month compared to analyst consensus which called for growth of 0.3%. On a year-over-year basis, Inflation Rate grew by 2.1% compared to analyst consensus of 1.8%. Importantly, Core Inflation Rate increased by 2% year-over-year compared to analyst consensus of 1.5%. The rapid increase of Core Inflation Rate shows that pricing pressure is increasing.

Today, foreign exchange market traders will wait for the release of Fed Interest Rate Decision and the subsequent commentary. The key question is whether Fed will react to the latest inflation news. In case Fed is less dovish than expected, U.S. dollar may get more support.

Technical Analysis

gbp usd june 16 2021

GBP/USD is currently trying to settle above 1.4100. In case this attempt is successful, GBP/USD will move towards the resistance at the 20 EMA at 1.4125.

A move above the 20 EMA will open the way to the test of the resistance at 1.4150. If GBP/USD settles above this level, it will head towards the next resistance at 1.4180.

On the support side, the nearest support level for GBP/USD is located at 1.4080. A successful test of this level will push GBP/USD towards the support at the 50 EMA at 1.4065.

If GBP/USD settles below the 50 EMA, it will move towards the support at 1.4050. In case GBP/USD gets below 1.4050, it will head towards the support at 1.4020.

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

U.S. Dollar Index (DX) Futures Technical Analysis – Strengthens Over 90.700, Weakens Under 90.470

The U.S. Dollar is trading flat, but hovering near a one-month high against a basket of currencies on Wednesday as investors tried to gauge if the Federal Reserve might alter the language on its stimulus following a recent jump in U.S. inflation.

The Fed is widely expected to acknowledge the first conversations among its policymakers about when and how fast to pare back the massive bond-buying program launched in 2020 when it concludes a policy meeting later in the day at 18:00 GMT.

At 04:09 GMT, June U.S. Dollar Index futures are trading 90.505, up 0.003 or +0.00%.

Although most investors think the Fed will refrain from any hints of starting tapering its stimulus in the near future, the U.S. Dollar could rally if the central bank drops any hint that tapering will be brought forward or rate hikes are going to be looked at sooner.

If the Fed continues to reiterate that inflation is transitory and that it will refrain from any changes in policy until the labor market improves, today’s Fed announcements could turn into a non-event.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 90.640 will reaffirm the uptrend. A move through 89.795 will change the main trend to down.

The minor trend is also up. A trade through 90.310 will change the minor trend to down. This will also shift momentum to the downside.

The minor range is 89.545 to 90.640. Its retracement zone at 90.095 to 89.965 is potential support.

The short-term range is 91.410 to 89.545. Its retracement zone at 90.480 to 90.700 is currently being tested. Trader reaction to this area could determine the near-term tone of the market.

The main range is 93.430 to 89.545. If there is a breakout over 90.700 then its 50% level at 91.490 will become the next upside target.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index on Wednesday is likely to be determined by trader reaction to the short-term 50% level at 90.480.

Bullish Scenario

A sustained move over 90.480 will indicate the presence of buyers. This could trigger a quick surge into 90.640 to 90.700.

Taking out 90.700 will indicate the buying is getting stronger. This could extend the rally into the next main top at 90.910. This price is a potential trigger point for an acceleration to the upside with the next major target a potential resistance cluster at 91.410 to 91.490.

Bearish Scenario

A sustained move under 90.480 will signal the presence of sellers. This could trigger an acceleration to the downside with 90.095 to 89.965 the next likely target. Buyers could come in on the first test of this area, but if it fails then look for the selling to possibly extend into the main bottom at 89.795.

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

Economic Data from China and the UK to Distract the Markets Ahead of the FED

Earlier in the Day:

It was a busier start to the day on the economic calendar this morning. The Kiwi Dollar and the Japanese Yen were in action this morning, with economic data from China in focus later this morning.

For the Kiwi Dollar

Current account figures were out in the early hours.

In the 1st quarter, the current account deficit widened from NZ$2.70bn to NZ$2.90bn, quarter-on-quarter. Economists had forecast a narrowing to NZ$2.23bn.

Year-on-year, the current account deficit widened from NZ$2.55bn to NZ$7.24bn. Economists had forecast a widening to NZ$6.68bn.

The Kiwi Dollar moved from $0.71205 to $0.71215 upon release of the figures. At the time of writing, the Kiwi Dollar was up by 0.13% to $0.7130.

For the Japanese Yen

Trade data and core machinery orders were in focus this morning.

In April, core machinery orders increased by 0.6%, month-on-month, following a 3.7% rise in March. Economists had forecast a 2.7% rise.

Year-on-year, core machinery orders were up by 6.5% versus a forecasted 8.0% increase. In March, core machinery orders had been down by 2.0% year-on-year.

More significantly, however, Japan’s trade balance slumped from a ¥253.1bn surplus to a ¥187.1bn deficit in May. Economists had forecast a deficit of ¥91.2bn. Exports rose by 49.6%, year-on-year, versus a forecasted 51.3% rise. In April, exports had been up by 38.0%.

According to figures released by the  Ministry of Finance,

  • Exports to China jumped by 23.6%, with exports to Australia and NZ surging by 115.3%.
  • Exports to the U.S surged by 87.9%, with exports to Western Europe up 69.9%.
  • Year-on-year, imports increased by 27.9% in May, which was up from 12.8% in April.

The Japanese Yen moved from ¥110.088 to ¥110.093 upon release of the figures. Through the early hours, the Japanese Yen was down by 0.02% to ¥110.10 against the U.S Dollar.

Out of China

Industrial production, retail sales, fixed asset investment, and unemployment figures are due out. Expect the industrial production and retail sales figures to garner the greatest interest.

At the time of writing, the Aussie Dollar was up by 0.03% to $0.7689.

The Day Ahead

For the EUR

It’s a quiet day ahead on the economic data front. 1st quarter wage growth figures for the Eurozone are due out later today.

Barring particularly dire numbers, however, we don’t expect the numbers to have too much impact on the EUR.

The markets will be looking ahead to the FED’s monetary policy decision and projections late in the day. With the ECB doves in control for now, we could see monetary policy divergence weigh on the EUR.

At the time of writing, the EUR was down by 0.03% to $1.2122.

For the Pound

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

Inflation figures for May are due out later this morning. With little else for the markets to consider, expect the numbers to influence.

A delay in the full reopening of the UK may have eased some pressure on the BoE. A marked pickup in inflationary pressure could fuel speculation of a near-term move, however.

At the time of writing, the Pound was down by 0.02% to $1.4081.

Across the Pond

It’s a relatively busy day ahead on the economic calendar. Key stats include building permit and housing start figures from the housing sector. Import and export price index figures are also due out.

With the FED in action later in the day, however, don’t expect the numbers to have much impact on the Greenback.

Near-term direction will be hinged on FED chatter vis-à-vis any tapering and the latest projections… How FED Chair Powell delivers any shift in stance will be key during the press conference.

At the time of writing, the Dollar Spot Index was up by 0.01% to 90.548.

For the Loonie

It’s a busy day ahead on the economic data front. Inflation figures for May are due out along with wholesale sales figures for April.

Expect the inflation figures to have the greatest influence on the Loonie.

Crude oil inventory numbers will also provide direction along with this morning’s economic data from China.

At the time of writing, the Loonie was flat at C$1.2184 against the U.S Dollar.

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

U.S. Corporate Bond Yield Spreads Unlikely to Bet ‘Meaningfully’ Tighter – Amundi

“Spreads can go tighter, though not meaningfully tighter,” Ken Monaghan, co-head of high yield at Amundi U.S. told the Reuters Global Markets Forum on Tuesday.

The additional yield, or the yield spread, that investors demand for holding riskier corporate bonds over U.S. Treasuries fell to near its tightest level since the Great Recession due to investors buying higher yielding assets.

Amundi’s Monaghan pointed to BB-rated bonds comprising a greater share of the high yield market as a primary reason why spreads are unlikely to tighten significantly.

He said the bonds are now nearly 55% of the market compared to about 45% a decade ago and pointed to demand by “crossover investors” seeking returns higher than those available in investment grade corporate credit and U.S. government debt markets.

“If nominal rates were to move meaningfully higher on an eventual Federal Reserve move, would those … who have ‘vacationed’ in high yield return to their home markets? Probably some would,” Monaghan said.

The Fed began unwinding its corporate bond portfolio last week, with markets focused on when it will taper its hefty asset buying program.

Monaghan said the Fed’s moves have had a less dramatic impact on high yield debt, with even a hawkish tone from the central bank not pushing up spreads significantly.

While many corporate defaults were expected due to the COVID-19 pandemic, Monaghan said default levels remained below expectations, thanks mainly to the Fed’s backstop and numerous “rescue” programs.

Despite current “risk-on” sentiment, Amundi’s Monaghan said aggressive borrowing seen in previous cycles has not materialized, with most companies focused on refinancing existing debt.

(Reporting by Lisa Pauline Mattackal and Aaron Saldanha in Bengaluru; Editing by Arun Koyyur)

 

Wall Street Slips as Fed Mulls Policy, Economic Data Disappoints

With the Fed kicking off a two-day policy meeting today, investors are balancing the central bank’s insistence inflation will be transitory with fresh data showing prices growing faster than expected.

In separate reports, U.S. economic data showed an acceleration in producer prices in May as supply chains try to keep up with surging demand with the pandemic easing, while retail sales dropped more than expected as consumers turned their attention back to service industries.

The readings have investors wondering if the Fed may come out of its meeting Wednesday with any indication it is tweaking its go-slow approach.

“Rising prices are expected to subside as the supply side of the economy recovers to meet demand and inventories are restocked, but accomplishing that will not be as easy as flipping a switch,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “It will take some time for that gap to be filled. In the meantime, upward pressure on prices are likely to continue.”

The central bank is not expected to announce any plans to ease back on its bond purchases until August, but investors are looking for any indication the Fed has begun discussing such an exit. Nearly 60% of economists in a Reuters poll expect a taper announcement will come in the next quarter, despite a patchy recovery in the job market.

“To a large extent, high US inflation has to do with the massive US fiscal stimulus. Inflation has been increasing in most of G10, but the US clearly stands out,” wrote Bank of America Securities analysts in a note. “Assuming that some of the recent increase in inflation is indeed sustained, we would argue that the Fed will react to it, supporting the USD later this year.”

After markets reached new highs in Europe, U.S. markets eased following the economic reports. U.S. Treasury yields also dipped, while the dollar ticked up.

The MSCI world equity index, which tracks shares in 45 nations, fell 0.86 points or 0.12%.

The Dow Jones Industrial Average was down 114.95 points, or 0.33% in afternoon trading, while the S&P 500 lost 9 points, or 0.21%, and the Nasdaq Composite dropped 89.10 points, or 0.63%.

OIL GAINS

Oil prices hit their highest levels since 2019 during trading Tuesday on an expected demand surge that should accompany increased travel as pandemic restrictions ease.

Brent crude was last up $1.09, or up 1.5%, at $73.95 a barrel. U.S. crude was last up $1.16, or 1.64%, at $72.04 per barrel. It previously hit a session high of $72.16 a barrel, the highest level seen since October 2018.

In currency markets, the dollar hit a one-month high against a basket of currencies Tuesday on the back of the fresh economic data. The dollar index, which measures the greenback against a basket of six currencies, was 0.06% higher at 90.544, after rising as high as 90.677, its highest since May 14.

Spot gold prices fell $9.585 or 0.51%, to $1,856.41 an ounce, while U.S. gold futures were down 0.4% at $1,857.60.

Benchmark 10-year yields were 1.4939%, slightly lower than Monday, when they rebounded from Friday’s three-month low.

(Reporting Pete Schroeder in Washington; Editing by Kim Coghill, Alex Richardson, Barbara Lewis and Peter Graff)

 

USD/INR: Rupee Extends Losses for Sixth Straight Session, Hits One-Month Low

The Indian rupee fell to a one-month low against the U.S. dollar on Tuesday, depreciating for the sixth straight day as rising oil prices weighed on the currency despite strength in domestic equity markets.

The USD/INR to an intraday high of 73.3730 – hit its weakest since May 14 – against the U.S. currency from the Monday’s close of 73.18. The rupee has lost 86 paise so far this month and weakened 51 paise in the six trading sessions.

The dollar index, a measurement of the dollar’s value relative to six foreign currencies, rose 0.07% to 90.587. The index is expected to rise further after the relatively impressive US consumer price index data, which rose by 5% year-on-year – the highest since 2008.

The rupee was also under some pressure ahead of the Federal Reserve monetary policy meeting scheduled this week. Traders remain cautious ahead of the policy decision as any unexpected hawkish surprise would lift the greenback.

The Indian equity market witnessed a strong influx of retail investors, pushing the benchmark BSE Sensex index ended up 221.52 points, or 0.42% higher at 52,773.05, while the broader NSE Nifty advanced 57.40 points or 0.36% to close at 15,869.25.

On the other hand, global oil benchmark Brent futures rose 0.43% to $73.17 per barrel. However, foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 503.51 crore, as per provisional data.

The Indian rupee was one of Asia’s best performers, having risen 2.3% in May, but lost ground last two week. The USD/INR is expected to rise over 1% to INR 74.00 against the U.S. dollar rate over the coming year.

Indian Rupee is expected to trade with negative bias amid strong dollar, surge in crude oil prices and disappointing macroeconomic data. India CPI data showed inflation accelerated by 6.3% in May 2021 compared to 4.23% in April 2021. Inflation breached the Reserve Bank of India’s target range of 2-6% for first time in 5 months. Further, market participants fear that the second wave of covid-19 infection in India has dampened the expectation of quick economic recovery,” noted analysts at Sharekhan BNP Paribas.

“Furthermore, traders will remain cautious ahead of US FOMC meeting outcome and economic projections. However, sharp fall may be prevented as number of COVID-19 cases in India continued to decline. India reported daily new covid-19 cases below 1 lakh for 7th consecutive day. USDINR spot expected to trade in a range between 72.90 on lower side to 73.40 on higher side with an upward trend.”

USD/CAD Daily Forecast – Canadian Dollar Declines As Commodities Move Lower

Canadian Dollar Is Under Pressure Against U.S. Dollar

USD/CAD is currently trying to settle above the resistance at the 50 EMA at 1.2200 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance at the 50 EMA at 90.60. If the U.S. Dollar Index gets above this level, it will head towards the resistance at 90.90 which will be bullish for USD/CAD.

Today, foreign exchange market traders focused on the economic data from the U.S. Retail Sales declined by 1.3% month-over-month in May compared to analyst consensus which called for a decline of 0.8%. Industrial Production increased by 0.8% month-over-month in May compared to analyst consensus of 0.6%, while Manufacturing Production grew by 0.9%.

Producer Prices data exceeded expectations in both U.S. and Canada, but it looks that these reports had little impact on currency dynamics as traders remained focused on Fed Interest Rate Decision and the subsequent commentary which will be released on Wednesday.

Meanwhile, Canadian dollar found itself under pressure together with other commodity-related currencies due to the sell-off in commodity markets. Oil moved higher today, but the sell-off in commodities like copper was too strong, so traders ignored positive developments in oil markets.

Technical Analysis

usd cad june 15 2021

USD to CAD managed to settle above the resistance at 1.2170 and is trying to settle above the next resistance level which is located at the 50 EMA at 1.2200.

In case USD to CAD gets above this level, it will head towards the next resistance at 1.2250. A successful test of the resistance at 1.2250 will push USD to CAD towards the next resistance at 1.2270. In case USD to CAD settles above 1.2270, it will head towards the resistance at 1.2300.

On the support side, the previous resistance level at 1.2170 will serve as the first support level for USD to CAD. A move below this level will push USD to CAD towards the next support at 1.2130. The 20 EMA is located in the nearby so USD to CAD will likely get material support near 1.2130.

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

Silver Price Daily Forecast – Support At $27.50 In Sight

Silver Is Under Pressure

Silver has recently made an attempt to get to the test of the major support at $27.50 while the U.S. dollar remained flat against a broad basket of currencies.

The 50 EMA at 90.60 remains a key resistance level for the U.S. Dollar Index. The U.S. Dollar Index has already made several attempts to settle above this level in recent trading sessions but failed to develop sufficient upside momentum. If the U.S. Dollar Index gets above this level, it will head towards 90.90 which will be bearish for silver and gold price today.

Meanwhile, gold is trying to settle back above $1865. If this attempt is successful, gold will move towards the 20 EMA at $1875 which will be bullish for silver.

Gold/silver ratio made an attempt to settle above 67.50. In case gold/silver ratio manages to settle above this level, it will head towards the 20 EMA at 67.70 which will be bearish for silver.

Technical Analysis

silver june 15 2021

Silver is currently moving towards the key support level at $27.50. Silver made many attempts to settle below this level in recent weeks, but this support remained strong.

In case silver manages to settle below $27.50, it will gain additional downside momentum and head towards the support at the 50 EMA at $27.20. RSI is in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge.

If silver settles below the 50 EMA at $27.20, it will head towards the next support at $27.00. A successful test of this level will push silver towards the support at $26.65.

On the upside, silver needs to settle above the resistance at $27.75 to have a chance to develop upside momentum in the near term. If silver gets above this level, it will move towards the next resistance which has recently emerged at $28.00. A move above the resistance at $28.00 will open the way to the test of the resistance at $28.30.

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

EUR/USD Daily Forecast – U.S. Dollar Continues To Lose Ground Against Euro

Euro Is Moving Higher Against U.S. Dollar

EUR/USD is currently trying to settle back above the resistance at 1.2130 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below 90.50 and is moving towards the support level at 90.30. In case the U.S. Dollar Index gets to the test of the support at 90.30, EUR/USD will get more support.

Today, foreign exchange market traders had a chance to take a look at the final reading of inflation report from Germany. Inflation Rate increased by 0.5% month-over-month in May. On a year-over-year basis, Inflation Rate grew by 2.5%.

Germany’s inflation report was in line with the analyst consensus, and traders’ focus will soon shift to economic data from the U.S. Producer Prices are projected to grow by 6.3% on a year-over-year basis, but it remains to be seen whether markets will worry about higher inflation.

The yield of 10-year Treasuries has recently made an attempt to settle above 1.50% but failed to gain sufficient upside momentum and pulled back. A move above 1.50% will open the way to the test of the 20 EMA at 1.55% which will be bullish for the U.S. dollar, but traders will likely wait for the Fed Interest Rate Decision on Wednesday before making big moves.

Technical Analysis

eur usd june 15 2021

EUR/USD is currently testing the resistance at 1.2130. In case this test is successful, EUR/USD will move towards the next resistance level which is located at the 20 EMA at 1.2155.

A move above the 20 EMA will push EUR/USD towards the resistance at 1.2175. If EUR/USD manages to settle above this level, it will head towards the resistance at 1.2200.

On the support side, EUR/USD needs to get back below 1.2130 to have a chance to develop downside momentum in the near term. The next support level is located at 1.2115. It should be noted that the 50 EMA is in the nearby, so EUR/USD may get material support in the 1.2115 – 1.2130 range. If EUR/USD declines below the support at 1.2115, it will move towards the next support level at 1.2080.

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

GBP/USD Daily Forecast – British Pound Stays In The Previous Trading Range

British Pound Attempts To Rebound Against U.S. Dollar

GBP/USD is currently trying to get back above the 20 EMA near 1.4130 while the U.S. dollar is mostly flat against a broad basket of currencies.

The U.S. Dollar Index has recently made another attempt to settle above the 50 EMA at 90.60 but failed to develop sufficient upside momentum and declined towards 90.50. In case the U.S. Dollar Index manages to settle above the 50 EMA, it will move towards the resistance at 90.90 which will be bearish for GBP/USD.

UK has just released Claimant Count Change report for May which indicated that the number of people claiming unemployment benefits declined by 92,600 compared to analyst consensus which called for a decline of 62,000. Unemployment Rate report showed that Unemployment Rate decreased from 4.8% in March to 4.7% in May, in line with the analyst consensus.

Today, foreign exchange market traders will also have a chance to take a look at economic reports from the U.S. Analysts expect that Retail Sales declined by 0.7% month-over-month in May. Producer Prices are expected to grow by 0.6% on a month-over-month basis. Industrial Production is projected to increase by 0.6% month-over-month in May, while Manufacturing Production is expected to grow by 0.5%.

It remains to be seen whether these reports will trigger big moves as traders may stay focused on Fed Interest Rate Decision which will be released on Wednesday.

Technical Analysis

gbp usd june 15 2021

GBP/USD failed to settle below the support at 1.4080 and rebounded towards the 20 EMA at 1.4130. In case GBP/USD manages to settle above the 20 EMA, it will move towards the next resistance at 1.4150.

A successful test of the resistance at 1.4150 will open the way to the test of the resistance at 1.4180. In case GBP/USD gets above this level, it will move towards the next resistance at 1.4200.

On the support side, the nearest support level for GBP/USD is located at 1.4100. If GBP/USD gets below this level, it will head towards the next support at 1.4080. A move below this level will push GBP/USD towards the 50 EMA at 1.4065. In case GBP/USD declines below the 50 EMA, it will head towards the support at 1.4050.

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