Last week, Federal Reserve Chair Powell gave us a clear signal that the Fed will cut interest rates later this month.
In Powell’s testimony, he said that since Fed officials met last month, “uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.” Powell’s dovish testimony started to price in heftier easing at the Fed’s next policy meeting on July 30-31.
On the other hand, the U.S. inflation data came out stronger-than-expected last Thursday. The U.S. core CPI, which excludes volatile food and energy prices, ticked up to 2.1% in the same period to beat the market expectation of 2%.
Looking ahead, the Commerce Department will release data on retail sales for June on Tuesday. The consensus forecast is that the report will show retail sales rose 0.2%, following a rise of 0.5% in May. Excluding the automobile sector, sales are expected to grow by 0.1%, after rising 0.5% in the preceding month. Rising retail sales over time correlate with stronger economic growth, while weaker sales signal a declining economy.
Moreover, the Eurozone will publish inflation figures for June on Wednesday. On the year-on-year basis, the Eurozone CPI is expected to stay at 1.2%. The core figure, without volatile energy and food prices, is seen holding steady at 1.1%, unchanged from the preceding month.
The euro rose versus the U.S. dollar last week. In order for the upward movement to gain more momentum, it needs to break out and stay above 1.1285 on a four hourly basis. At this point, we will follow the daily resistance level at 1.1355. Otherwise, the daily support level will be at 1.1219.
Support: 1.1219 - 1.1103 - 1.0980
Resistance: 1.1285 - 1.1355 - 1.1450
The U.K. Office for National Statistics will release data on consumer price inflation for June on Wednesday. Analysts expect annual CPI to stay at 2.0% in June, while core inflation is forecast to rise to 1.8% from 1.7%.
The GBP/USD pair moved up above the 1.2528 main support level last week. If the upward movement continues, we will see the resistance levels at 1.2607 and 1.2668. On the other hand, if the pair drops below 1.2528, the next daily support level will be at 1.2395.
Support: 1.2528 - 1.2395
Resistance: 1.2607 - 1.2668 - 1.2723
The USD/JPY pair found sellers from the 108.49 daily resistance level and showed a downward movement last week. Now, we will focus on the 107.70 main support level. In order for the downward movement to gain more momentum, it needs to break down and stay below 107.70 on a four hourly basis. Should this occur, we will face the next daily support level at 106.72. Otherwise, we will see 108.49 as a resistance level again.
Support: 107.70 - 106.72
Resistance : 108.49 - 108.95 - 109.57
The Gold price found buyers from the 1391 major support level and extended gains last week with the possibility of lower rates and weakness in the dollar.
If the yellow metal’s price stays above 1414 on a four hourly basis. the upward movement may continue and the next resistance level can be seen at 1451. In contrast, If the price drops below 1414, the daily support level will be at 1391 again.
Support: 1414 - 1391 - 1364
Resistance: 1451 - 1483
The USD/CHF pair is now trading below the daily level of 0.9848. As long as the price stays below 0.9848 on a daily basis, the downward movement may continue and we will see the key support level at 0.9806. Although, if the price goes above 0.9848, the next resistance level can be seen at 0.9879
Support: 0.9806 - 0.9766 - 0.9723
Resistance: 0.9848 - 0.9879 - 0.9911
DAX30 Futures Index
The DAX30 Index is showing an upward movement above the 12373 daily level. As long as it stays above that level on a daily basis, the upward movement may continue and we will face 12565 as a resistance level. On the other hand, if the pair falls below 12373, the next support level will be placed at 12173.
Support: 12373 - 12173 - 11947
Resistance: 12565 - 12757
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