Market Talk– The US dollar climbed as June inflation data came in higher than expected, heightening the risk that inflationary concerns will persist, prompting betting on faster monetary policy tightening than Federal Reserve officials have indicated thus far.
– In June, consumer prices in the United States grew by the most in 13 years, with core CPI growing by a higher-than-expected 0.9 percent month-on-month against a forecast of 0.5 percent, and year-on-year jumping by 5.4 percent against a forecast of 4.9 percent.
– Rising inflationary pressures were exacerbated by supply restrictions and a further rise in the costs of travel-related services from COVID-19 low levels. According to analysts, the Fed’s response to the latest consumer pricing data in the United States is unlikely to be rapid.
– After the Reserve Bank of New Zealand announced on Wednesday that it would halt its large-scale asset-purchase program, the New Zealand dollar soared as high as 0.8 percent to 0.7070 US cents. When the RBNZ announced its policy decision earlier in the day, it kept the interest rate at 0.25 percent. In Asia on Wednesday morning, gold was higher as a stronger US dollar restrained gains, offsetting speculations that the Federal Reserve would not respond with quick monetary tightening despite consumer prices climbing at their fastest rate in 13 years last month.
Focus on the Graph GBP/USD Points to Remember 1. Sell the GBP/USD currency pair. 2. Sell the GBP/USD currency pair at 1.3840. Stop at 1.3875 and go for 1.3740 as your aim. 3. The British pound is likely to be weighed down by rising COVID-19 cases in the UK and strong US inflation figures. 4. The 20EMA line is expected to act as a price cap, with MACD indicating a bearish price trend ahead.
1. The US dollar is likely to be supported by strong US inflation figures.
2. An increase in COVID-19 cases in the United Kingdom is likely to put pressure on the British pound.
1. The price is expected to be capped by the 20EMA, which also suggests a bearish price trend is on the way.
2. The MACD indicator is still bearish, indicating a bearish price trend.
Overview of the Technology
USD/JPY — Overnight, the price rose to a high of 110.69, forming an Evening Star candlestick price pattern. This is a harbinger of a price high and a potential trend reversal to come. We expect a price move to 109.55 as long as price remains below 110.69. Stochastic has crossed over to the bearish side and is going lower, indicating a bearish price trend. MACD is also about to cross to the bearish side, indicating a bearish price trend. The 20EMA is still bullish.
Support
110.35109.95109.50
Resistance
110.70111.00111.40EUR/USD – The price fell below the previous low of 1.1783 to 1.1772. To resume its bullish momentum, however, price must rise above 1.1820. We believe price has struck a temporary bottom since Stochastic is oversold and set to have a positive crossover. However, both the MACD and the 20EMA are bearish, indicating a bearish price trend.
Support1.17701.17351.1705
Resistance1.18201.18501.1885EUR/AUD — We recommended buying this pair yesterday, but our prediction was incorrect, and we lost 25 pips on the trade. Price had dropped below 1.5795, indicating that the drop could be the start of a negative trend that could go below 1.5700 in the coming days. The stochastic is already oversold, and the MACD is likely to make a positive crossover. We prefer not to go short because we are concerned that this will be a false break.
Support1.57701.57351.5700
Resistance1.58151.58401.5885XAU/USD – The price has remained in the $1784.50 to 1818.25 range from the previous week. The MACD indicator is flat and neutral, and it is near to the zero line, indicating a sideways movement. The stochastic is close to overbought, but the 20EMA is positive. We prefer to see a topside breakout and would advise following this breakout in the coming days.
Support1805.001791.501784.65
1818.251825.101844.50AUD/USD — On Monday, we issued a sell advice for this pair at 0.7480, which was filled when the price surged to 0.7502. Yesterday, we advised retaining the stop around 0.7515 and the profit objective at 0.7395. The price dropped to 0.7427 this morning, but has since recovered to 0.7465. We would suggest lowering the stop to 0.7505. Although the stochastic is nearing oversold territory, the MACD and 20EMA are both neutral at the time.
Support0.74400.74100.7370Resistance0.74750.75050.7565
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