yesterday’s market wrap
The UK Consumer Price Index (CPI) report was a key focus of traders during the European session as consumer inflation remains very high in the UK after the last spike. An economic slowdown was expected but turned out to be less than expected, a disappointment for the pound bulls. Inflation data showed lower price pressures in June, with GBP/USD trading below 1.29 and UK yields also falling.
As a result, the market adjusted expectations that the Bank of England’s (BOE) interest rate outlook would be less hawkish. A rate hike of 25 basis points (bp) is currently priced in for August, more than 50 basis points. As a result, the GBP/USD pair plummeted from 1.3030 to 1.2905 and is currently hovering near the lower bound. The strong US dollar also put downward pressure on the currency pair.
Besides the UK inflation rate, we also have the final CPI inflation rate for the Eurozone. The headline number remained at 5.5%, while the core CPI was revised up slightly from 5.4% to 5.5%. The euro did not benefit as much, but the market still expects more interest rate hikes from the ECB.
USD/JPY rose, moving from around 139.00 to around 140.00, but buyers were unable to break out of that level. The upside was aided by more dovish remarks made by BOJ Governor Ueda in the previous session. His remarks affected market sentiment and likely contributed to the dollar’s appreciation against the Japanese yen.
Conversely, commodity dollars such as the Australian dollar and New Zealand dollar were put under downward pressure by the weakening of the Chinese yuan on the day. These currency movements are often influenced by China’s economic performance and its impact on regional trade and economic conditions. As the Chinese yuan depreciated, it weighed on antipodal currencies, leading to a depreciation of the yuan against other major currencies such as the US dollar.
Market Expectations Today
Today started with the Australian employment report.employment volatility was expected to decline to The unemployment rate was expected to remain unchanged at 3.6%, with 15,400 jobs, up from 75,900 the previous month. The European session is light, and only his EU economic forecasts are released from time to time.
In the US trade, unemployment claims are expected to rise slightly to 239,000 from the previous 237,000, and the Philadelphia Fed’s manufacturing index is expected to improve slightly to -10.1 points in June from -13.7 points in May. Second-hand home sales data will be released after that, but those numbers are expected to slow after yesterday’s slowdown in US real estate data. This will also be a negative factor for the US dollar.
After Tuesday’s move on weak US retail sales, volatility calmed down again yesterday as most assets saw some correction. Price action was a two-way street as the UK’s slowdown in CPI inflation also impacted the pound and euro, while the Chinese renminbi impacted the Australian and New Zealand dollars.
See the section below for update details.
Money Integrate for under $2,000
On Tuesday, gold resumed its bullish trend after several days of volatility after weak US retail sales in June. The price experienced another surge of over 1%, but sellers started pushing the price down at around $2,985. However, it failed to break below the support zone forming at $1,970 and opened two Godl signals against this zone yesterday, both of which closed profitably.
XAU/USD – Da 60 minute chart
Given the current market conditions, we offer the following trading signals:
- gold buy signal
- Entry price: $1,970 and up
- Stop Loss: $1,960
- Take Profit: $1,980
GBP/USD Crash after CPI figures soften
Yesterday, UK consumer inflation fell sharply in June, falling below 8% for the first time in over a year. The pound crashed, losing more than 250 pips from its all-time highs, to drop below 1.29. With the likelihood of further Bank of England rate hikes diminishing, we became bearish on the pair and decided to sell the retrace higher to the 20 SMA (grey).
Cryptocurrency update
Bitcoin Stay close to the $30,000 zone
BTC/USD – 240 minute chart
We decided to open another Bitcoin buy signal on Monday to play range again and buy BTC/USD just above $30,000.
- Entrance fee: $30,293.2
- Stop Loss: $29.490
- Take Profit: $31,493.21
200 SMA Holding ethereum
Ethereum has been trading bullish since the beginning of 2023, with higher lows and higher highs on the big charts. The moving averages, especially the 200 simple moving average (purple) on his H4 chart, are acting as support levels for this cryptocurrency.
The last long-term signal that started at the 200 SMA saw Ethereum price bounce back above $2,000, making it a profitable trade. As the cryptocurrency market is currently experiencing a recession, the price of Ethereum is once again returning to the 50 SMA. Based on this information, we are considering opening another buy signal at the 200 SMA in anticipation of a possible pullback from this support level.
Given these trends, the current situation suggests whether it is the right time to consider buying Ethereum.
ETH/USD – daily chart
- Entrance fee: $1,860
- Stop Loss: $1,740
- Take Profit: $2,020
