In today’s economic events, we are expecting for UK’s Consumer Price Index (CPI) for the month of June. For the past few days, GBP/USD was heading in an upward trajectory. Based on our economic calendar for today, UK CPI inflation is expected to dive at 0.4% on an annual basis, lower than the previous 0.5%. Let us not forget that the inflation numbers will be the key for GBP/USD pair that the BOE (Bank of England) may have the possibility for a rate cut.
👉 Most Asian currencies strengthen against the U.S. dollar as risk-on sentiment stays buoyant amid news that Moderna’s Covid-19 vaccine produced antibodies to the virus in patients in an early-stage trial. “Optimism concerning vaccine progress has helped bolster the tone,” says Stephen Innes, chief global markets strategist at AxiCorp. Encouraging news about a Covid-19 vaccine also boosted investor sentiment. But are there still headwinds ahead?
👉 NAB has revised up its expectations for Australia’s 2Q GDP growth as indicators around spending continue to surprise. The contraction in 2Q GDP is now likely to be closer to 5%, much less than the bank’s earlier forecast for a contraction of 8.5%. Still, with lockdowns in place in Victoria there are fresh doubts about the pace of an expected jump in growth through 3Q.
👉 Commodity-linked currencies were broadly higher against the greenback. AUD/USD climbed 0.7% to 0.6988 and NZD/USD was up 0.1% to 0.6545. Government data showed that China’s exports grew 0.5% on year in June (-2.0% expected) and imports rose 2.7% (-9.0% expected).
👉 Oil bounces back amid upbeat expectations on the upcoming OPEC+ meeting, WTI and Brent prices traded higher overnight. Can we see more upward moves in the near-term? What can stop oil prices from rallying higher?
Here are the High Impact Economic events expected today:
As we have observed earlier in the Currency Monitoring Chart, we discovered that AUD/CHF lines are separated with the farthest distance.
INTRADAY MARKET INSIGHTS
USD/JPY Intraday:
Caution. The pair has entered a consolidation phase but remains at levels above the key support at 107.10. The pair has repeatedly failed to break below this level since yesterday. In case this key support is not breached, the pair still stands chances of revisiting 107.40 on the upside. Alternatively, a break below 107.10 would trigger a further decline toward 106.95 on the downside.
EUR/USD Intraday:
Watch 1.1445 upside. The pair keeps trading on the upside while being supported by the ascending 20-period moving average. In fact, it is striking against the upper Bollinger band calling for acceleration to the upside. Upon reaching the first upside target at 1.1420, the pair should then target 1.1445 on the upside. Alternatively, a break below the key support at 1.1380 would open a path toward 1.1355 on the downside.
AUD/USD Intraday:
Target 0.7015 upside. The pair is challenging the key level of 0.7000 on the upside while being supported by the ascending 20-period moving average. Above 0.7000, the next upside target is located at 0.7015. Only a return to the key support at 0.6960 would open a path toward 0.6945 on the downside.
NZD/USD intraday:
Rebound. The pair has broken above a bullish falling wedge pattern. In fact, it has rebounded to levels above both the 20-period and 50-period moving averages, while the relative strength index has climbed to the 60s, signaling a bullish bias. Unless the key support at 0.6513 is violated, the pair should rebound further to 0.6575 and 0.6592. Alternatively, below 0.6513, expect a drop to 0.6485.
GBP/USD Intraday:
Rebound continues. The pair continues a rebound from a low of 1.2478 seen yesterday. Currently it stays at levels above both 20-period and 50-period moving averages. Therefore, the technical configuration still favors a bullish bias. A break above the overhead resistance at 1.2590 would trigger a further advance toward 1.2610 on the upside. Key support is located at 1.2530.
The following is GBP/USD looking at 4 hour chart:
The following is GBP/USD looking at daily chart:
USD/CHF Intraday:
Towards 0.9365. The pair maintains a bearish bias below the key resistance at 0.9410. Currently, the 20-period moving average has dropped further below the 50-period one, and the relative strength index has dipped to the 40s, suggesting a bearish bias. As long as the key resistance at 0.9410 holds, the pair should proceed to 0.9380 and 0.9365 on the downside. Alternatively, above 0.9410, expect a revisit to 0.9425 on the upside.
USD/CAD Intraday:
Target 1.3555. The pair has retreated after approaching the month-high of July. In fact, the 20-period moving average has crossed below the 50-period one, and the relative strength index has dropped to the 40s, indicating a bearish bias. Below the key resistance at 1.3625, expect a decline to 1.3580 and 1.3555. Alternatively, a break above 1.3625 would open a path to 1.3645 on the upside.
EUR/JPY Intraday:
Upside prevails. The pair is supported by a rising trend line drawn from July 10. Currently, it is trading at levels above both the ascending 20-period and 50-period moving averages, while the relative strength index stands firmly in the 60s, suggesting continued upward momentum. Above the key support at 121.87, expect an advance to 122.87 and 123.12. Alternatively, a break below 121.87 would trigger a pull-back to 121.46.
EUR/GBP Intraday:
Further upside. The pair has broken above the day-high of July 6. Currently, support is provided by the rising 50-period moving average, and the relative strength index stays above the neutrality level of 50, indicating a bullish bias. As long as the key support at 0.9051 holds, the pair should climb to 0.9113 and 0.9130. Alternatively, a break below 0.9051 would trigger a return to 0.9023 on the downside.
