The pair will likely continue the recovery process as investors target the upper side of the channel at 25,000.

Bullish View

• Buy the BTC/USD price and set a take-profit at 24,500.
• Add a stop-loss at 22,500.
• Timeline: 1-2 day.

Bearish View

• Set a sell-stop at 22,800 and a take-profit at 20,000.
• Add a stop-loss at 24,000.

The BTC/USD price tilted upwards as investors react to the strong rebound of American stocks and the regulatory clarity in the United States. It rose to a high of 23,600, which was the highest level since July 31st this year.

Regulatory Clarity

Regulation is one of the top issues in the blockchain industry. As a result, many companies and institutional investors have avoided investing in bitcoin and other cryptocurrencies. One of the concerns is that it is unclear which regulator has the authority to regulate them.

This could soon change if a proposal by Senate leaders pass. Leaders of the influential Agriculture Committee introduced a bill that will empower Commodity Futures Trading Commission (CFTC) to regulate spot markets for digital cmmoditoes.

The bill comes at a time when many Americans have lost billions of dollars after the price of bitcoin and other commodities collapsed. Also, several companies in the sector like Celsius and Voyager Digital recently went bankrupt.

The BTC/USD price also rose as investors reacted to the latest quarterly earnings. This week, highly influential companies with an exposure to the crypto industry reported strong results. As a result, shares of firms like SoFi and PayPal rose by 25% and 10%, respectively.

This performance helped lift the top US indices like the Dow Jones and S&P 500 sharply higher. The indices rose by more than 1.5%. In the past few weeks, the indices have had a positive correlation with bitcoin.

Bitcoin’s recovery was relatively muted after several Fed officials hinted that the bank will continue hiking interest rates even as signs of weakness emerge. The next key catalyst for Bitcoin will be the upcoming US non-farm payrolls data scheduled for Friday this week. Analysts expect the data to show that the labor market weakened in July.

BTC/USD Forecast

The BTC/USD price moved sideways an the overnight session. It rose to about 23,600, which is at the middle of the rising channel shown in red. The pair is consolidating along the 25-period and 50-period moving averages while the Relative Strength Index (RSI) has moved slightly above the neutral point.

Therefore, the pair will likely continue the recovery process as investors target the upper side of the channel at 25,000. A drop below the support at 22,500 will signal that bulls have prevailed, which will see it retest the lower side of the channel.

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There is a likelihood that the pair will resume the bearish trend as bears target the key psychological level at 0.6750.

Bearish View

• Set a sell-stop at 0.6800 and a take-profit at 0.6700.
• Add a stop-loss at 0.6800.
• Timeline: 1-2 days.

Bullish View

Set a buy-stop at 0.6850 and a take-profit at 0.6900.

Add a stop-loss at 0.6800.

The AUD/USD price is holding steady after last week’s crash. The pair is trading at 0.6815, which is significantly higher than last week’s low of 0.6767. This price is about 6.46% below the highest point in June this year.

RBA Decision Ahead

The Australian dollar has been in a strong bearish trend in the past few weeks even after the Reserve Bank of Australia (RBA) turned extremely hawkish. In June, the bank caught many investors by surprise as it decided to hike interest rates by 0.50%. This was the biggest rate hike by the bank in decades.

The next key catalyst for the AUD/USD will be the upcoming interest rate decision that is scheduled for Tuesday. Analysts expect that the bank will intensify its battle against inflation by hiking interest rates by 0.50%. Most importantly, they believe that the bank will signal that it will deliver a similar hike in August.

These rate hikes have had an impact on the Australian economy. For example, the cost of government borrowing has risen substantially, with the yield of the 10-year rising to 3.47%. Similarly, consumers are paying more money for mortgages.

Banks like CBA, NAB, and Westpac have hiked the cost of fixed mortgages. According to RateCity, over 70 lenders have boosted their rates. This is affecting the economy, with data published on Monday showing that building approvals dropped sharply in May.

In a recent statement, RBA’s Philip Lowe warned that the country’s inflation will keep rising in the coming months. The bank expects that inflation will rise to 7% by end of this year. This is a significantly higher level considering that the bank has an inflation target of 2.0%.

The AUD/USD pair will also experience some low volume on Monday since American markets will be closed for the Independence Day celebration.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair formed a symmetrical triangle pattern last month. It then managed to have a bearish breakout last Friday as the dollar strength continued. It fell to a low of 0.6762, which was the lowest level this year.

The pair has now pulled back as investors buy the dips. It remains below the 25-day and 50-day moving averages and the lower side of the triangle pattern.

Therefore, despite the pullback, there is a likelihood that the pair will resume the bearish trend as bears target the key psychological level at 0.6750.

Throughout this week’s trading, bulls’ attempts to push the price of an ounce of gold to the top failed, as gold gains did not exceed the resistance level of $ 1841 an ounce.

With the return of the strength of the US dollar and the start of stimulus to the yellow metal market, the price of gold XAU/USD returned to decline to the support level of $ 1812 an ounce. This is its lowest for the past two weeks and settles around the level of $ 1818 an ounce. Gold prices fell as the dollar rose amid rising inflation and fears about the risks of an economic recession, which led to a surge in demand for the currency’s safe haven.

Comments from Fed officials confirming further sharp increases in US interest rates to cut high inflation also boosted the dollar. In this regard, the President of the Federal Reserve Bank of San Francisco, Mary Daly, said this week that the annual economic growth of the United States is expected to slow to less than 2 percent amid tightening monetary policy by the central bank.

At the Joint Policy Committee with leaders of the European Central Bank and Bank of England, Federal Reserve Chairman Jerome Powell reiterated the FOMC’s commitment to lower inflation. He added that while the Fed does not target the foreign exchange rate, the dollar’s strength is working to reduce inflation at the margins.

On the US economic news front, revised data from the Commerce Department showed that US economic activity contracted slightly more than previously estimated in the first quarter of 2022. The report showed that the decline in real GDP in the first quarter was revised to 1.6% from 1.5% previously announced. Economists had expected the drop in GDP to be unrevised.

The slightly larger drop in GDP in the first quarter followed the 6.9% rise in GDP in the fourth quarter of 2021.

Prior to that, a report from the Conference Board showed that consumer confidence in the US continued to deteriorate in June. The statement said that the US consumer confidence index fell to 98.7 in June from a downwardly revised 103.2 in May. Economists had expected the index to decline to 101.0 from originally 106.4 for the previous month. As the decline continued, the US consumer confidence index fell to its lowest level since it reached 95.2 in February 2021.

The US stock market struggled to find direction on Wednesday, as traders evaluated central bank chiefs’ comments on the outlook for the economy and interest rates. As such, the S&P 500 closed almost flat and above the 38.2 percent Fibonacci retracement level of around 3,815 that investors were watching closely. The quarterly rebalancing of portfolios has contributed to market volatility. So, I won the bonds and the dollar.

Volatility has gripped the markets this year due to concern that a hawkish Fed could push the economy into recession. The S&P 500 is on its way to its worst quarter since March 2020 amid a surge in Treasury yields. The US central bank was in denial about inflation and moved very slowly in an attempt to calm rising prices. That has put it on a path to a recession if it hasn’t already.

The bond market turned around with a half-point cut in the Fed’s benchmark interest rate sometime in 2023, as traders raised their bets on a US recession that eventually halted the central bank’s violent tightening campaign. In this regard, Loretta Meester, president of the Federal Reserve Bank of Cleveland, said that officials should not be satisfied with increases in long-term inflation expectations and should act aggressively to reduce price pressures. Wednesday’s data showed US consumer spending expanded in the first quarter at the weakest pace of the pandemic recovery, pointing to a sudden sharp downward revision indicating that the economy is on weaker fundamentals than previously thought.

CFOs are growing increasingly pessimistic about the economy this year, with the sentiment gauge dropping to its lowest level in nearly a decade. Participants have lowered their growth expectations, according to the latest quarterly results of the CFO’s Survey, a collaboration between Duke University’s Fuqua School of Business and Fed Banks in Richmond and Atlanta.

Gold price analysis today:

The downside trend for the XAU/USD gold price may increase in the event that prices move towards the psychological support level of 1800 dollars an ounce. This may increase the technical selling to move towards stronger support levels, and the next for the bears will be the targets of the support levels 1785 and 1770 dollars, respectively. I still prefer buying gold from every bearish level. On the upside, the bulls may find strong momentum if prices move higher towards the resistance levels of 1838 and 1855 dollars, respectively.

Recently, the GBP/USD exchange rate clung to a lot of gains in the wake of the Bank of England’s June policy decision but without any further corrective drop by the dollar, the pound is likely to consolidate within a range of approximately 1.2171 to 1.2323 during the trading session. The British pound drew bids from the market near 1.22 or below last week after it appeared to be benefiting from signs of a more hawkish slant in the Bank of England’s monetary policy stance as well as what was, for the most part, a softer US dollar.

The price of the pound sterling against the dollar, GBP/USD, is stabilizing around the 1.2270 level at the time of writing the analysis.

In general, the US dollar fell against most of the major currencies last week even as financial markets regressed to their expectations regarding the interest rates of the US Federal Reserve, the Bank of England and many other central banks amid a significant increase in market concerns about the global economic outlook. Commenting on this, Juan Manuel Herrera, analyst at Scotiabank said, “Range trading all this week provides us with little in terms of technical guidance, but the pound’s failure to hold above 1.23 suggests that the near-term upside is limited after an unsuccessful test at 1.24. last week”.

The analyst added, “The support is the lowest price during the day at 1.2240, followed by 1.2220, and the resistance after the 1.23 and 1.2324 figure area is the middle of 1.23.”

The market’s implied expectations for the Fed’s end-of-year 25 basis point mid-point fell from 3.45% to 3.36% last week while the equivalent figure for the end of 2023 fell from 3.3% to 3% last week. According to several analyst accounts, the drop in market expectations was a result of comments by Federal Reserve Chairman Jerome Powell, who told Congress that it would be difficult for the Fed to bring down inflation without disrupting the labor market or hurting the economy. In other words, achieving a smooth landing will not be easy. So, Tom Kenny, chief economist at ANZ, said it was not the Fed’s intention to cause a recession, but acknowledged it was a possibility.

A growing group of Fed officials are leaning toward another 75 basis point hike at the FOMC July 26-27 meeting. We expect a higher CPI reading for June (scheduled for July 13) will see a repeat of the Fed’s decision in June.”

The price of the US dollar fell after the recent testimony of Jerome Powell, which helped the price of the pound against the dollar to remain supported above the 1.22 level in the process. Despite the series of British economic numbers that also forced the markets to curb expectations about the Bank of England interest rate at the end general. “The UK PMIs for June surprised to the upside, staying flat compared to the previous month, with the release gaining more prominence given the sharp contrast to the Eurozone and US numbers,” says Chris Turner, analyst at ING Bank.

“GBP/USD may remain in the 1.22-1.23 range for now, while EUR/GBP may continue falling towards the lower half of the 0.8500-0.8600 range,” the analyst added.

The forecast of the pound sterling against the dollar:

The trading strategy of selling the GBP/USD currency pair from every bullish level is still the most appropriate for the performance of the currency pair. The concern stemming from the Bank of England about an economic recession coinciding with raising interest rates and British political anxiety and the followers of the US central bank is still more hawkish policy factors supports this strategy. Currently, the closest rebound targets are 1.2325 and 1.2420, respectively.

On the other hand, the return of the sterling dollar pair towards the support level 1.2175 will restore expectations for a stronger bearish move towards the psychological support 1.2000, respectively.

The pair will likely remain in this range ahead of Jerome Powell’s testimony.

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.6900.
• Add a stop-loss at 0.7020.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 0.7000 and a take-profit at 0.7050.
• Add a stop-loss at 0.6950.

The AUD/USD pair remained in a consolidation phase as investors focus on the recent minutes by the Reserve Bank of Australia (RBA). The Aussie is trading at 0.6975 against the US dollar, which is slightly above last Friday’s low of 0.6898.

Australia’s Interest Rates to Keep Rising

The AUD/USD pair moved sideways after the RBA published its minutes on Tuesday. The minutes showed that officials are optimistic that higher interest rates were necessary to fight inflation. In that meeting, the bank caught many investors by surprise when they made a 0.50% rate hike. Analysts were expecting a 0.25% rate increase.

In a speech on Tuesday, RBA’s Philip Lowe said that rates will continue rising this year. He also cautioned that it was unlikely that the bank will hike rates by 4% as most analysts are expecting. In the statement, he said that hiking rates by 4% would have a negative impact on households and companies and would likely lead to a recession.

The AUD/USD is moving sideways as recent data point to falling commodity prices. The Bloomberg Commodity Index has risen by more than 4% from its highest point this month. Prices of key commodities like iron ore, platinum, and copper have all dropped by double-digits as investors worry about the ongoing demand dynamics.

Meanwhile, data from the United States showed that higher interest rates were having an impact on the country’s housing market. With mortgage rates rising, data showed that existing home sales dropped sharply in May. At the same time, the median house price rose to $409k because of the ongoing demand and supply imbalance.

The next key catalyst for the pair will be a testimony by Jerome Powell. He will address the current state of the economy and last week’s interest rate decision.

AUD/USD Forecast

The AUD/USD pair has been in a tight range in the past few days. It is trading at 0.6974, which is along the 25-day and 50-day moving averages while the MACD has moved to the neutral point. The pair has also formed a symmetrical triangle pattern that is shown in red. It is also along the standard pivot point.

Therefore, the pair will likely remain in this range ahead of Jerome Powell’s testimony. It will then resume the downward trend as bears target the key support level at 0.6900.

The outlook for the pair is bearish ahead of the upcoming UK inflation data and Fed chair testimony. 

Bearish View

• Sell the GBP/USD pair and set a take-profit at 1.2150.
• Add a stop-loss at 1.2350.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.2295 and a take-profit at 1.2350.
• Add a stop-loss at 1.2200.

The GBP/USD price continued to consolidate as investors waited for the upcoming UK consumer and producer inflation data. The pair also reacted mildly to the ongoing strike by rail workers. It was trading at 1.2271 on Wednesday morning.

UK Inflation Data Ahead

The UK economy is going through numerous challenges. The most important one is that the country’s consumer and producer inflation is soaring as the crisis in Ukraine continues. It is estimated that this inflation will push the average food bill by £380 this year.

The Office of National Statistics (ONS) will publish the latest UK CPI and PPI data on Wednesday morning.

Economists polled by Reuters expect the data will show that inflation is still surging. The median estimate is that inflation rose from 9.0% in April to 9.1% in May. If analysts are accurate, it will be the highest increase in decades.

On the positive side, analysts expect that the headline and core inflation eased slightly on a month-on-month basis. In its meeting last week, the Bank of England warned that inflation will rise to over 10% in the coming months.

Meanwhile, UK producers are expected to see elevated costs. The PPI input and output are expected to have risen by 19.4% and 14.7%, respectively.

These numbers will come at a time when the transport sector in the UK is going through turmoil. Over 40,000 rail workers went in the biggest strike in over 30 years. The three-day strike is expected to have some impact on the country’s inflation.

The GBP/USD pair will react to the upcoming testimony by Jerome Powell. The Fed Chair will be quizzed by Senators on the state of the economy and actions that the bank is doing. It will be his first grilling since the Fed decided to hike rates by 0.75%.

GBP/USD Forecast

The GBP/USD pair continued to consolidate ahead of the upcoming UK consumer inflation data. It is trading at 1.2270, where it has been in the past two straight days. The pair remains slightly above the standard pivot point and is also consolidating along the 25-day and 50-day moving averages.

It has also formed a small rising wedge pattern. Therefore, the outlook for the pair is bearish ahead of the upcoming UK inflation data and Fed chair testimony. The key support to watch will be at 1.2150.

GBP/USD remaining in a tight range.

Bullish view

• Buy the GBP/USD pair and set a take-profit at 1.2670.
• Add a stop-loss at 1.2520.
• Timeline: 1-2 days.

Bearish view

• Set a sell-stop at 1.2535 and a take-profit at 1.2490.
• Add a stop-loss at 1.2600.

The GBP/USD pair remained in a consolidation phase as investors reacted to the political situation in the UK. Sterling is trading at 1.2587, which was higher than this week’s low of 1.2437. It is about 3.50% above the lowest level in May.

Sterling continues its consolidation

The GBP/USD pair remained in a tight range on Tuesday as the UK parliament failed to impeach Boris Johnson. Tory members lacked the required 180 votes needed to impeach him.

This means that he will not face another impeachment in the next 12 months. In a statement, Johnson vowed to continue serving as the prime minister and implementing his plans. The pair showed no major movements because the vote was in line with what analysts were expecting.

The pair will likely remain in this range on Wednesday because there is no major scheduled economic event. The only important data to watch will be the UK house price estimate by Halifax. Based on the previous estimate by Nationwide, analysts believe that prices started to stabilize in May as mortgage rates rose.

The GBP/USD is also moving sideways as US bond yields retreat. The yield of the 10-year declined to 2.977% while that of the 30-year fell by 1.85% to 3.13%. The spread between the 10 and 2-year bond yields remained unchanged.

This price action is likely because investors are waiting for the upcoming American inflation data. The expectation is that the country’s inflation remained close to its 40-year high although it started to peak.

One sign of this is that some retailers will be forced to lower prices because of their high inventories. On Tuesday, Target said that it will start lowering some prices in the coming weeks because it over-purchased products to boost its readiness.

GBP/USD forecast

The four-hour chart shows that the GBP/USD pair has been in a tight range in the past few days. It managed to move to a high of 1.2590, which was slightly above this week’s low of 1.2438. It has also crossed the 25-day and 50-day moving averages and is approaching the important resistance level at 1.2666.

The Money Flow Index (MFI) has moved close to the neutral level of 50. Therefore, the pair will likely keep rising as bulls target the key resistance level at 1.2670.

The pair will likely keep rising as bulls target the upper side of the rising channel at 0.7172. 

Bullish View

• Buy the AUD/USD pair and set a take-profit at 0.7200.
• Add a stop-loss at 0.7150.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 0.7058 and a take-profit at 0.7000.
• Add a stop-loss at 0.7150.

The AUD/USD pair tilted upwards as the US dollar retreated following the latest minutes by the Federal Reserve. The pair rose to 0.7091 on Thursday morning, which was slightly higher than this week’s low of 0.7037.

US GDP Data Ahead

The Fed published its minutes for this month’s meeting. The minutes provided more color about the deliberations that took place earlier this month. In that meeting, officials decided to hike interest rates by 0.50%, the highest increase in two decades.

The minutes showed that officials are willing to go further than that. They showed that most members of the committee are now comfortable with more 0.50% rate hikes in the next couple of meetings. That’s a higher forecast than what most analysts were expecting. It is also more hawkish than what the Reserve Bank of Australia (RBA) expects to do.

The risk for the Fed is that these aggressive rate hikes will push the US into a recession as consumer spending slows dramatically. Recent numbers have shown that this has started happening.

For example, data published on Tuesday revealed that new home sales declined by more than 16% as mortgage rates surged. Retail sales have started dropping as inflation rises. At the same time, consumer confidence has been in a strong downward trend.

There will be no major data from Australia today. Therefore, investors will focus on the upcoming numbers from the US. The statistics agency will release the latest GDP estimates. Economists expect the data to reveal that the American economy expanded by 8.0% on a year-on-year basis as it contracted by 1.3% on a QoQ basis. Still, the impact of these numbers on the pair will be limited since they are the second estimate. The US will also publish pending home sales numbers.

AUD/USD Forecast

On the four-hour chart, we see that the AUD/USD pair has been in a strong bullish trend in the past few days. The pair formed an ascending channel that is shown in black. It is now above the lower side of the channel and is above the 25-day and 50-day moving averages while the MACD has formed a bearish divergence pattern. The pair is also slightly below the 38.2% Fibonacci retracement level.

Therefore, the pair will likely keep rising as bulls target the upper side of the rising channel at 0.7172. The stop-loss for this trade will be at 0.7030.

The outlook of the pair is neutral with a bearish bias.

Bearish View

• Set a sell-stop at 1.2265 and a take-profit at 1.2180.
• Add a stop-loss at 1.2400.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.2350 and a take-profit at 1.2425.
• Add a stop-loss at 1.2280.

The GBP/USD pair is in a consolidation phase after the better-than-expected US inflation data and ahead of the UK GDP numbers. It is trading at 1.2300, which is close to the lowest level this month. The pair has crashed by more than 6.5% from its highest level in April.

UK GDP Data Ahead

The UK economy is slowing down as the rising inflation continues to hamper the Covid recovery. Recent data revealed that the country’s retail sales plummeted in March while consumer inflation remains at elevated levels. Also, there are some challenges emerging in the resilient housing sector.

When making its interest rate decision last week, the Bank of England warned that recession risks were rising. It also warned that more rate hikes were necessary in a bid to fight the soaring inflation. Like the Fed, the bank is walking a thin line of reducing inflation while preventing a recession.

The Office of National Statistics (ONS) will publish important economic numbers today. Economists expect these numbers to show that the country’s trade deficit narrowed from 20 billion pounds to 18.5 billion pounds. In the same period, expectations are that the economy barely grew in March as prices rose.

The other important numbers to watch will be the March construction output, industrial production, and manufacturing production. These numbers will have limited impact on the GBP/USD pair.

The GBP/USD pair is also rangebound as investors assess the ongoing inflation trends. While gas and oil prices are at elevated levels, there are signs that inflation is nearing a peak. For example, data published by the US Bureau of Labor Statistics showed that the American inflation declined in April for the first time in eight months. The same trend could happen in the UK.

GBP/USD Forecast

The GBP/USD pair has been in a tight range in the past few days. It is trading at 1.2300, which is slightly above this week’s low of 1.2265. The price has moved between the pivot point and the first support. The downward trend is still being supported by the 25-day and 50-day moving averages. It has also formed what looks like a small bearish flag pattern.

Therefore, the outlook of the pair is neutral with a bearish bias. If this happens, the next key support level to watch will be at 1.2190. The stop-loss for this trade is at 1.2400.