A breakdown below 0.6882 would be a bearish sign.

My previous signal last Monday was not triggered as there was no bullish price action when the price first reached the support levels which I had identified that day.

Today’s AUD/USD Signals

Risk 0.75%

Trades may only be taken before 5pm Tokyo time Tuesday.

Short Trade Idea

• Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 0.6964 or 0.6993.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

• Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 0.6882, 0.6797, or 0.6784.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

AUD/USD Analysis

I wrote in my previous forecast on 15th August that if the AUD/USD currency pair could make two consecutive lower hourly closes below the support level at 0.7063, that could be a good short trade entry signal, as the price would then have a lot of room to fall before reaching another support level – the next level is not until 0.7010. I also thought it was a relatively good time to be trading this currency pair as it was in the market’s focus as a key risk barometer,

This was a good call, as following it would have got you in short at 0.7045 until the price began to bottom out, at least temporarily, at about 0.7000, so there was a nice 35 pips of profit available there.

We saw further falls over the week, as risk sentiment continued to sour and the US Dollar made a strong recovery. Friday saw an especially strong move, with the price trading as low as 0.6859. This presented a bearish technical picture as the market opened this week, however we have seen strength in the AUD today and the price was able to break up above the former resistance level at 0.6882 which may now act as support. Yet, I think that the price will probably turn bearish again later, and I doubt that the bullish retracement will make it to the next resistance level at 0.6964, but if it did, that could be a spot for a short trade entry for swing traders.

If the price quickly gets established back below 0.6882, that will be a bearish sign, and then it may become possible for shorter-term traders to sell on rallies on short-term time frames.

There is nothing of high importance due today regarding either the AUD or the USD.

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The euro narrowly avoided a move towards the psychologically important level of parity against the dollar in the last session of trading last week. However, it was last seen struggling to fend off a dollar rally after US nonfarm payroll numbers on the upside surprised market expectations for June. The price of the EUR/USD fell last week to the support level 1.0071, the lowest since 2002, and closed the week’s trading around the support level 1.0183.

According to official figures, non-farm payrolls in the United States increased last month when about 372,000 jobs were created either by the economy or simply recovered from the damage caused by previous coronavirus containment efforts, which was far exceeding the 260,000 increase indicated by the measures consensus among economists. Meanwhile, the country’s unemployment rate stabilized at 3.6% in June, staying close to its lowest level in several decades before the outbreak of the pandemic.

The US unemployment rate stood at 3.6% for the fourth consecutive month, and the number of unemployed was essentially unchanged at 5.9 million in June. These measures differ slightly from their values ​​in February 2020 (3.5 percent and 5.7 million, respectively), before the coronavirus (COVID-19) pandemic, the Bureau of Labor Statistics said.

However, the office added: “Total non-farm employment is down 524,000, or 0.3 percent, from the pre-pandemic level in February 2020.”

Average hourly earnings growth came in at 0.3% last month and 5.1% for the year to the end of June, which is potentially significant to the Fed’s forecast and reverses declines from 0.4% and 5.3%, respectively. Wage growth did not match the pace of inflation in the US, which was more than 8% on a single scale for the month of May, but it was on higher than usual levels and central banks usually interpret this as fueling inflation and a call for higher interest rates.

The market has already assessed the risks of the fed funds rate rising 0.75% to 2.5% this month, but that didn’t stop the dollar from rising or the euro from falling in the wake of Friday’s data. One possible explanation for Friday’s data and the dollar’s response to it is that the post-pandemic US labor market is in good shape and likely only adds to the ongoing upside risks to the Fed’s interest rate outlook.

This comes after the June monetary policy meeting minutes were explicitly announced “with the awareness that a more restrictive stance may be appropriate if high inflation pressures persist”. There was broad support at the FOMC in June to raise US interest rates to a “moderately restrictive” level of 3% to 3.5% by the end of the year, but Fed officials have since made clear that they will be ready for that.

“At the current stage, with inflation remaining well above the committee’s target, participants noted that a transition to a restrictive policy stance is required to fulfill the committee’s legislative mandate to promote maximum employment and price stability.” In addition, such a position would be appropriate from a risk management perspective as it would put the Committee in a better position to implement a more restrictive policy if inflation comes in higher than expected.”

Technical analysis of the EUR/USD pair

In the near term and according to the performance on the hourly chart, it appears that the EUR/USD is trading within the formation of a limited ascending channel. This indicates a significant short-term bullish momentum in market sentiment. Therefore, the bulls are looking to ride the current bounce towards 1.0209 or above to 1.0243 resistance. On the other hand, the bears will target short-term profits at around 1.0140 or lower at 1.0106.

In the long term and according to the performance on the daily chart, it appears that the EUR/USD is trading within the formation of a descending channel. This indicates a significant long-term bearish momentum in market sentiment. Therefore, the bears will look to extend the current declines towards 1.0056 or lower to the 0.9915 support. On the other hand, the bulls will look to pounce on long-term profits around 1.0282 or higher at the 1.0448 resistance.

For six trading sessions in a row the GBP/USD price moves in tight ranges and during it every time it tries to bounce up, it quickly falls back down again. As the pressure factors on the sterling pound are still strong, it is represented in the continuation of political anxiety in Britain. By comparing the Bank of England and the US Federal Reserve in the future of raising interest rates, the dollar will be the strongest. The GBP/USD pair is stable around the 1.2285 level at the time of writing the analysis.

The Bank of England’s base rate should be set at 10% given the scale of UK inflation, according to one of the major international finance houses. Research by Swiss Re, a wholesale provider of reinsurance and other insurance-based risk transfers, has found that the Bank of England is farther off the “curve” than any other global central bank.

The results come on the heels of the Bank of England’s decision to raise interest rates by another 25 basis points in June, raising the benchmark rate to 1.25%. The bank could move very slowly if it is to achieve its target of stabilizing UK inflation back to 2.0% according to Swiss Re. As such, Swiss Re sees more rallies coming from all major central banks, including the Bank of England which cannot be left behind by the likes of the US Federal Reserve.

“The most important central bank tightening cycle in decades has begun, and we expect more policy tightening this year and next,” says Jerome Hegele, chief economist at Swiss Re Group. “We believe that central banks will proceed with tightening policy even as growth slows, until there is a significant reduction in inflation momentum,” he adds. Overall, some economists have accused the BoE of being more focused on maintaining UK economic growth than containing inflation, meaning that it has not made rate hikes in increases of more than 25 basis points. The policy decision in May was notable as the bank indicated it was a reluctant parker, fearing that the economy was on the verge of faltering.

The bank seems to have realized that its primary objective is to fight inflation, even if it means the economy has stalled. Accordingly, Hegele says: “A strong new cycle of central bank tightening is needed.” “Adequate interest rate policy estimates, which quote our estimates of the Taylor rule, suggest that virtually all central banks with major advanced economies are at least 2 points below the levels of interest rates that can be guaranteed given the current economic environment,” he added.

The Taylor rule is an equation that states the central bank’s policy rate as a function of inflation and economic stagnation as the output gap or unemployment gap. In the case of the US Federal Reserve, the current environment would mean policy rates of around 7%, compared to 1.75% at present. For the Bank of England, a bank interest rate closer to 10% seems more appropriate.

The BoE will have little choice but to keep raising rates as long as the Fed continues at its current pace, which means a 50bp hike in the August policy decision is highly likely. Swiss Re explains that those central banks that are left behind risk seeing their currencies weaken, which only adds to inflationary pressures.

This is certainly the view of BoE MPC Catherine Mann who said in a recent speech that the Bank should be more active in following the Fed to defend the value of the GBP and reduce imported inflationary pressures. However, the BoE is full of policymakers who remain concerned about economic growth, and the odds of a rise of another 25 basis points in August remain high as a result. This will be a negative development for the GBP as the market is now fully priced at a 50bp move.

GBP/USD forecast:

On the daily chart below, the price of the GBP/USD currency pair is moving in a neutral position, but the stronger tendency is still to the downside. The bears’ return towards the support level 1.2175 will restore the strength of the stronger bearish expectations towards the psychological support level 1.2000, respectively. The technical indicators will move towards strong oversold levels. In return for a breach of the current trend, the currency pair must move towards the resistance levels 1.2525 and 1.2700 as a first stage. I still prefer to sell the currency pair from every bullish level.

There are signs of a potential temporary bottom near $20k.

Previous BTC/USD Signal

My last signal on Tuesday could have produced a long trade from the bullish pin bar rejecting the support level I had identified at $20,910, but I did make it clear bias remained bearish below $24,016.

Today’s BTC/USD Signals

Risk 0.50% per trade.

Trades must be taken prior to 5pm Tokyo time Thursday.

Long Trade Ideas

• Long entry after a bullish price action reversal on the H1 timeframe following the next touch of $19,977 or $19,578.
• Place the stop loss $100 below the local swing low.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

Short Trade Ideas

• Short entry after a bearish price action reversal on the H1 timeframe following the next touch of $23,000 or $24,016.
• Place the stop loss $100 above the local swing high.
• Adjust the stop loss to break even once the trade is $100 in profit by price.
• Take off 50% of the position as profit when the trade is $100 in profit by price and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

BTC/USD Analysis

I wrote in my last analysis on Tuesday that strong risk-off sentiment in the market had created a very bearish situation, but also there were initial signs that the price may be making a bottom just above $20k. I was looking for a short trade from a bearish reversal at the nearest key resistance level, which was situated at $24,016, likely to be the day’s pivotal point.

This was a good call as although $24,016 was not reached, the price has remained bearish below that, but the tentative bottom I called around $20k has also held.

We are now seeing a bearish consolidation between $20k and $23k, with the current dominant wave at the time of writing being bearish.

Yesterday’s FOMC statement and projections produced a minor relief rally which pushed the price up, but it ran out of steam here quite quickly at $23k.

I think shorter-term traders can enter short trades at pullbacks within bearish waves closer to $23k than $20k if the available spread is acceptable. Longer-term traders should look for a short from another reversal at $23k or wait for a daily close below $19,500 which would be a very bearish sign.

A daily close below $19,500 will indicate that Bitcoin is ready to take a bearish trip to as low as $13k.

The entire crypto ecosystem is showing severe signs of strain. However, we may see buying at the $20k area, but below $20k we will see a big wave of forced institutional liquidations which will be quite likely to trigger a further strong fall in the price of Bitcoin.

I personally will not take any long trades here under any circumstances.

There is nothing of high importance due today regarding either Bitcoin or the US Dollar.

During the middle of this week’s trading, the British pound tried to recover its recent losses against the dollar, the euro, and all other major currencies. There was no clear motive for the advance but improving global investor sentiment during the US stock trading session may have helped the British Pound leaning towards gains under these conditions. However, a look at the pound’s performance shows a clear outperformance which suggests some real individual demand for the British currency. In the case of the GBP/USD currency pair, it rebounded to the 1.2599 level, and the pair kept looking for catalysts to complete the rebound, but the situation may remain cautious until the US inflation numbers are announced tomorrow. This will paint a picture of the currency pair’s trading closing for this week.

In fact, it was not only the G10’s periphery that Sterling outperformed, as gains were also recorded against some of the major names in Asia, emerging markets, and Eastern Europe. Thus, the broad nature of the advance cannot be explained by broader risk trends as there are some currencies which will almost certainly advance against Sterling if global sentiment is in the driving seat.

The gains come amid scarcity of first-order event risks for the pound, although it saw some volatility during Monday and Tuesday as global stock markets fluctuated and political intrigue was on display in the form of a vote of no confidence in British Prime Minister Boris Johnson.

However, sterling could come under pressure against the euro on Thursday if the European Central Bank indicates that a 25 basis point rate hike in July will occur in July while also confirming market expectations of a potential 75 basis point hike over the remainder of the year.

Investors are now largely anticipating such moves, and therefore they should not introduce much volatility to the Euro. However, forex currency analysts are watching for any indication that the ECB may “advance” and raise by 50 basis points at one of the upcoming meetings, believing that a more traditional 25 basis point hike is not enough given the scale of eurozone inflation.

This could set the Euro on fire and push the GBP/EUR exchange rate lower over the weekend. The Bank of England will then focus on June 16, when it will likely raise rates by another 25 basis points.

The UK rate hike comes amid rising UK inflation and a slowing economy, which are contradictory forces that don’t necessarily provide a supportive mix for the pound. Accordingly, Elias Haddad, senior currency strategist at the Commonwealth Bank of Australia, says: “The biggest issue for UK financial markets right now is the country’s move into stagflation. This will keep UK real yields very negative and mean that sterling will be trading at a significant discount to the underlying balance for some time.”

However, new research from investment bank Investec has found that “the UK’s overall outlook may be overblown” and they expect the pound to rebound over the coming months as a result. The global lender and financial services provider says that although they cut their forecasts for UK economic growth for 2022 and 2023, they do not believe a UK recession is inevitable.

Instead, the robust wage dynamics and savings spending collected during the Covid pandemic will provide a cushion to the economy during the “cost of living crisis.” “Some pessimism in the UK’s overall outlook may be overstated,” says Philip Shaw, chief economist at Investec in London. “Momentum in wages and employment is strong, and so is the store of high savings.” And Shaw adds: “We are still looking for the pound to rise, especially against the US dollar.” And “from a currency perspective, we see the most likely scenario is that the pound will rebound after its weakness since the beginning of the year.”

Accordingly, Investec expects the GBP/USD exchange rate to trade at 1.30 at the end of 2022 and 1.37 at the end of 2023. Investec expects the EUR/GBP to trade at 0.85 at the end of 2022 and 0.84 at the end of year 2023.

According to the technical analysis of the pair: By observing the recent performance of the GBP/USD currency pair, we find that the attempts to rebound upwards lack the momentum to get out of the vicinity of the current general bearish trend. It is the closest to returning to the 1.2480 support level, which motivates the bears to move further downwards. As I mentioned before, the sterling dollar will not have the strongest opportunity for a trend reversal without breaching the 1.3000 psychological resistance.

Today’s economic calendar is devoid of important British economic data, only the US jobless claims will be announced.

Despite the strength of the US labor market numbers, the price of the EUR/USD currency pair is trying to stabilize above the resistance 1.0700. In an attempt to maintain the formation of an ascending channel that was formed recently there were quick signals from the European Central Bank about the future and date of raising European interest rates. The European Central Bank has recently primed markets for a pending rise in interest rates, and chief economist Philip Lane recently suggested that it could now look to “validate” market expectations with actions, although this could have a mixed blessing on the exchange rate.

Central bankers in Europe have been engulfed in an ongoing debate within the Governing Council over whether to raise the negative deposit rate in a typical increase of 0.25% or on a larger scale of 0.50% after the expected end of the ECB’s remaining quantitative easing program days later.

This is the background against which the next round of forecasts will be revealed, and the context in which they are likely to be evaluated by the markets.

“It is strong that the initial steps in normalization have been taken to validate the tightening that has already occurred in many financial markets,” ECB chief economist Philip Lane reportedly told the Center for Economic Policy Research (CEPR) in Paris. But this observation is ambiguous in terms of its implications for the potential size of the expected July increase in key ECB interest rates and partly because of the underlying uncertainty in financial markets about the exact size that such a move might be.

Financial markets have so far shifted to a 0.35% increase in the deposit rate, which is the rate that commercial banks charge to deposit funds with the European Central Bank, in July of this year, and there is a risk that expectations will rise after next Thursday’s policy decision. “The ECB is priced at 180 basis points in rate increases through the end of 2023, just like the Fed, yet it’s hard to see the ECB moving,” says Richard Vranulovic, Sydney-based FX analyst at Westpac. from the soles of the feet.”

“The European Central Bank is sure to disappoint expectations, as the region faces more material hardships as sanctions on Russian energy supplies continue to gradually tighten,” the analyst added.

The publicly broadcast ECB policy talk has helped lift the euro from nearly five-year lows in recent weeks and has also sent European yields up sharply. But for the euro, it is possible, if not likely, that market expectations will soon reach levels that the ECB will find difficult to achieve, perhaps as soon as next Thursday’s decision, depending on how financial markets interpret the new forecast.

Jeremy Stretch, forex analyst at CIBC Capital Markets says: The risk to EUR/USD may be that by the time of the eagerly anticipated interest rate decision in July, expectations may be high enough to leave the ECB in a position to be disappointed. However, market disappointment with the eventual delivery of the European Central Bank’s monetary policy measures is not the only risk facing the Euro. Other factors include oil prices and their tendency to rise whenever and wherever the euro rises or the dollar falls, which raises manufacturing costs for companies and can significantly raise inflation worldwide.

According to the technical analysis of the pair: On the daily chart, the price of the EUR/USD currency pair is still at the beginning of breaking the bearish trend, and it still needs more momentum to strengthen the opposite channel that was formed recently. As I mentioned before, the EUR/USD price will need to move towards the resistance levels 1.0795 and 1.1000 to confirm the bullish reversal. On the other hand, bullish expectations may be negatively affected by the euro-dollar’s move towards the support levels of 1.0640 and 1.0555, respectively.

I expect the euro-dollar movements to calm down until the European Central Bank’s policy decisions are announced next Thursday.

The euro took a hit amid another hike in natural gas prices, this time on news of new moves by Russia to restrict supplies to Europe. Accordingly, the price of the EUR/USD currency pair fell to the lowest support level of 1.0349 for the most popular currency pair in the forex market, and closed last week’s trading, stable around the 1.0407 level, in light of the continuation of the downward trend.

After the recent sharp losses, expectations have increased that the EUR/USD is on course to test parity according to current trends, some analysts say, but losses were also notable against the British pound and most other G10 currencies. Thus, the incurring of euro losses everywhere confirms that the currency is affected by special factors. Natural gas prices in Europe have recently risen after news of Russia’s imposition of sanctions on energy companies, specifically a major Polish pipeline, which may lead to increased pressure on supplies to Europe.

Russia imposed sanctions on EuRoPol GAZ SA, the owner of the Polish part of the Yamal-Europe gas pipeline.

Russia has also imposed sanctions on units of Gazprom Germania and dozens of other companies located in countries that have imposed sanctions against Russia in response to its invasion of Ukraine. 31 companies were listed on May 11 by the Russian government and are now banned from conducting transactions and entering Russian ports.

Gas prices are up, and markets are trading deep in the red, with Germany’s DAX down more than 2.0%. Commenting on this, Kit Juckes, FX Analyst at Société Générale says, “The bottom line is that we cannot accurately price the risk of disruption to gas supplies in Europe, but if it did, the risk of a break in the EUR/USD parity would be significant, and this maintains motivation Naturally, to start selling in the long term in euros.”

It was also reported that the flow of Russian gas in a major pipeline to Europe via Ukraine had been disrupted by the withdrawal of Russian occupying forces, according to the operator of the Ukrainian gas network. For its part, the Ukrainian Gas Transmission System Operating Company (JETSO) said that gas flows stopped from seven in the morning last Wednesday at the Sukhranivka point, through which a third of the Russian gas that passes through Ukraine passes.

The operator said that the reason was that it had lost control of the equipment in the occupied territories. “With the eurozone economy highly dependent on Russian gas and oil, we expect the euro to be the hardest hit currency in the G10 due to the war in Ukraine,” says economist Claudio Wewill of J. Safra Sarasin, a Swiss private bank and wealth manager. And although gas prices in the UK are also rising, reports indicate that Britain has an “unprecedented glut of LNG”, that gas shipped from the US and the Middle East. It is discharged at British ports in liquid form, gasified, and then sent to Europe via interconnected pipelines.

This means that Britain’s gas supplies for next day delivery fell to their pre-energy lows sometime this week before the news of Russian sanctions. The Times reported that demand for gas in Britain has fallen as the temperature has risen and there is not enough pipeline capacity to carry all the gas that has reached mainland Europe where it is needed.

According to the report, LNG shipments are arriving at terminals in Britain with the aim of transporting it across the national grid and to Europe via subsea pipelines.

According to the technical analysis of the pair: The general trend of the EUR/USD currency pair is still bearish. Investors do not care about the arrival of technical indicators towards oversold levels. The continuation of the pressure factors on the currency pair that I mentioned a lot, is represented in the disparity in economic performance and the future of monetary policy tightening between The Federal Reserve Bank and the European Central Bank.

The closest bears targets for the EURUSD price is to move towards the support levels 1.0325 and 1.0200 and then the parity price. On the other hand, according to the performance on the daily chart, breaking the resistance 1.0800 will be important in changing the trend

During the middle of this week’s trading, the euro’s exchange rates rose against the rest of the other major currencies, with the expectation that the European Central Bank’s interest rates would rise. This could lead to increased demand. In the case of the EUR/USD, the currency pair moved towards the resistance level of 1.0866 before settling around the 1.0850 level at the time of writing the analysis. It is waiting for more momentum to complete the opportunity for an upward correction. The euro-dollar pair’s recent losses brought it to the 1.0760 support level.

Commenting on the future of the ECB’s policy tightening, Martins Kazak, a member of the ECB’s board of directors and president of the Central Bank of Latvia, says that a rate hike may come as soon as July. The call will renew the European Central Bank’s expectations of an interest rate hike and support for the euro in the forex foreign exchange market, which largely focuses on the various monetary policy positions of global central banks.

Member Kazaks said a rate hike is possible in July because the ECB’s commitment to a “gradual” approach to raising rates “does not mean a slow response.” He added that the ECB does not need to wait to see stronger wage growth before raising the key lending rate above -0.5%.

Overall, the European Central Bank is currently committed to ending QE in the third quarter, which suggests that ending QE may fall near or at the same time as an interest rate hike. The euro has been hampered by the European Central Bank’s slow journey towards raising interest rates to record lows, with markets expecting a 65 basis point hike in 2022 ahead of Kazak’s statement.

Expectations are likely to rise after these statements and this is evident in the bullish movement in the EUR.

The euro has fallen in the wake of last week’s European Central Bank policy update that offered no hint that interest rate increases were imminent, ensuring the central bank remains on the slow track in the global race to try to avoid rising inflation. The ECB’s guidance was largely unchanged in the March update, and therefore it was disappointed against the growing expectation that policymakers in Frankfurt would lay greater ground for a rate hike in 2022.

 

Commenting on this, Chris Wilgus, global markets analyst, Crown Agents said, “Inflation is of course an ongoing concern, but the ECB has not signaled an end to bond purchases and has stated that it will continue to buy assets even after they start raising interest rates. The euro fell, indicating that the European Central Bank may be behind the curve.

 

The European Central Bank said in a statement that inflation has increased significantly and will remain high over the coming months, “mainly due to the sharp rise in energy costs” indicating that it was not yet overly concerned about the emergence of broader price pressures in the economy. Kazak’s comments will raise questions about whether a rethink of the central bank is really underway. It is only natural that further developments of this kind will support the EUR.

Recently, a new study found that the dollar’s rise will bring some upside, indicating that the EUR/USD exchange rate has not finished falling. According to Alex Kuptsikevich, chief market analyst at FxPro, the dollar could be in the middle of the current bullish trend cycle and EUR/USD could be on track to parity as a result.

Kuptsikevich’s research found that the last time the dollar was at that level against a basket of the six most popular currencies was in April 2017 (except for a short period of stock market panic in March 2020). “The dollar index has peaked in the 103-104 region either way and has not traded consistently higher for the past 20 years,” Kuptsikevich adds in a recent note. The dollar index – a broader measure of the dollar’s strength based on its performance against a basket of major currencies – moved this week above the 100 mark. At the same time, the EUR/USD fell below 1.08; Further gains in the dollar index are sure to be reflected in the EUR/USD given that this is the largest component of the basket.

 

According to the technical analysis of the pair: There is no change in my technical view of the performance of the EUR/USD currency pair. The general trend is still bearish and attempts to correct upwards are still weak. The closest to psychological support is still 1.0800, which confirms the extent to which the bears control the performance and return without it, warning of a bearish move. As mentioned before, there will not be a strong attempt to rebound higher without breaching the 1.1200 resistance, and so far, the Eurodollar gains will remain subject to selling as long as the factors of weakness persist.

Today, inflation figures will be released in the Eurozone. From the United States, the number of jobless claims and the reading of the Philadelphia Industrial Index, then expected statements by European Central Governor Lagarde and Federal Reserve Bank Governor Powell

In the first half of last week’s trading, the price of the GBP/USD currency pair succeeded in rebounding higher with gains to the resistance level 1.3147. This is due to the investors’ balancing of the future of raising interest rates where the factors were in favor of the dollar. It returned the currency pair to the vicinity of its broader descending channel and stabilized around the support level 1.3050 at the beginning of this week’s trading. The performance of the currency pair has often been noted on the possibility of its occurrence, especially with the Bank of England abandoning the markets’ bets for a strong future to tighten its policy during the year 2022, in second place after the US Federal Reserve.

On the economic side, the GBP/USD currency pair is trading influenced by the announcement that the US Retail Sales Monitoring Group on Thursday posted -0.2% decline for the month of March compared to the expected 0.1% growth. General retail sales for the period grew 0.5% compared to the expected growth rate of 0.6% (MoM), while retail sales ex-autos increased 1.1% (MoM) versus market estimates of 1%. Prior to that, the US PPI was reported to outperform both the (monthly) and (annual) forecasts, while the equivalent CPI data missed estimates in both cases.

From the UK, the general CPI for March beat expectations (y/y) at 6.7% with a change of 7%. The EQ (MoM) also beat expectations at 0.7% by 1.1%, while core CPI for the period beat the estimate (YoY) of 5.4% with a change of 5.7%. Elsewhere, the output of the core CPI price, the producer price index and the retail price index beat expectations across all sectors.

Overall, the British pound reversed losses in early April against the dollar and the euro after a significant rally in mid-trading last week and there is evidence that this show may have originated in Beijing and was part of an effort to prevent a lower euro from raising the trade-weighted renminbi. Sterling remained close to April highs against the dollar and euro last Thursday after a rally late on Wednesday that had no clear catalyst to spark it but likely reflects an attempt to prevent or perhaps even reverse a trade-weighted renminbi appreciation.

Policymakers in Beijing have often sought a depreciation in the trade-weighted renminbi throughout the roughly two-year period of the currency’s rally, something that is likely to have widespread repercussions for others including the pound, dollar, euro, yen and Swiss franc. While noting first of all that an upward corrective shift in the long downtrend of the USD/CAD exchange rate is likely to rise in the future, this could also have broadly bullish implications for the likes of USD/CHF and USD/JPY and impacts variable on sterling.

According to the technical analysis of the GBP/USD: In the near term and according to the performance of the hourly chart, it appears that the GBP/USD currency pair is trading within a solid triangle formation. This indicates that there is no clear directional momentum in the market sentiment. Therefore, the bulls will target potential ascending triangle breakout profits at around 1.3073 or higher at 1.3094. On the other hand, the bears will target short-term pullbacks at around 1.3036 or lower at 1.3016.

In the long term and according to the performance on the daily chart, it appears that the GBP/USD currency pair is trading within the formation of a descending channel. This indicates a significant long-term bearish momentum in market sentiment. Therefore, the bears will look to ride the current downtrend towards 1.2968 or lower to 1.2839. On the other hand, the bulls will target channel breakout profits at around 1.3192 or higher at 1.3371.