GBP/USD Continues to Navigate Down
And it remains bearish, targeting $1.23.
Short-Term Price Action Sub $1.24
Despite efforts to shape support from the $1.24 region, recent hours witnessed price elbow beneath the psychological level. This followed a near-pip-perfect H1 AB=CD harmonic bearish formation taking form at $1.2467 (denoted by a 100% projection ratio), a base that was bolstered by a H1 trendline support-turned-resistance taken from the low $1.2392. Downside support can be seen nearby at $1.2356, with a break paving the way for follow-through selling towards $1.23.
GBP/USD is losing ground as traders react to inflation reports from UK. Inflation Rate declined from 10.1% in March to 8.7% in April, compared to analyst consensus of 8.2%. Core Inflation Rate increased from 6.2% to 6.8%, so the BoE will have to raise rates at the next meeting to fight inflation.
In case GBP/USD settles below the support at 1.2345, it will move towards the next support level at 1.2300. A successful test of this level will push GBP/USD towards the support at 1.2275.
R1:1.2370 – R2:1.2410 – R3:1.2440
S1:1.2345 – S2:1.2300 – S3:1.2275
View from Higher Timeframes Show Scope for Further Downside
The bigger picture continues to put forth a bearish bias. The weekly timeframe recently tested a major long-term trendline resistance drawn from the high of $1.4250, placing weekly support at $1.1851 in view as a potential long-term support target.
Aiding the weekly timeframe’s resistance, an additional layer of resistance made its way into the frame at $1.2638 on the daily chart in mid-May. This has positioned daily support at $1.2272 on the radar and pulled the Relative Strength Index (RSI) south of the 50.00 centreline towards indicator support at 37.78.
In the United Kingdom, the most important categories in the consumer price index are Transport (16 percent of the total weight) and Recreation and Culture (15 percent). Housing, Water, Electricity, Gas and Other Fuels accounts for 13 percent; Restaurants and Hotels for 12 percent and Food and Non-alcoholic Beverages for 10 percent. The index also includes: Miscellaneous Goods and Services (9 percent); Clothing and Footwear (7 percent); Furniture, Household Equipment and Maintenance (6 percent). Alcoholic Beverages and Tobacco; Health, Communication and Education account for remaining 11 percent of total weight.
The consumer price inflation in the UK fell to 8.7% year-on-year in April 2023, the lowest since March 2022, due to a sharp slowdown in electricity and gas prices. Still, the inflation rate exceeded market expectations of 8.2% and remained well above the Bank of England's target of 2.0%. Housing & utilities inflation dropped to 12.3% from 26.1% in March, with the cost for electricity, gas & other fuels increasing 24.3%, compared with 85.6% the month before. Prices have also advanced at a slower pace for restaurants & hotels (10.2% vs 11.3%) and furniture, household equipment & maintenance (7.5% vs 8.0%). Meanwhile, food & non-alcoholic beverages inflation remained close to March's record high (19.0% vs 19.1%), while cost accelerated for transport (1.5% vs 0.8%), recreation & culture (6.3% vs 4.6%) and miscellaneous goods & services (6.8% vs 6.7%). The core rate, which excludes food and energy, jumped to 6.8%, the highest since March 1992 and above well forecasts of 6.2%.
Given the scope to post additional underperformance, GBP/USD is likely to cross beneath H1 support from $1.2356 and target $1.23, followed by daily support mentioned above at $1.2272. A H1 close lower, therefore, could ignite breakout selling.
Short-Term Price Action Sub $1.24
Despite efforts to shape support from the $1.24 region, recent hours witnessed price elbow beneath the psychological level. This followed a near-pip-perfect H1 AB=CD harmonic bearish formation taking form at $1.2467 (denoted by a 100% projection ratio), a base that was bolstered by a H1 trendline support-turned-resistance taken from the low $1.2392. Downside support can be seen nearby at $1.2356, with a break paving the way for follow-through selling towards $1.23.
GBP/USD is losing ground as traders react to inflation reports from UK. Inflation Rate declined from 10.1% in March to 8.7% in April, compared to analyst consensus of 8.2%. Core Inflation Rate increased from 6.2% to 6.8%, so the BoE will have to raise rates at the next meeting to fight inflation.
In case GBP/USD settles below the support at 1.2345, it will move towards the next support level at 1.2300. A successful test of this level will push GBP/USD towards the support at 1.2275.
R1:1.2370 – R2:1.2410 – R3:1.2440
S1:1.2345 – S2:1.2300 – S3:1.2275
View from Higher Timeframes Show Scope for Further Downside
The bigger picture continues to put forth a bearish bias. The weekly timeframe recently tested a major long-term trendline resistance drawn from the high of $1.4250, placing weekly support at $1.1851 in view as a potential long-term support target.
Aiding the weekly timeframe’s resistance, an additional layer of resistance made its way into the frame at $1.2638 on the daily chart in mid-May. This has positioned daily support at $1.2272 on the radar and pulled the Relative Strength Index (RSI) south of the 50.00 centreline towards indicator support at 37.78.
In the United Kingdom, the most important categories in the consumer price index are Transport (16 percent of the total weight) and Recreation and Culture (15 percent). Housing, Water, Electricity, Gas and Other Fuels accounts for 13 percent; Restaurants and Hotels for 12 percent and Food and Non-alcoholic Beverages for 10 percent. The index also includes: Miscellaneous Goods and Services (9 percent); Clothing and Footwear (7 percent); Furniture, Household Equipment and Maintenance (6 percent). Alcoholic Beverages and Tobacco; Health, Communication and Education account for remaining 11 percent of total weight.
The consumer price inflation in the UK fell to 8.7% year-on-year in April 2023, the lowest since March 2022, due to a sharp slowdown in electricity and gas prices. Still, the inflation rate exceeded market expectations of 8.2% and remained well above the Bank of England's target of 2.0%. Housing & utilities inflation dropped to 12.3% from 26.1% in March, with the cost for electricity, gas & other fuels increasing 24.3%, compared with 85.6% the month before. Prices have also advanced at a slower pace for restaurants & hotels (10.2% vs 11.3%) and furniture, household equipment & maintenance (7.5% vs 8.0%). Meanwhile, food & non-alcoholic beverages inflation remained close to March's record high (19.0% vs 19.1%), while cost accelerated for transport (1.5% vs 0.8%), recreation & culture (6.3% vs 4.6%) and miscellaneous goods & services (6.8% vs 6.7%). The core rate, which excludes food and energy, jumped to 6.8%, the highest since March 1992 and above well forecasts of 6.2%.
Given the scope to post additional underperformance, GBP/USD is likely to cross beneath H1 support from $1.2356 and target $1.23, followed by daily support mentioned above at $1.2272. A H1 close lower, therefore, could ignite breakout selling.
Note
The dollar has been trading a little firmer despite the impasse in US debt-ceiling negotiations. Bulls seem to be drawing strength from hawkish Fed speakers and technical forces. Prices have turned bullish on the daily charts with support found at 103.00. The upside momentum has already taken prices towards 103.80 with 104.00 the next key level of interest.EUR/USD Breakdown Alert?
The EURUSD remains bearish on the daily charts with bears grinding down the 1.0760 support level. A solid daily close below this point could signal a decline toward 1.0686. Should bulls push back above 1.8110 – where the 100-day SMA resides, this could open a path back toward 1.0845 and 50-day SMA at 1.0900.
Note
Selling Pressure,Weakenning of UsDollar, thats good for Euro. Strong Euro is GOOD,no VERY GOOD for SP500;NASDAQ;DOW JONES; GOLD;BITCOIN;CRYPTOS: Everything against Dollar.Look also my NVIDIA Forecast Chart performed: Nailed it! Weak US DOllar also good for Tech Stocks, Bio Pharma and Tech have Highly positive correltions with Bitcoin and Ethereum, and vice versa. NVIDIA : Top Performer
Friday is the Big Day of the Week: aND IT WILL BE VERY BUISY. RGHT AFTER THE bELL PMI and Inflation DATA!
Note
Market UpDATES:NASDQ100 US100 and Indices Sky Rocketing after FED pivot reates cooling
Nasdaq breaking 14055 easily as forecasted in my analysis : Next Target 14350
NVIDAI Sky ROCKETING(Watch als my other Forecasts USD/US100/USDJPY/GOLD/EURO- Related Markets)
Godl Found More Buyers on support.More Bullish Delat coming in nEXT TO 2000USD)
Medium-term price action on the daily chart exhibits scope to extend losses. The longer-term ascending channel is interesting (drawn from $1,641 and $1,959). Note that price action FAILED to touch gloves with the upper boundary in recent trading, pencilling in highs just ahead of the all-time high of $2,075.
Investment Sentiment rising higher from Lows:More Bulls
The Key Fed Inflation Rate Is Cooling At Pivotal Time For The S&P 500
EURO/USD Taking Profits +More Bulls Accumulation and Buying Pressure /Support 1,4075
Note
Biden and House Speaker McCarthy reached an agreement on Saturday and the House vote is expected to take place on Wednesday. However, several Republicans have stated that they will not vote in favor of it. Most Ai stocks were still up after Nvidia rose as much as 4% earlier in the session, briefly hitting a $1 trillion market cap. Tesla also held gains after Elon Musk told Chinese foreign minister Qin Gang that he was willing to expand business in the country. On the other hand, energy stocks were among the worst performers dragged down by a 4% decline in oil prices.Note
After a spectacular run of outperformance since February, UK macro data have generally underwhelmed since mid-May, according to the Economic Surprise Index. Nevertheless, the strong-than-expected data since the start of the year has prompted upgrades to the economic outlook for the current year. Meanwhile, the slower-than-expected moderation in UK inflation in April has raised the odds of a Bank of England (BOE) rate hike this month.BOE hiked its benchmark rate by 25 basis points in May after pausing in April, and the market is pricing in almost four rate hikes by the end of the year, taking the terminal rate to 5.41% from 4.50% currently. The next week bring UK jobs, GDP, and manufacturing output data ahead of the BOE meeting on June 22, which could stir things up a bit for GBP. Until then, the pound could be due for a breather after a spectacular run against some of its peers.
Note
US Dollar Index: DXY fades recovery below 104.00 on downbeat Fed bets, US inflation eyedUS Dollar Index struggles to extend the previous day’s corrective bounce off three-week low, snaps two-day winning streak.
Markets remain nearly sure of witnessing no rate hike from Fed in June but concerns about July stay dicey.
Bond market moves, challenges to sentiment prod DXY bears ahead of the key US CPI.
Core CPI will be closely observed as high inflation can allow FOMC to remain hawkish despite no rate hike decision.
US Dollar Index (DXY) remains pressured around 103.60 as it fades the previous two-day winning streak on Tuesday as the key US inflation data looms. That said, the greenback’s gauge versus the six major currencies rose in the last two consecutive days amid the market’s positioning for the Federal Reserve’s (Fed) pause to the rate hike trajectory. However, the recently mixed concerns about the US central bank’s future moves join the challenges to the sentiment to prod the DXY buyers ahead of an important data point for the markets.
It’s worth noting that a study from the San Francisco Fed about the correlation between wage growth and inflation could be cited as the reason for the US central bank to remain less hawkish, which in turn weighs on the DXY, apart from the pre-data anxiety. The survey concluded that wage growth has a very small impact on inflation, which in turn raises doubts about the central bankers’ emphasis on wage cost numbers as a source of information to gauge inflation pressure.
Talking about the latest challenges to sentiment, a trade dispute is developing after the US expands its ban on imports from Xinjiang. China vows to protect China firms against any US sanctions, per Reuters. Recently, Bloomberg released prepared remarks of US Treasury Secretary Janet Yellen’s scheduled Testimony in front of the House Financial Services Committee as she said that the International Monetary Fund (IMF) and the World Bank (WB) serve as important counterweights to nontransparent, unsustainable lending from others, like China.
Additionally, the increase in the bets favoring the Federal Reserve’s (Fed) 0.25% rate hike in July also prod optimism and put a floor under the US Dollar Index. It should be noted that the CME’s FedWatch Tool suggests nearly limited scope for the US central bank to act on Wednesday’s Federal Open Market Committee (FOMC).
Looking ahead, the US Consumer Price Index (CPI) figures for May will be in the spotlight as the Fed decision looms on Wednesday. That said, the market forecasts of witnessing no change in the Core CPI MoM figure of 0.4% gain major attention as softer figures could push back the July rate hike concerns and may not allow the Fed to sound hawkish, which in turn can drown the US Dollar.
Note
GBPUSD bounced from just above good support at 1.2290/80 in severely oversold conditions which was as expected.The pair beat minor resistance at 1.2360/70 but a short position at 1.2390/1.2400 worked perfectly with a high for the day exactly here & a nice tumble to my targets of 1.2340 & 1.2320. A low for the day exactly here in fact.
Could hardly have been more accurate on the levels for GBPUSD last week.
Again shorts at 1.2390/1.2400 should stop loss above 1.2420.
Targets: 1.2340 & 1.2320.
I am not going to suggest a long as I think there is a good chance we will continue lower this week. Watch for a break below the 100 day moving average at 1.2290/80 to trigger further losses despite severely oversold conditions.
Note
US Dollar Index: DXY licks US inflation-inflicted wounds at three-week low above 103.00 on Fed dayUS Dollar Index grinds near the lowest levels in three weeks after snapping two-day winning streak.
US inflation data bolsters market’s bets on Fed’s status quo and weigh on the DXY despite upbeat yields.
Cautious mood ahead of the FOMC announcements put a floor under the US Dollar price.
Expectations of witnessing a hawkish halt from US central bank highlight qualitative updates from the Fed.
US Dollar Index (DXY) steadies above 103.00, after bouncing off a three-week low, as markets brace for the Federal Reserve (Fed) announcements on Wednesday. The greenback’s gauge versus six major currencies slumped the most in a week, to the lowest levels since May 22, after the US inflation data fuelled speculations of the US central bank’s halt to the rate hike trajectory present in the last 10 monetary policy meetings.
As per the latest US inflation data for May, the headline Consumer Price Index (CPI) drops more-than-expected and prior releases to 0.1% MoM and 4.0% YoY. However, the Core CPI, known as the CPI ex Food & Energy, matches 0.4% monthly and 5.3% yearly forecasts. It’s worth noting that the US headline CPI dropped to the lowest since March 2021 and hence justifies the market’s expectations of the US Federal Reserve (Fed) hawkish halt, which in turn should have weighed on the US Dollar.
Following the data, the CME’s FedWatch Tool suggests more than a 90% chance of the US Federal Reserve’s (Fed) no rate hike during today’s monetary policy meeting, versus around 75% chance before that.
It’s worth noting, however, that the ex-Fed Officials have been pushing for a hawkish halt to the rate hikes and prods the DXY bears. On Tuesday, Former Dallas Federal Reserve Bank (Fed) President Robert Kaplan said that he would support a "hawkish pause" at this week's meeting while also adding that he would “leave the question of a July hike open.” Previously, Ex-Boston Fed President Eric Rosengren tweeted, “Expect a hawkish skip this week.”
As a result, Wall Street benchmarks rose for the second consecutive day but the US Treasury bond yields remain firmer. That said, the US 10-year Treasury bond yields rose to a 13-day high of 3.83% whereas the two-year counterpart poked the highest levels in three months with 4.70% mark before easing to 4.67% in the last hours.
Looking ahead, the pre-Fed sentiment may prod the DXY, as well as allow the greenback’s gauge to pare recent losses. However, the traders will pay attention to the US central bank’s economic forecasts, dot-plot and Chairman Jerome Powell’s press conference for clear directions afterward, as the rate hike pause is almost given.
Note
European equity markets were set for a positive open on Friday, tracking global peers higher amid bets that US interest rates could be nearing their peak as the American economy loses momentum and after the Federal Reserve paused its tightening campaign in June. Meanwhile, the European Central Bank opted to raise interest rates by another 25 basis points, with ECB President Christine Lagarde saying ‘we are not thinking about pausing.” Investors now look ahead to final euro zone inflation figures and wage growth data for further clues on the economy and future monetary policy. DAX futures jumped 0.9%, Stoxx 600 futures gained 0.5% and FTSE 100 futures edged up 0.2% in premarket trade.Note
The Dow finished more than 100 points below the flatline on Friday, the S&P 500 and the Nasdaq lost nearly 0.4% and 0.7%, respectively, as investors continued to assess the outlook of monetary policy for the Fed amid a massive options expiration at the second 2023’s quadruple witching date. Among stocks, Microsoft fell 1.7% and Micron Technology dropped 1.7%. Conversely, Virgin Galactic surged 16.3% on plans for commercial space tourism. Tesla added 1.8% after hitting a 37-week high during the session and Adobe gained 0.8% with positive earnings and guidance. On the week, the Dow Jones added 0.9%, marking a three-week winning streak despite the Fed's warning of future rate hikes. The S&P 500 gained 2.2%, its fifth consecutive weekly gain, the longest since November 2021, rising 2.2%. The Nasdaq was up 2.7% for an eighth straight positive week. Markets will be closed on Monday for the Juneteenth holiday.Note
The Dow finished more than 100 points below the flatline on Friday, the S&P 500 and the Nasdaq lost nearly 0.4% and 0.7%, respectively, as investors continued to assess the outlook of monetary policy for the Fed amid a massive options expiration at the second 2023’s quadruple witching date. Among stocks, Microsoft fell 1.7% and Micron Technology dropped 1.7%. Conversely, Virgin Galactic surged 16.3% on plans for commercial space tourism. Tesla added 1.8% after hitting a 37-week high during the session and Adobe gained 0.8% with positive earnings and guidance. On the week, the Dow Jones added 0.9%, marking a three-week winning streak despite the Fed's warning of future rate hikes. The S&P 500 gained 2.2%, its fifth consecutive weekly gain, the longest since November 2021, rising 2.2%. The Nasdaq was up 2.7% for an eighth straight positive week. Markets will be closed on Monday for the Juneteenth holiday.Trade closed: target reached
trade closedNote
Fed Chair. Powell reiterated at the ECB Forum on Central Banking that interest rates will rise further and that he wouldn’t take moving in consecutive meetings off the table at all, but noted that a recession in the US is not the most likely case. Nvidia was down by over 2% and Advanced Micro Devices by 1% after the Wall Street Journal reported that the US government is considering new restrictions on exports of artificial intelligence chips to China. The Fed is also due to release the results of its annual stress tests to banks, and more details on Basel III Endgame and changes to bank supervision will be in the spotlight.The Dow Jones was down over 100 points and the S&P 500 dipped by 0.1% on Wednesday afternoon, on the prospect of further interest rate hikes following the Federal Reserve's chair Powell Speech at the ECB Forum. He said he does not see inflation reaching the Fed's 2% target any time soon. He reiterated that interest rates will rise further and did not rule out a boost in the cost of borrowing at the next policy meeting scheduled for the end of July. Meantime, the Nasdaq was up 0.2% powered by megacap momentum stocks. Among stocks, shares of Nvidia and Advanced Micro Devices were down by 2% and 1%, respectively, after the US government is considering new restrictions on exports of AI chips to China. Intel, Applied Materials and Qualcomm fell more than 2% each. On the other hand, Apple hit an all-time high of $189.8 during the session, while shares of Tesla and Alphabet advanced 1.4% and 2.5%. The Fed is due to release the results of its annual stress tests to banks.
Note
The US economy grew by an annualized 2% on quarter in Q1 2023, well above 1.3% in the second estimate, and forecasts of 1.4%. The updated estimates primarily reflected upward revisions to exports and consumer spending that were partly offset by downward revisions to nonresidential fixed investment and federal government spending. Imports were revised down.Trade closed: stop reached
trade closed
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.