The European Central Bank (ECB) has raised interest rates by 25 basis points, marking its tenth consecutive rate hike since July 2022 and bringing the total increase to 450 basis points. The ECB is primarily concerned about high inflation levels, both current and projected, with concerns extending into the future.
Trading plan for July 25
2019-11-11 • Updated
It’s a forecast for July 25.
- The US dollar index has been failing to stick above $94.50. It needs additional support from economic data. However, no data will be released on Wednesday. As a result, if the index closes below $94.50 on Tuesday, there is a risk of the fall further down. The support will lie at $94. Otherwise, there will be chances that the index will move up to $95.
- Wednesday is an important day for the Australian dollar. CPI and trimmed mean CPI data will be out at 4:30 MT time. The forecast is mixed. If the actual data are greater than the forecast ones, the Australian dollar will be able to appreciate. Up to now, AUD/USD has been moving up. The pair has broken above the pivot point at 0.7390. If the pair is able to close above the pivot point, there are odds of the further rise to 0.7465 (50-day MA). If the data aren’t encouraging, the pair will be below the pivot point. The support lies at 0.7340. MAs are moving down that is a negative signal for the pair. The Australian dollar needs really strong economic data to be able to stick above the pivot point.
- The oil market has been recovering after a great plunge that happened last week. Both oil benchmarks are trading above the pivot points that is a positive signal for the further movements. However, economic data will determine the further direction of Brent and WTI. The crude oil inventories figure will be out at 17:30 MT time. Last week the data showed a surplus in the number of barrels held in inventory. It caused a further fall of the oil market. Therefore, if the actual data is greater than the forecast and shows a surplus again, Brent and WTI will suffer. Otherwise, they will be able to keep recovering.
Brent has been trading above the pivot point at $73.15. If the data is supportive, Brent will move to the resistance at $75.15. Otherwise, there are risks of the fall below $73.15. The support will lie at $71.
WTI has been trading above the pivot point at $67.25. However, 50-day and 100-day MAs keep the benchmark within the channel of $67.25-69. The economic data will be able to pull WTI up or down. In case of a decline in the data, the price will go up to the resistance at $71.75. Otherwise, the price will break below the pivot point and will move to the support at $63.65 (200-day MA).
The upcoming August inflation data may send mixed signals. The 12-month headline inflation rate is expected to rise to 3.6%, causing concerns for the Biden administration. However, core inflation, which excludes food and energy prices, is projected to decrease to 4.3%, aligning with the Federal Reserve's goals. Past price trends influence both figures, so looking at recent data for a more accurate picture is crucial.
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