Several largest American companies will publish their financial results this week. BTCUSD and XAUUSD are skyrocketing. What's going on in the markets?
CPI Wednesday: the Doomsday for EURUSD and GBPUSD?
Good Wednesday, fellow traders! Welcome to the US CPI Day. The markets promise to be volatile. Let’s check what we have on the agenda.
Key news for today
- Today, the United States will publish an update on Consumer Price Index at 15:30 GMT+3. There are two crucial metrics a trader should follow: headline and core CPI. The former is set to increase by 0.4%, while the latter (without food and energy prices) is forecast to rise by 0.3%. These releases will be crucial for the markets, as they will determine further steps by the Federal Reserve. The regulator clarified on May 3: “It will take data a dependent approach to determine the extent of further rate hikes.” So, Today’s data promises to be impactful. If the inflation data exceeds the forecasts, the USD may strengthen. Alternatively, it will go down.
- Gold keeps trading at its highs amid the fear of de-dollarization, global uncertainties, and the banking sector’s instability. Today, it will be affected by the CPI release. Watch the support zone from 1970-2000 and the resistance at 2070.
- The stock of Paypal fell 12% to the lowest level since 2017 after the company cut the outlook for its average adjusted margin. Today, we expect earnings from Robinhood and Disney.
- Bank of America lowered the forecast for Brent for 2023 from $88 to $80 due to the high Fed interest rate, debt ceiling crisis, and anticipated recession.
- Investment banks turn bullish on the British pound as Britain’s economic outlook has improved, despite widespread slowdown fears. Currently, GBPUSD is trading at the last May’s high of 1.2670.
- The meeting devoted to the debt limit between US President Joe Biden and Congress on Tuesday made little progress.
XAUUSD technical analysis
The metal is currently aiming at a retest of $2047. Bigger-than-expected CPI will pull the price down towards the ascending trendline and the support zone at $2000-2008. A break below this line will confirm a further slide toward the next support level at $1980. Otherwise, we will see a rise above $2047 and a further upside towards $2080.
Have a good trading day!
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