The Fed made a hawkish surprise! The bank would start a discussion about scaling back bond purchases. Besides, it is likely to make two interest-rate increases by the end of 2023 (sooner than expected)!
Market updates on July 12
Key events ahead:
US PPI - 15:30 MT
Higher figures will be positive for the USD.
- Yesterday, the levels of US CPI and core CPI outperformed the expectations. The headline indicator increased by 0.1%, while its core level advanced by 0.3%. Positive figures brought short-term optimism to the USD bulls, however, the dovish Fed Chair continued to affect the greenback the most. EUR/USD has bounced from the 1.1280 level (38.2% Fibo) to the support at 1.1244 but managed to recover with the rise above the 200-period SMA. Bulls need to push the pair above the 1.1280 level to the next resistance at 1.1290 to confirm their strength. From the downside, pay attention to the 1.1257 and 1.1244 levels.
- Gold fell to the 100-period SMA on the release. If the USD continues to weaken today, the yellow metal will test the $1,415 level. If it’s broken, the further rise will be limited by the $1,424 level. On the other hand, if the USD gets stronger, the yellow metal may fall to the $1,402 and lower, to the $1,391-1,385 levels.
The Federal Reserve will release its statement and announce its interest rate decision at 21:00 MT time. Then, at 21:30 MT time, the central bank will hold a press conference.
Bitcoin has broken above $41,000 for the first time since late May. Follow US Retail Sales at 15:30 MT time!
The Bank of England will release its statement and announce its monetary policy decision at 14:00 MT.
Last week the USD soared versus other major currencies, while gold headed for the biggest weekly loss in 15 months. Let’s see what new moves await us this week!
The US dollar has surged to levels unseen since April after the Fed's decision back on Wednesday. Gold has reversed up from the local dips. Still, this week was the worst for gold in more than a year.