Will the CPI Crash the USD?
The most impactful releases of this week will fill the market with volatility and sharp movements. Be ready to take action!
Market updates on July 31: the Fed decision
Key events ahead:
ADP Non-farm employment change for the US – 15:15 MT (12:15 GMT) time
Canadian GDP – 15:30 MT (12:30 GMT) time
FOMC statement – 21:00 MT (18:00 GMT) time
FOMC press conference – 21:30 MT (18:30 GMT) time
- The market is trading cautiously ahead of the Fed monetary policy statement at 21:00 MT time. On H4, EUR/USD is consolidating between the resistance at 1.1158 and the support at 1.1132. If the rate cut happens today, the USD will weaken. In that case, the break of the 1.1158 level will happen and the next resistance level will lie at 1.1174. After that, pay attention to the 1.1198 resistance level. If the Fed chair surprises the market with no changes to the interest rate, the pair will slide below the 1.1132 level to the next support at 1.1116. If this level is broken, the euro will fall towards the 1.1086 level. If we look at MACD we can see that it is placed closed to the 0 level, which signals a possible reversal.
- GBP/USD stopped falling and started to wait for the Fed to determine its further direction. If the Fed is dovish, the cable may break the 1.2168 level and target the next resistance at 1.2197. After that, bulls may push the pair higher to the 1.2225 level. In the case of the Alternative scenario, GBP/USD will move below the support at 1.2145. The next support will lie at 1.2118. If the pair manages to overcome this level, the further fall to the 1.2017 level may happen on the fears of a no-deal Brexit.
- USD/JPY has been trading sideways, too. After the end of a new round of US-China trade negotiations, Chinese policymakers said that the US needs to show enough sincerity in reaching a deal. The news pulled the USD/JPY pair lower during the Asian trading session. Now all eyes are on the Fed decision. If the rate cut is confirmed, the pair will fall below the 108.51 level. The next support will lie at 108.45. After that, the pair may reach the 108.33 level. From the upside, pay attention to the upper border of the consolidation range at 108.64-108.7. The next key level for bulls lies at 108.8.
- The FOMC statement will show whether the uptrend for gold will continue. On H4, the yellow metal has been knocking the resistance at $1,433. If it’s broken, the next resistance level will lie at $1,438. After that, the price for gold may reach $1,448 level. In case of the supported US dollar, the levels at $1,428, $1,424 (50-period SMA) and $1,420 will be in focus.
Similar
Three Currencies to Watch This Week
We prepared an outlook of major events of this week. Check it and be ready!
The Fed won't miss these releases!
Here you'll find what awaits the market this week, from the CPI release to a possible gold plunge.
Latest news
Gold Rises as Central Banks Buy More
About 24% of global central banks intend to increase gold reserves in 2023. Rising inflation, geopolitical turmoil, and worries about interest rates are reasons to increase gold reserves.
US Evades Default This Time
Greetings to a brand new week full of events, economic releases and US debt frictions. We are here to tell you everything you need to know!
USD Gains Momentum
The US dollar index breaks one resistance after another. Read the report to learn the next target for the US dollar index!
