For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for July 18
Early on Tuesday, the US dollar index was weak, however, it managed to recover and surge above the psychological level at $94.50. If the index is able to close above this level, the further rise will be more likely. Tuesday and Wednesday are important days for the USD as the Chairman of the Fed Mr. Powell presents the Monetary Policy Reports (17:00 MT time). If Mr. Powell sounds hawkish, the US dollar index will be able to stay above $94.50 and the next resistance will lie at $95. Otherwise, the index will appear below $94.50. The next support is at $94.
The pound couldn’t stick above the pivot point at 1.3235 as the USD has strengthened. Up to now, GBP/USD has been trading near 1.3155. On Wednesday, traders will take into consideration CPI, PPI input data (11:30 MT time). The forecast is mixed, so, if the actual data are greater than the forecast ones, the pound will have chances to recover. Resistances are at 1.3235 and 1.3180. Otherwise, risks of the further fall are high. The support is at 1.31.
Brent and WTI are strongly suffering. On Monday, both oil benchmarks plunged on the negative news about the increased global supply and a slowdown in the economic growth. As a result, Brent fell to the lowest levels since the middle of April, WTI plunge to the lowest level in three weeks. Tomorrow traders will look at the crude oil inventories data (17:30 MT time). If the decline in the number of inventories is greater than anticipated, Brent and WTI will have chances to recover. Otherwise, the further fall is anticipated. Brent has been trading near $71.80. Positive data will pull it up. The resistance is at $73.10 (100-day MA) and the next resistance will lie at $75.65. Otherwise, there will be a risk of the fall to $68.80. WTI is trading near the 100-day MA at $67.10. Positive news will pull WTI to the resistance at $68.30. The further resistance is at $69.35. Otherwise, WTI will break the support at $67.10 and will fall further to $66.
The oil prices have declined this week after the new Omicron strain was identified. What should we expect next from oil?
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.