A woman buying olive oil at supermarket. Image source: dolgachov © 123RF.com
British Consumer Prices Expected to Ease in July
This week's economic releases in the UK and the U.S. are set to cause additional volatility to the undecided GBPUSD. The cable consolidated in a range last week in anticipation of the next big directional price movement.
In arguably the most impactful event scheduled to take place this week, the Office for National Statistics in the UK is due to release the latest inflation data on Wednesday.
According to the preliminary forecasts, headline inflation is likely to decrease for the first time in four months. Such a performance would reflect global tendencies of easing demand pressures.
UK MoM CPI. Image source: TradingEconomics.com
The consumer price index (CPI) was reported at 2.5 per cent in June, the highest level since August 2018, reflecting BOE's accommodative monetary policy stance. The market forecasts anticipate a marginal drop of 0.2 per cent in July, driving the index to 2.3 per cent.
The drop is projected despite the British economy's accelerating pace of growth that was observed in the second quarter. If these forecasts are met on Wednesday, this would likely pressure the sterling in the short term.
This same kind of dynamic was observed on the dollar last week, following the publication of the latest consumer prices data in the U.S.
U.S. Retail Sales to Continue Seesawing in July
The U.S. retail sales are expected to take another sizable downturn in July, following a positive 0.6 per cent rebound a month prior. The index is forecasted to contract by 0.2 per cent. The Census Bureau will release the survey findings on Tuesday.
U.S. MoM Retail Sales. Image source: TradingEconomics.com
In July, demand for goods took a hit juxtaposed to a stark increase in the aggregate demand for services. This change in the equilibrium was reflected by the sharp downturn in the price of crude oil over the same period.
As retail sales in the U.S. continue to seesaw over the summer months, so the dollar is likely to be affected by swift changes in demand, causing even more volatility on all currency pairs involving the greenback.
UK's Retail Sector to Show More Resilience
The latest retail sales data in Britain is also scheduled for publication this week, on Friday. However, the Office for National Statistics is forecasted to post much more robust numbers compared to the U.S. Census Bureau.
UK MoM Retail Sales. Image source: TradingEconomics.com
The market forecasts expect the index to remain flat at 0.5 per cent, recording no changes from a month prior. Even still, the anticipation surrounding the event is still likely to cause temporary fluctuations on the GBPUSD ahead of the closing of this weeks' trading session.
As can be seen on the 4H chart below, the underlying price action is already at a crucial turning point. It is concentrated just below the upper boundary of the descending channel, which is currently converging with the 50-day MA (in green) and the 100-day MA (in blue).
Additionally, these three resistances are also positioned quite close to the 23.6 per cent Fibonacci retracement level at 1.38857, meaning that a sizable breakout above the four is improbable in the foreseeable future.
This is further substantiated by the fact that the underlying buying pressure has already climaxed, as underpinned by the Stochastic RSI indicator.
However, the price action has also rebounded from the 38.2 per cent Fibonacci at 1.38255 on the two occasions that it probed this major support level, which means that the continuation of the broader downtrend is also far from certain.
GBPUSD 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
Other Prominent Events to Watch Out for:
Tuesday - FED Chair Powell Speaks; Australia RBA Meeting Minutes; UK MoM Unemployment Rate; EU Preliminary QoQ GDP Growth Rate.
Wednesday - New Zealand RBNZ Interest Rate Decision; Canada MoM CPI; FOMC Meeting Minutes.
Thursday - Australia MoM Unemployment Rate.
Friday - Canada MoM Retail Sales.
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
