Forex Signals Brief for July 18: Inflation in Focus
Rowan Crosby • 2 min read
Both forex and stock markets received a bit of a boost yesterday after we heard from US Federal Reserve Chairman Jerome Powell at his first day of testimony at Capitol Hill. The USD got a boost as did equity markets and traders will be looking for more of the same when the US session gets underway.
Our European counterparts will be looking a little closer to home and there are some important data points that will have a big impact on the GBP/USD and EUR/USD. And that’s CPI out of the Eurozone and UK.
The Eurozone, in particular, has been struggling with low inflation for many years now and we are only now starting to see a level that would leave ECB President Mario Draghi somewhat happy. We are looking at 2% for the annual figure which would be right at the bottom of what they might be hoping for. But a step in the right direction.
Meanwhile, the UK doesn’t appear to have the same concerns around inflation. But they continue to be bombarded by Brexit headlines that weigh on the Pound. It should be a busy day in Europe.
Forex Signal Update
The FX Leaders team put in an excellent performance on the trading desk on Tuesday. The guys found six winning signals and only the single loser. The commodities were very active as we might expect as well as the Yen crosses. Overall a really great session.
Bitcoin – BTC has finally cracked through the $6,800 mark and is on a rampage higher. If we pull back to support this might be the long entry we’ve been looking at.
Nikkei – The Japanese Nikkei along with most world equity markets at the moment are continuing to grind their way higher. Powell certainly helped give things a boost and there might be more in store. Look for a pullback here.
EUR/CHF – Active Signal
The EUR/CHF has been a great signal for us and we are back in another long position here. The trend is clearly to the upside and this is a classic pullback trade. This pair generally behaves quite well making it a good candidate for these types of trades.
Our main concern is that we have data out on Eurozone CPI, which will overrun any technical levels. So be ready if we are not already out of this signal at the time of release.
Bitcoin – Pending Signal
One of the stories of trade yesterday was Bitcoin’s big surge through the $7,000 level. In truth, $6,800 has been holding us down for some time now and the bears have well and truly been in control.
Skeptics have been lining up and that has weighed on the cryptocurrencies. Bitcoin is certainly in-play on Wednesday so watch this space.