Forex Signals Brief for July 19: The Pound Under Pressure
Rowan Crosby • 2 min read
US Federal Reserve Chairman Jerome Powell finally rapt up his testimony to Congress on Wednesday. Which means we can now look to the economic data to drive price action for the remainder of the week.
Yesterday, all the attention was on the GBP/USD as weaker than anticipated inflation data sent the Pound tumbling. On Thursday, the GBP gets another moment in the sun, as we also get a look at UK retail sales data. And for Pound bulls, a strong result will be required to halt the sell-off.
As the US session opens, the major data points of the day will be weekly US employment and the Philly Fed Manufacturing. We also have earnings season in full flight, which is seeing US equity indexes continue to push to new highs.
Forex Signal Update
The FX Leaders team grabbed the single winner from only two trades yesterday as opportunities were few and far between. We are, however, in a couple of positions in the majors which remain active headed into the European open.
Bitcoin – BTC broke above $7,000 in a short, sharp buying surge and to date, it has maintained the gains. Price traded as high as $7,600, which is a bullish sign for now.
Nikkei – The Japanese Nikkei continues to grind higher as is looking at a test of 23,000. Which has been a solid resistance level in recent times.
GBP/JPY – After what was a nice move higher, price has pulled back sharply in the last session or two. This might provide a good buying opportunity on Thursday.
GBP/USD – Active Signal
The GBP/USD sold off hard yesterday, as a less than impressive inflation figure rattled investors. Price has been a little choppy in recent times, which is what we might expect given the Brexit headlines that flow on a near-daily basis.
However, the long-term trend is to the downside and with that in mind, it is one to be traded to the short-side for the time being.
NZD/USD – Active Signal
The commodity currencies saw some strong upside on Wednesday. In part, thanks to a surprise rally in Crude Oil. The market was expecting a draw in inventories and we got a big build. However, price charged higher.
That dragged the commodity currencies, including the NZD/USD, higher. However, we have to remember the long-term trend is bearish and as such, this is presenting a good opportunity to sell.