Forex Signals Brief for July 17: CPI in Focus
Rowan Crosby • 2 min read
Central Banks all around the world are predominantly facing the same sort of worries about inflation as overall, the global economy is facing some headwinds.
Today, two of the major economies in the UK and Eurozone will be releasing their CPI numbers and there will be a fair bit of interest in the final result. The Eurozone has been struggling for some time and no matter what the ECB throws at the problem, inflation continues to lag well below their ideal rate which would be above 2%. The forecast today is for 1.2% YoY which as you can imagine is very weak, so the EUR/USD will be susceptible to some downside here.
In the UK, the numbers are slightly better. CPI is sitting at 2% which would be the bottom of the target band. But the news comes on the back of some mixed employment data, that saw strong wage growth, but a soft headline number. In reality, the UK certainly isn’t in the worst state compared to some others, so watch the GBP/USD today.
Later in the US session, the USD/CAD will be also watching the Canadian CPI number, while in America we get building permits released and later on WTI Crude Oil inventories.
If CPI figures miss in the current environment, there is a fair bit of pressure on the respective central bank to cut rates. So watch these numbers with interest.
Forex Signal Update
The FX Leaders Team finished with 1 win from 2 signals in what was a relatively quiet session for the guys.
USD/JPY – Active Signal
The USD/JPY has been fighting hard around the 108.00 level. We are currently short, but we will need to see that level drop for this signal to start to work.
AUD/USD – Pending Signal
The AUD/USD has fallen away over the last 24 hours thanks mostly to the stronger USD. There is a big employment number out tomorrow that all Aussie traders will be watching, so we will still be hunting an opportunity after that. The 0.7000 level should be strong support for now.
BTC has had a really rough couple of days. The $10,000 level has now fallen thanks to the US Government enquiry that is currently taking place.
Since the launch of Facebook’s Libra, the whole sector has started to come under a fair bit of scrutiny from regulators and that might very well spell trouble.
As I said yesterday, I wouldn’t be looking to buy right now until there is some clarity around what is going to happen with the Government. As they could very quickly and easily kill off Libra, which could spell trouble for the industry.