Weekly Technical Analysis For July 12th to 16th, 2021
Get Ready For US CPI Inflation And Retail Sales Data This Week
EUR/USD: Last week, the European Central Bank released the results of an 18-month review, in which the central bank raised its inflation target to 2% and said moderate overshoots would be tolerated.
The new ECB strategy set the bank inflation target at 2%, giving up its previous formulation of below but close to 2%, and signaled that periods of low inflation, as currently experienced, may require more persistent monetary policy action.
ECB policymakers debated a cut in stimulus at their June 10 meeting as the recovery picked up pace but eventually found broad agreement to maintain an elevated level of support.
The US dollar edged lower versus the Euro on Friday with the rally in U.S. Treasuries running out of steam and global stock markets steadying.
Concerns have been growing that the fast-spreading delta variant of the Covid-19 virus could hamper a global economic revival that is already showing pockets of weakness.
Looking ahead, we will closely watch the CPI inflation figures on Tuesday. Consumer prices are expected to have risen 0.5% last month and 4.9% over the prior year, according to estimates. Excluding the cost of food and fuel, core inflation is projected to be 4.0% on a year-over-year basis.
Besides the Fed rate decision, this week's calendar also features U.S. data on PPI Inflation, Philadelphia Fed Manufacturing Index, Retail Sales and Michigan Consumer Sentiment.
The US Commerce Department will report June retail sales numbers on Friday. Economists predict that retail sales fall by -0.4% last month. On the other hand, Core retail sales, which exclude autos, are expected to have risen by 0.5%. A higher-than-expected reading should be taken as positive for the greenback.
Moreover, U.S. Federal Reserve Chair Jerome Powell is scheduled to appear before Congress.
In the EU area, focus on the Consumer Price Index on Friday. On a year-on-year basis, the Eurozone CPI is expected to stay at 1.9%. A higher-than-expected reading will be positive for the single currency.
The EURUSD pair moved up above the 1.1867 main level. As long as the pair stays above 1.1867, on a four-hourly basis, we will follow 1.1919 as the main resistance level. On the downside, if the price drops back below 1.1867, the next support level will be at 1.1819
Support: 1.1867 - 1.1819 - 1.1744
Resistance : 1.1919 - 1.1994
GBP/USD: The GBPUSD pair closed last week above the main support level of 1.3883. As long as the price trades above 1.3883 on a four-hourly basis, we will see 1.4005 as the resistance level. Otherwise, if the pair drops below 1.3883, we will follow the next support level at 1.3784.
Support: 1.3883 - 1.3784 - 1.3688
Resistance: 1.4005 - 1.4329
USD/JPY: Keep your eye on the 110.36 major resistance level in the USDJPY pair. As long as the pair stays below 110.36 on a daily basis, we will see the support levels at 109.72 and 109.39. On the other hand, if the price goes beyond 110.36, the next resistance level will be placed at 110.93.
Support: 109.72 - 109.39 - 109.09
Resistance: 110.36 - 110.93
GOLD: We are closely watching the 1805 main support level in the Gold Price. As long as the price stays above 1805, on a daily basis, we will see the daily resistance level at 1829. On the downside, if the price breaks down below 1805, the next support level will be at 1785.
Support: 1805 - 1785 - 1763
Resistance: 1829 - 1854 - 1873
11 Jul 21 (Sun)