Fundamental Forex Trading Overview
BoE’s Deputy Governor Cunliffe suggests a delay in a rate hike.
The Bank of England’s (BoE) Deputy Governor, Sir Jonathan Cunliffe, said on Friday that we should be cautious in an interest rate increase and that there are still arguments for a “stodginess” policy. Cunliffe suggests a delay in a rate hike due, despite the economic growth, to the wage rate is not increasing to the 3 per cent that the BoE had initially forecasted.
The BoE’s next Monetary Policy Committee meeting will be on August 2, for this meeting most economists polled expect the rate to increase.
The EURUSD in the 2-hour chart is bouncing from the Potential Buy Zone as expected in our previous Daily Update on Thursday 12th when we commented that EURUSD was making higher highs and higher lows. Now when the pair is testing support in the green box, we expect new upsides to 1.19067 (orange box – maturity area) completing a major degree connector. Invalidation level is 1.15080.
The GBPUSD in this 2-hour chart is completing a new bearish leg in the Potential Buy Zone. We foresee a breakout of the short-term trendline and the continuation of the previous bullish cycle with a target placed in the 1.3475 area. Also, the exhaustion area is the target area of the inverted head and shoulders pattern which will be active once time the short-term pivot level was surpassed. Invalidation level of the new bullish cycle is 1.30494.
As noticed in our last Forex and Indices daily update, the Swiss currency is being the weakest currency. The USDCHF in the 2-hour chart soars to the highest level since May 2017. Using the correlations in the US Dollar group with DXY, EURUSD and GBPUSD, we could suspect that this is a false breakout.
The EURCAD cross in the 2-hour chart has broken down the short-term pivot level at 1.53684 and made a pullback to the same level turning the support into resistance. We expect more falls with a target placed in the area between 1.5144 to 1.5061. Invalidation level is 1.55225.
The GBPCAD cross in the 2-hour chart is consolidating testing the 1.73 psychological support level. It is likely that the price moves bullish making a false breakout before to continue the previous bearish impulse. Invalidation level is at 1.76907.
The FTSE 100 in the 2-hour chart continues to consolidate, developing a complex corrective structure and testing around the 7,700 level. We foresee a limited upside for the British index to 7,792 pts. Invalidation level is 7,508.
The DAX 30 in the 2-hour chart is moving bullish, testing the 12,600 pivot level. We expect more climbs to the area between 12,695 to 12,742. The critical level to watch is the 12,807 pts, from where if the price surpasses it, DAX could rise to 13,020 pts. Invalidation level is 12,104.