Market Roundup
•French Consumer Confidence (Jul) 86, 85 forecast, 84 previous
•Spanish Unemployment Rate (Q2) 9.87%, 10.10% forecast, 10.83% previous
•Spanish Retail Sales (YoY) (Jun) 0.5%, forecast, 1.3% previous
•US ADP Employment Change (Jul) 15.00K, forecast, 16.50K previous
•US Retail Inventories Ex Auto (Jun) -0.2%, forecast, 0.2% previous
•US Goods Trade Balance (Jun) -101.50B, -100.30B forecast, -105.89B previous
•US Wholesale Inventories (MoM) (Jun) 0.3%, 0.4% forecast, 0.1% previous
• Looking Ahead Economic Data (GMT)
•15:00 US CB Consumer Confidence (Jul) 92.4, forecast, 91.2 previous
•15:00 US Atlanta Fed GDPNow (Q2) 1.6%, forecast, 1.6% previous
•15:00 US Richmond Services Index (Jul) -1, forecast, previous
•15:00 US Richmond Manufacturing Index (Jul) 7, forecast, 4 previous
•15:00 US US Richmond Manufacturing Shipments (Jul) 3, forecast, previous
•15:30 US US Texas Services Sector Outlook (Jul) 2.9, forecast, previous
•15:30 US Dallas Fed Services Revenues (Jul) 9.8, forecast, previous
Currency Forecast
EUR/USD : The euro edged higher on Tuesday as investors monitoring developments in the Middle East and oil prices while also awaiting the U.S. Federal Reserve's policy decision.Oil prices continued to drop, hitting their lowest levels in more than a week as hopes for a resolution to the U.S.-Israeli war on Iran grew.U.S. President Donald Trump said on Monday that Washington was having "good talks" with Iran and that there was the chance of a resolution. However, he said U.S. strikes would resume if negotiations failed while Iran issued similar comments about retaliation. Euro zone data schedule includes flash second-quarter GDP, July economic sentiment and consumer confidence, flash inflation, and June unemployment figures. Immediate resistance can be seen at 1.1414(SMA 20), an upside break can trigger rise towards 1.1447(38.2%fib).On the downside, immediate support is seen at 1.1363(23.6%fib), a break below could take the pair towards 1.1342(Lower BB).
GBP/USD : The pound edged higher on Tuesday as investors turned their attention to Thursday's Bank of England policy meeting. The BoE is widely expected to keep interest rates unchanged at 3.75%, despite oil prices climbing above $100 a barrel following the U.S.-Iran conflict, a development that could reignite inflationary pressures.British inflation has so far remained below the BoE's projections, easing to a 15-month low of 2.6% in June. A delayed pass-through of higher wholesale energy costs to regulated household bills has helped keep UK inflation below levels seen in the United States and the euro zone, where the European Central Bank is expected to deliver a second rate hike later this year. Investors also awaited a meeting of the Fed that concludes on Wednesday. CME FedWatch shows a 62% probability that policymakers will keep rates unchanged, while 38% expect at least a 25-basis-point increase. Immediate resistance can be seen at 1.3376(50%fib), an upside break can trigger rise towards 1.3376 (61.8%fib).On the downside, immediate support is seen at 1.3272(38.2%fib), a break below could take the pair towards1.3222(Lower BB).
AUD/USD: The Australian dollar eased on Tuesday as investors digested remarks from Reserve Bank of Australia Governor Michele Bullock and looked ahead to Wednesday's inflation report.Bullock warned that persistent underlying inflation could require a further slowdown in domestic demand, adding that additional interest rate hikes remain on the table if necessary. Speaking in Sydney, she said policymakers remain uncertain whether the three rate increases delivered this year will be sufficient to return inflation to the RBA's 2%–3% target range.She also highlighted supply-side risks, arguing that the recent surge in oil prices underscores how premature it is to assess the full economic impact of the Middle East conflict.Market attention now turns to Australia's second-quarter CPI report due on Wednesday, with headline inflation expected to rise 0.7% quarter-on-quarter and 4.1% year-on-year. The data could shape expectations for the RBA's next policy move. Immediate resistance can be seen at 0.7026 (Higher BB), an upside break can trigger rise towards 0.7000(Psychological level).On the downside, immediate support is seen at 0.6969(38.2%fib), a break below could take the pair towards 0.6913(July 17th low).
USD/JPY: The U.S. dollar edged higher on Tuesday as investors awaited a series of major central bank decisions this week, led by the Federal Reserve's policy announcement. Currency markets are expected to remain range-bound until policymakers provide fresh guidance on the outlook for interest rates.The Bank of Japan is widely expected to leave interest rates unchanged on Friday while maintaining a hawkish bias, keeping the door open to further policy tightening as inflationary pressures intensify due to the Middle East conflict, a weaker yen and robust global demand for artificial intelligence. However, policymakers are likely to refrain from offering firm guidance on the timing of future rate hikes, opting instead to assess whether higher producer prices driven by rising energy costs feed through to broader inflation. Investors will closely monitor the BOJ's quarterly outlook report and Governor Kazuo Ueda's post-meeting press conference for clues on when the central bank could deliver its next rate increase. Immediate resistance can be seen at 163.99 (23.6%fib) an upside break can trigger rise towards 164.44(Hiigher BB) .On the downside, immediate support is seen at 163.42(July 27th low) a break below could take the pair towards 162.50(SMA20).
Equities Recap
European shares rose for a third consecutive session on Tuesday, driven by gains in consumer-focused stocks after upbeat results from Unilever, which helped offset weakness in banking and technology shares.
UK's benchmark FTSE 100 was up by 0.86 percent, Germany's Dax was down by 0.15 percent, France’s CAC was up by 0.59 percent.
Commodities Recap
Gold edged lower on Tuesday, pressured by a firm dollar trading near a one-month peak, as markets turned their attention to this week's Federal Reserve meeting and comments from Chair Kevin Warsh.
Spot gold fell 1.1% to $4,032.42 per ounce by 09:27 a.m. EDT (1327 GMT), while U.S. gold futures for August delivery slid 1.1% to $4,032.40.
Brent crude futures extended Monday's nearly 9% plunge, falling more than 3% to $85.55 a barrel, as a lull in hostilities between the U.S. and Iran followed Washington's abrupt suspension of air strikes on Saturday.
