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Market Research & Info

Land-FX analyst Shadi Abdo

  • Member of The Egyptian Society of Technical Analyst
  • Head of Education department, Market Strategist, Chief Technical Analyst of Global Leading Forex Brokerage companies
  • Trained over 5000 professional trainers more than 10 years
  • BSc in Economics from Mansoura University

19 June 2019

powered by Land-FX

UK inflation: Wednesday, 8:30. The Bank of England may be content that the annual level of consumer price index has hit 2.1% – almost at the BOE’s 2% target. Core CPI stood at 1.8% while retail prices were somewhat higher at 3%. The fresh figures for May will likely show a slide in headline CPI due to falling energy prices, but core CPI may refrain from substantial movements.

Fed decision: Wednesday, 18:00, press conference 18:30. The Fed has removed any intention to raise interest rates in 2019 – and may now signal rate cuts. Markets are already pricing in two cuts this year with the first one coming in the July meeting that follows this one. Fed Chair Jerome Powell has already moved from dismissing low inflation in the first quarter as “transitory” and stressing “patience” means no hikes nor cuts – to ditching the patient stance and saying he we will “act as appropriate.” The US economy is doing well, but the recent disappointing US jobs report which missed on both job gains and wages may cause a rethink at the central bank. Moreover, the previous rate decision came just days before US-Sino talks broke down. The Fed may be unable to ignore politics and may have to incorporate headwinds to global trade in its outlook.

But how far will it go? The first thing markets will be watching is the dot-plot. The Fed releases projections for inflation, growth, employment, and most importantly  – interest rates – once a quarter. As mentioning earlier, markets are expecting two rate cuts this year. If the Fed continues signaling no cuts or only one, the greenback may storm higher and stocks could plunge. Indicating two cuts may weigh on the USD and going as aggressive as three – highly unlikely – would send the greenback plunging.

If the shift in the dots is extreme, nothing else matters. However, if the Fed signals one or two cuts, the focus will quickly shift to the statement. How worried is the Fed about inflation? Will they incorporate fears about trade in the statement? Were there any dissenters that wanted a rate cut now? All these factors may have a substantial impact.

Last but not least, Chair Powell speaks half an hour after the news is out. Several months ago, he said that the economy is doing very well. How will he characterize the situation now? Comments about the next moves in interest rates will likely have the most significant impact, followed by comments about inflation and trade. His presser will be scrutinized for every word and the echoes from the decision will likely be heard for days.

New Zealand GDP: Wednesday, 22:45. The economy of the small island nation has enjoyed a robust growth rate of 0.6% in the last quarter of 2018, and 2019 has probably begun on a softer note. The impact of the trade wars and lower business confidence may have hurt New Zealand, which publishes GDP data only once – without revisions.

GBP
UK inflation

USD
Fed decision

NZD
New Zealand GDP

 

  • EURUSD

 

The chart above shows that the pair is traded above a strong support level that is 1.1118 which is where we can look for some bullish evidence to go long targeting the level of 1.13 followed by 1.1350.

 

Resistance levels: Support levels: Recommended:
 1.21
1.1419
▪ --
▪ -
 -
 1.1118

We are bullish as long as the pair is traded above the level of 1.1118.

  • GBPUSD

 

As could be seen on the chart above that the pair is traded above a strong support level that is 1.2488. Therefore, we are bullish as long as the pair is traded above it. Our first target is 1.30

 

Resistance levels: Support levels: Recommended:
▪ 1.36
 1.3310
▪ 1.33
 -
 1.2488
 1.2450

We are bullish as long as the pair is traded above the support level of 1.2488

  • GOLD

 

As could be seen on that chart above that the pair is traded below a strong resistance level that is 1365. Therefore, we are bearish as long as the pair is traded below it. Our first target is 1310.

 

Resistance levels: Support levels: Recommended:
 1370
 1365
 1245
 1260
 1265

We are bearish as long as the pair is traded below the level of 1365.

  • AUDUSD

 

The chart above shows that the pair is traded above a strong support level that is 0.6778 therefore, we are bearish as long as the pair is traded below it. Our first target is 0.70.

 

Resistance levels: Support levels: Recommended:

▪ 0.7550
0.7600
0.7000

▪ 0.6778
-
▪ -

We are bearish as long as the pair is traded below the level of 0.6778

  • GBPJPY

 

The chart above shows that the pair is about to reach a strong support level that could be found at 134. We will be looking for some bullish evidence around this area for an expected movement to the upside. This is conditioned by the continuation of trading above the support level of 134.

 

Resistance levels: Support levels: Recommended:
156
 155
 141

 134
133
 132

Waiting for some bullish evidence to show up.

 

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