US Core Retail sales disappoint.

During yesterday’s American session, the US Core Retail Sales rate came in lower than expected, striking down ambitions that the Fed may have been temporarily given some lee-way, should they decide to continue their rate hiking path. The lower than expected rates, is a stark reminder that the high-interest rates imposed by the bank, may be making their way to the surface, thus traders who may have hoped that the greenback would have gained some support following the release, were left disappointed. Furthermore, Canada’s CPI rates were released yesterday, which where indicative of easing inflationary pressures on the economy as the CPI rates came in lower than expected on all accounts, thus market analysts appear to be divided over whether or not the  BoC will hike in their next meeting. In the US Equities markets, we note that Reuters is reporting that Johnson and Johnson (#JNJ) who is due to release their earnings tomorrow,  will have to pay $18.8 million to an individual who claimed he developed cancer, as a result of exposure to the company’s baby power. Furthermore, Ford appears to be taking a page out of Tesla’s playbook, by cutting prices on their electric F-150 lighting pickup by as much as $10,000. In addition, we would like to highlight yesterday’s earnings report by Morgan Stanley (#MS) and Lockheed Martin (#LockheedMT) who both outperformed analysts’ expectations. However, what might be interesting during today’s earnings release is Goldman Sachs (#GS) with many anticipating a horrendous earnings release by the bank, that may not be even near to that of their competitors. For today’s earnings, we would be paying close attention to the earnings releases of IBM (#IBM), Tesla (#TSLA) , Netflix (#NFLX).Lastly, we note that during today’s Asian session BOJ Governor Ueda has once again re-iterated the bank’s commitment to maintaining its ultra-loose monetary policy after stating that “If our assumption (that sustained achievement of 2% inflation remains distant) is unchanged, our overall narrative on monetary policy remains unchanged“. Thus, indicating the banks unwillingness to conduct drastic changes at this point in time.

AUD/USD   appears to be reversing course after having failed to break above resistance at 0.6900 (R2) and dropping below support turned resistance at the 0.6835 (R1) level. We tend to maintain a bearish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart, where it broke below the 50 figure, implying a potential shift in market sentiment from a bullish to a bearish outlook. For our bearish outlook to continue, we would like to see a clear break below the 0.6770 (S1) support level, with the next possible target for the bears being the 0.6700 (S2) support base. On the other hand, for a bullish outlook, we would like to see a clear break above the 0.6835 (R1) resistance level, with the next possible target for the bulls being the 0.6900 (R2) resistance ceiling.

WTICash also appears to have reversed course, after breaking above resistance now turned support at the 74.60 (S1) support level. We maintain a bullish outlook for the commodity and supporting our case is the RSI indicator below our 4-Hour chart which broke above the reading of 50, implying a switch from a bearish to a bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 76.70 (R1) resistance line, with the next possible target being the 79.00 (R2) resistance level. On the other hand, for a bearish outlook we would like to see a clear break below the 74.60 (S1) support level, with the next possible target for the bears being the 72.65 (S2) support base.

Other highlights for the day:

Starting with the European session we note the UK’s CPI rates, followed by the Eurozones Final HICP rates all for the month of June. In the American session we note the US Housing starts figure for June. In Thursday’s early Asian session, we highlight Japan’s Trade balance figure and Australia’s Employment data, all for the month of June.   

AUD/USD H4 Chart

Support: 0.6770 (S1), 0.6700 (S2), 0.6595 (S3)

Resistance: 0.6835 (R1), 0.6900 (R2), 0.6975 (R3)

WTICash H4 Chart

Support: 74.60 (S1), 72.65 (S2), 70.30 (S3)

Resistance: 76.70 (R1), 79.00 (R2), 81.25 (R3)

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

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