The battle against inflation, is far from over

During yesterday’s American session, New York Fed President Williams, stated yesterday that “Restoring price stability is of paramount importance”, potentially hinting that the bank may not be done with raising interest rates just yet. In Yesterday’s Asian session, we highlight the statements made by Japan’s Finance Minister that “if there are too many excessive moves, we will reply accordingly”, hinting that the Government may intervene in the FX market in order to protect the Japanese Yen. Over in Europe, during yesterday’s trading session, Germany’s IFO Business Climate and Business Expectations figures for June, both indicated a continued deterioration in one of Europe’s largest economies, as the economy remains in a technical recession. In the UK Equities markets, we note the deal between Aston Martin (#AstonMartin) and US EV maker Lucid Group, by giving up a 3.7% stake in the company, in return to gaining access to Lucid Group’s proprietary technology, leading to Aston Martin’s stock soaring by 14% following the announcement. In the US Equities markets, IBM (#IBM) announced it would be buying software company Apptio for $4.6 billion, as the cloud services and AI race continues to be at the forefront of market developments. In addition, Tesla’s (#TSLA) stock dropped by nearly 2% following the announcement by GoldmanSachs (#GS) that the stock was downgraded to Neutral, yet in the grander scheme of things, a minor reduction may be insignificant in the long run. Concerns about the supply of wheat appear to be heating up, with the executive director of the Oklahoma Wheat Commission, stating this may be the most challenging year for producers in the last 50 years. Impacting not only the state of Oklahoma but also the state of Kansas which is right next door, spiking fears about the long-term supply of wheat. OPEC appears to be courting Guyana to join the group, potentially consolidating more power across oil producers around the world.

GBP/USD appears to be moving in a sideways motion after having failed to break below support at 1.2695. We maintain a neutral outlook for the pair as long as the pair remains confined between the support level at 1.2695 (S1) and resistance at the 1.2800 (R1) level and supporting our case is the narrowing of the Bollinger bands, implying low market volatility, in combination with the RSI figure below our 4-Hour chart currently registering a figure of 50, implying a neutral market sentiment. For a bullish outlook, we would like to see a clear break above the 1.2800 (R1) resistance level, with the next possible target for the bulls being the 1.2925 (R2) resistance ceiling. On the other hand for a bearish outlook, we would like to see a clear break below the 1.2695 (S1) support level, with the next possible target for the bears being the 1.2590 (S2) support base.

WTICash appears to be moving in an upwards fashion. We maintain a bullish outlook for the pair and supporting our case is the upwards moving trendline, incepted on the 23^rd of June. For our bullish outlook to continue, we would like to see a clear break above the 70.88 (R1) resistance level, with the next target for the bulls being the 73.45 (R2) resistance ceiling. On the other hand, for a bearish outlook we would like to see a clear break below the 68.50 (S1) support level, with the next possible target for the bears being the 65.50 (S2) support base.

Other highlights for the day:

Today in the European session, we get from the UK the nationwide house prices for June, yet note that the release may be delayed, while on the monetary front we note that ECB President Christine Lagarde, BoE MPC member Dhingra, BoC Deputy Governor Kozinski and Norges Bank Governor Ida Wolden Bache are scheduled to speak. In the American session, we get Canada’s CPI rates for May, and from the US the consumer confidence for June, the number of new home sales for May and the Richmond Fed Composite Index for June and the weekly API crude oil inventories figure. During tomorrow’s Asian session we note the release of Australia’s CPI rates for May. 

GBP/USD H4 Chart

Support: 1.2695 (S1), 1.2590 (S2), 1.2440 (S3)

Resistance: 1.2830 (R1),  1.2925 (R2), 1.3040 (R3)

WTICash H4 Chart

Support: 68.50 (S1), 65.50 (S2), 63.10 (S3)

Resistance: 70.88 (R1), 73.45 (R2), 76.70 (R3)

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