News & Research

UK jobs report  Wednesday, 8:30. While the unemployment rate is at a low of 4.6%, wages are stuck at 2.4%, which is currently below the level of inflation. This means that standards of living are falling. Wages are predicted to remain unchanged at 2.4%.

US CPI: Wednesday, 12:30. This inflation report comes on Fed day and may have a last-minute influence. Back in April, headline CPI advanced by 0.2% and core CPI disappointed with +0.1% month over month. The slowdown to 1.9% in core CPI was quite worrying. For the month of May, the headline number is expected to rise by 0.3% and Core CPI by 0.2%.

US retail sales: Wednesday, 12:30. Together with the inflation report, we also get another top-tier indicator: consumption is at the heart of the US economy. Retail sales advanced by 0.4% in April and 0.1% is expected now. Core sales carry expectations for 0.2% after 0.3% beforehand. Will markets react to the data? The reaction could be muted due to the Fed.

US Fed decision: Wednesday, 18:00, press conference at 18:30. This is one of the Fed’s more important meetings. In addition to the regular statement, the central bank also publishes updated forecasts for growth, employment and inflation. More importantly, they release the dot-plot for interest rates, their own expectations for where interest rates will be in the future. The Fed is expected to raise the interest rate for the fourth time in the cycle and the third time within the past six months. The probable hike comes despite weaker data seen lately: wages are stuck at 2.5%, the Fed’s favourite inflation measure fell to 1.5% and growth was very slow in Q1. The team led by Yellen is optimistic about growth in Q2 and also the second half of the year. However, given the general slowdown, the Fed could make it a “dovish hike”: raising rates now but hinting about a slower pace of rate rises in the future. They can send the message via the dot-plot, the statement, and the tone of Fed Chair Janet Yellen’s press conference. Assuming they indeed raise rates, the reaction depends on future moves by the Fed. In case they surprise us by responding to the data and do not hike, the dollar will crash. The full reaction to the Fed will be felt through the week.

NZ GDP: Wednesday, 22:45. New Zealand publishes its GDP growth numbers only once, making it more significant for the kiwi dollar. After a relatively slow growth rate of 0.4% in Q4 2016, expectations stand at 0.7% for Q1 2017.

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• EURUSD

Update: we remain bearish as long as the pair is traded below the level of 1.1290. As could be seen on the chart above that the pair is traded below a strong resistance level around 1.1300. It also matches a Fibonacci level of 0.386 (From 14.10.2014 to 03.01.2017). So, we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 1.1200 followed by 1.1100 during the week. On the other hand, if the level of 1.1300 is broken (by at least a daily close) then the way would be open for the pair to reach 1.1400.

Resistance levels:	Support levels:	Recommended:
▪ 1.1275 ▪-1.1300 ▪ 1.1350	▪ 1.1200 ▪-1.1150 ▪ 1.1100	We remain bearish as long as the pair is traded below the level of 1.1272.

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• GBPUSD

Update: the pair successfully managed to rebound around the level of 1.2775 so it may continue going down to reach the level of 1.2650 as long as it is traded below it.  As could be seen on the chart above that the pair is traded below a strong resistance level around 1.2775 so we believe that as long as the pair is traded below it, it is highly recommended to go short targeting the level of 1.2650.

Resistance levels:	Support levels:	Recommended:
▪ 1.3000 ▪-1.3100 ▪ 1.2775	▪ 1.2650 ▪ 1.2600 ▪ --	We remain bearish as long as the pair is traded below the level of 1.3000

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• GOLD

 

Update: the pair is on its way to reach the level of 1260. The pair is traded above the level of 1250 which is a strong support level. So, we believe that as long as the pair is traded above it, it is highly recommended to go long targeting the level of 1300 during the week.

Resistance levels:	Support levels:	Recommended:
▪ 1350 ▪ 1300 ▪ 1290	▪ 1260 ▪ 1220 ▪ 1200	We remain bullish as long as the pair is traded above the level of 1250

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• AUDUSD

Update: the pair is on its way to reach the level of 0.7600. The pair is traded above a strong support level that could be found around 0.7500 so we believe that as long as the pair is traded above it, it is highly recommended to go long targeting the level of 0.7600 during the week.

Resistance levels:	Support levels:	Recommended:
▪  ▪ 0.7600 ▪-0.7700	▪ 0.7350 ▪ 0.7300 ▪ 0.7250	We remain bullish as long as the pair is traded above the level of 0.7500.

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• GBPJPY

The pair is on its way to reach a strong resistance level that could be found around 140.70. So, from there we can go short targeting the level of 139 followed by 138.70.

Resistance levels:	Support levels:	Recommended:
▪ 144 ▪ 145 ▪ 146	▪ 138.70 ▪ 139 ▪	We remain bearish as long as the pair is traded below the level of 141.