EUR/USD: The EUR is trading near a daily low of 1.1780, a new multi-month low. The pair fell ahead of the Wall Street opening as the dollar rallied on US inflation data. Germany also released June inflation figures, with the annual CPI confirmed at 2.3%. The numbers have rekindled speculation about tighter monetary policy in the US earlier than expected.
The EU is to release industrial production data for May, while in the US, Federal Reserve Chairman Jerome Powell will testify on a semi-annual monetary policy report before the House of Representatives Financial Services Committee and try to convince Congressmen to maintain capacity despite economic progress.
Immediate resistance can be seen at 1.18. The breakout to the upside can trigger growth towards 1.1820.
GBP/USD: GBP closed down around 1.3820 on Tuesday as the dollar benefited from unexpectedly higher US inflation, with the pair hitting a daily bottom at 1.3799. The Bank of England released its semi-annual Financial Stability Report, which showed that policymakers expect rates to remain at record lows until at least December 2021. “The economic outlook has improved, but risks to recovery remain, especially those associated with the spread of COVID,” the document says.
On Wednesday, the UK is to publish inflation data for June. The consumer price index is forecast at 2.2%, compared with the previous 2.1%. The retail price index is expected at 3.4% and the producer price index is expected to rise to 4.8%.
Immediate resistance can be seen at 1.3850. The breakout to the upside can trigger growth towards 1.3890.
XAU/USD: Gold rate again showed some resilience below $1800, instead grabbing buyers’ attention on the downturn and offsetting modest intraday losses. Momentum continued during the Asian session on Wednesday, although upside potential appears to be limited ahead of Fed Chairman Jerome Powell’s six-month address to Congress. Powell’s remarks on inflation should affect market expectations for the short-term outlook on the Fed’s monetary policy. This will play a key role in stimulating the dollar in the short-term and will give new directional impetus to the unprofitable yellow metal. Immediate resistance can be seen at 1817.15.The breakout to the upside can trigger growth towards 1820.50.