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Trading ideas for GBP/USD, AUD/USD and S&P500

July 12, 2022

GBP/USD: Cable was showing unconfident moves in a narrow range during the Asian session on Tuesday. Pound has shown a consolidation after printing a downside move. The asset fell on Monday after breaking key support at the 1.2000 level and is now trading around a fresh two-year low at 1.19 The expectation is that the Fed will keep raising rates to limit the soaring inflation which is supporting the currency ahead of release of US CPI data. The inflation data which will be published on Wednesday is the most important event, and economists expect consumer prices to print an 8.8% y/y growth in June. Political uncertainty around the new prime minister could lead to lack of direction for GBP in the near term.

SELL 1.1900/TP 1.1750/SL 1.1950

 

AUD/USD: Aussie has shown a mixed dynamic after a bearish move to Monday’s low at 0.6715 amid a risk-off mood. The asset is trading around its fresh monthly low as the US dollar index updated a fresh 19-year high. The core CPI data which doesn’t include fuel and food products was lower but the annual CPI that includes these data was seen higher. This means that the volatile energy bills and food items are still pumping the inflation rate significantly despite the measures by the Federal Reserve. On the Aussie front, investors are watching the employment data, which should be published on Thursday.

BUY 0.6740/TP 0.6600/SL 0.6800

 

S&P500: US stocks grew five days in a row, but yesterday stocks traded lower due to the risk-off mood and fears that earnings would not meet expectations due to the broad negative economic outlook, pushing an appetite for safe-haven assets. Stocks fell due to worries about China’s Covid-19 resurgence and growing commodity prices. US business will begin earnings season late in the week, which could signal a high inflation impact on companies. The US economic calendar will publish inflation among consumers and producers, US Retail Sales, and Consumer sentiment.

SELL 3854.00/TP 3730.00/SL 3890.00