Market worries for global slowdown remain

The USD edged higher against its counterparts on Friday, yet the overall sideways motion of the Dollar Index seems to prevail, with worries for a global economic slowdown and the Fed’s intentions stocking market’s worries. Yet also BoE’s 50 basis points rate hike last Thursday seems to have intensified market worries about a possible recession in the UK economy induced by the tightening of the bank’s monetary policy. On a technical level, we note that the pound corrected higher during today’s Asian session yet remained clearly within the boundaries of 1.2660 (S1) and the 1.2865 (R1) levels. The downward trendline guiding the pair since the 6   of June tends to imply some bearish tendencies, yet to switch our sideways bias in favour of a bearish outlook we would require the pair to clearly break the 1.2660 (S1) support line, given also that the RSI indicator remains close to the reading of 50, implying a rather indecisive market, that may allow the sideways motion to continue. Should the bulls take over, we may see cable, breaking the prementioned downward trendline, the 1.2865 (R1) resistance line and aim for the 1.3070 (R2) resistance level.  

JPY seemed to halt its slipping of the past three days during today’s Asian session, as the Japanese government seems to be escalating its rhetoric against the weakening of JPY, BoJ’s summary of opinions leaned on the dovish side though and could weaken JPY. On a deeper fundamental level, we note the mutiny of the Wagner group in Russia which tended to weaken the Ruble at today’s opening and may have a bearing on the war in Ukraine at a future stage, yet for the time being the wider markets seem to ignore it. Last but not least, in the Euro area, the preliminary PMI figures for June released on Friday tended to intensify our worries for the manufacturing sector, especially in Germany it noted an even deeper contraction of economic activity, for the 12   month in a row now. We note that ECB tends to maintain its hawkishness and we expect to get a deeper insight for BoE’s, ECB’s and the Fed’s intentions at the ECB forum in Portugal, this week.

EUR/USD bounced on the 1.0855 (S1) support line on Friday and maintained its sideways motion with low volatility between the 1.1000 (R1) resistance line and the 1.0855 (S1) support line. We tend to maintain our bias for the sideways motion to continue given also that the RSI indicator is rising and nearing the reading of 50. Should the bulls take over, we may see the pair breaking the 1.1000 (R1) resistance line and aim for the 1.1175 (R2) resistance level. Should the bears take over, we may see the pair breaking the 1.0855 (S1) support line and aim for the 1.0695 (S1) support level.

Autres faits marquants de la journée :

Today we note the release of Germany’s Ifo indicators, the UK’s CBI indicators and the US Dallas Fed Mfg Index, all being for June.

As for the rest of the week:

On Tuesday, we get from the UK the nationwide house prices for June, the US durable goods orders for May, Canada’s CPI rates for May and the US consumer confidence indicator for June. On Wednesday we note the release of Germany’s forward-looking GfK consumer sentiment indicator for July. On Thursday we note the release of Australia’s retail sales growth rate for May, the Eurozone’s economic sentiment for June, the US weekly initial jobless claims figure and highlight Germany’s preliminary HICP rate for June and the US final GDP rate for Q1. On Friday we note the release from Japan of Tokyo’s CPI rates for June and preliminary industrial output for May, from China the NBS Manufacturing PMI figure for June, UK’s GDP rate for Q1, France’s and the Eurozone preliminary HICP rate for June, Switzerland’s KOF indicator for the same month, the US the consumption rate and the core PCE price index both for May, Canada’s GDP rate for April and the UOM final consumer sentiment for June from the US.     

Graphique de l’EUR/USD H4

Support: 1.0855 (S1), 1.0695 (S2), 1.0525 (S3)

Resistance: 1.1000 (R1), 1.1175 (R2), 1.1370 (R3)

Graphique de l’GBP/USD H4

Support: 1.2660 (S1), 1.2465 (S2), 1.2280 (S3)

Resistance: 1.2865 (R1), 1.3070 (R2), 1.3295 (R3)

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