Turkey’s interest rate decision in the spotlight.

In Today’s European session we note the interest decision by the central bank of Turkey, with many analysts expecting that the CBT will continue increase interest rates, in an attempt to combat rampant inflationary pressures in the economy. However, we should note that the anticipated return to economic orthodox policy has not yet materialized, and we anticipate that a mediocre rate hike may not be enough to provide support for the currency and in order for it to have a significant impact of the market, it may need to be significantly higher than current market expectations. In the US Equities markets, we highlight NETFLIX’s  (#NFLX) earning report, which saw the streaming platform add nearly 6 million subscribers, despite its password sharing crackdown. In addition the CEO stated in his letter to the company’s shareholders that “Revenue in each region is now higher than pre-launch, with sign-ups already exceeding cancellations”, indicative of a positive outlook for the company heading in Q3 and Q4. On the other hand, TESLA’s (#TSLA) earnings report yesterday seemed to disappoint investors, who saw a reduction in profitability , as their gross margins decline to 18.2% , despite the company actually beating EPS and revenue anticipations with the earnings per share coming in at $0.91 whilst revenue came in at 24.29B. For Today’s earnings release, we would like to highlight Johnson&Johnson’s (#JNJ) and Travelers Companies (#TRV) earnings releases. During Today’s early Asian session, we highlight Australia’s continued tight labour market, with Employment for June increasing, in addition to the Unemployment rate decreasing, could allow the bank to hike at least one more time, as pressure on the RBA to curb inflation, continues to increase. In the commodities market, following Russia’s termination of the grain deal agreement with Ukraine, comments by Russian officials that they would be targeting ships heading for Ukrainian ports as potential military targets, appears to have revived fears about the stability in the supply of wheat into the global markets.

AUD/USD   appears to be moving higher following the release of the country’s Employment data. We tend to maintain a bullish outlook for the pair and supporting our case is the RSI indicator below our 4-Hour chart, where it broke above the 50 figure, implying a potential shift in market sentiment from a bearish to a bullish outlook. For our bullish outlook to continue, we would like to see a clear break above the 0.6845 (R1) resistance level, with the next possible target for the bulls being the 0.6915 (R2) resistance line. On the other hand, for a bearish outlook, we would like to see a clear break below the 0.6765 (S1) support level with the next possible target for the bears being the 0.6685 (S2) support base.

Wheat appears to be moving in an upwards direction, following concerns about global wheat supply. We maintain a bullish outlook for the commodity and supporting our case is the RSI indicator below our 4-Hour chart which broke above the reading of 70, implying a strong bullish market sentiment. For our bullish outlook to continue, we would like to see a clear break above the 752 (R1) resistance level, with the next possible target for the bulls being the 777 (R2) resistance ceiling. On the other hand, for a bearish outlook we would like to see a clear break below the 723 (S1) support level with the next potential target for the bears being the 692 (S2) support base.

Other highlights for the day:

Starting with the European session we note France’s Business climate figure for July, followed by Turkey’s Interest rate decision and later on during the American session we note the US weekly initial jobless claims figure for July and the Eurozone’s preliminary consumer confidence figure for July. In tomorrows Asian session, we note Japan’s Core CPI rate for June.

AUD/USD H4 Chart

Support: 0.6765 (S1), 0.6685 (S2), 0.6610 (S3)

Resistance: 0.6845 (R1), 0.6915 (R2), 0.6995 (R3)

Wheat H4 Chart

Support: 723 (S1), 692 (S2), 664 (S3)

Resistance: 752 (R1), 777 (R2) 801 (R3)

If you have any general queries or comments relating to this article please send an email directly to our Research team at research_team@ironfx.com

Disclaimer:
This information is not considered as investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.

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