Forex Daily Analyses

In an alternative scenario, and after the breakdown of the resistance levels 1.2175, 1.2270 (local high), GBP/USD will head towards the resistance levels 1.2570, 1.2600. The breakdown of the resistance level 1.2740 will be the first serious signal that the pair will return to the long-term bull market zone. Short positions are preferred so far. Support levels: 1.2000, 1.1900, 1.1800, 1.1760, 1.1410 Resistance levels: 1.2120, 1.2175, 1.2270, 1.2570, 1.2740, 1.2800

The data released today (at 06:00 GMT) confirmed the acceleration of inflation in the UK. According to data released by the Office for National Statistics, annual inflation jumped to 10.1% in July, a new 40-year high, from an expected 9.8% and after rising 9.4% in June. Core inflation (excluding volatile food and energy products) rose to 6.2% y/y, against 5.8% in June and a forecast of an increase to 5.9%. GBP/USD rebounded to an intraday high of 1.2142 following this release, but then declined, dropping to 1.2100 at the time of this posting. In general, there is a downward trend in the pair, taking into account also the renewed growth of the dollar. It is clear that despite aggressive interest rate hikes, the Bank of England is still unable to contain high and accelerating inflation.

Tomorrow (at 02:00 GMT), the decision of the RB of New Zealand on the interest rate will be published, which will cause a sharp increase in volatility during the Asian trading session, primarily in NZD quotes. It is expected that the RBNZ may raise the interest rate again at this meeting. If the RBNZ signals a tendency to wait and see in its accompanying statement, the New Zealand dollar is likely to be under pressure. However, the market reaction to the RBNZ's decisions regarding the interest rate in the current situation may be completely unpredictable. Support levels: 0.6315, 0.6300, 0.6200, 0.6105, 0.6100, 0.6000, 0.5900 Resistance levels: 0.6354, 0.6380, 0.6400, 0.6480, 0.6500, 0.6560, 0.6745, 0.6770

At a press conference following a July meeting that raised the rate by 0.75%, Fed chief Jerome Powell said a "moderately tight monetary policy" was justified by current economic indicators, including high inflation, also saying that another sharp rate hike in September. Now market participants will carefully study the minutes from this Fed meeting in order to more accurately assess the likelihood of such an increase in September and the further intentions of the leadership of the US central bank. The publication of these protocols is scheduled for tomorrow at 18:00 (GMT). DXY has broken through the resistance level 106.00. Now, the breakdown of the next "round" level 107.00 will confirm the revival of the upward dynamics of DXY, sending it, for starters, towards the recent local maximum 109.14.

The US broad market index S&P 500 broke last week the key resistance level of 4180.00 (EMA200 on the daily chart), rising to a 14-week high and a mark of 4281.00. In general, the positive dynamics of the S&P 500 remains above the level 4180.00. Probably, the breakdown of the local high of 4281.00 will be a signal to open new long positions. In an alternative scenario, and after the breakdown of support levels 4180.00, 4170.0 (EMA200 on the 1-hour chart), 4145.00 (EMA144 on the daily chart), the S&P 500 will again head to the key long-term support level 3670.00 (EMA200 on the weekly chart), separating the multi-year bullish trend from the bearish one. Its breakdown could finally break the long-term global bullish trend of the S&P 500.

Now, the likelihood of a 75bp Fed rate hike fell to 35% in September from 80% (before the publication of the CPI index), according to the CME Group, which also affected the yield of US Treasury bonds, causing it to sharply decline. Against this backdrop, US stock indices continued to rise, reaching local highs over the previous few weeks by now. Thus, futures for the S&P 500 are currently traded near 4260.00 mark, above the key support level 4180.00, and NASDAQ100 futures - near 13520.0 mark, above the key support level 13390.0. Today, futures for major US stock indices, though not particularly declining, are not growing, while the dollar has strengthened again. As of this writing, DXY futures are traded near 106.14, 63 points above Friday's close. Now, after the breakdown of the local resistance level 106.00, the breakdown of the next "round" resistance level 107.00 will be a confirming signal for the resumption of growth in DXY and the strengthening of the dollar.

Today's publication at 14:00 (GMT) may be a driver for further growth if the US data (University of Michigan Consumer Confidence) turns out to be positive. The breakdown of the resistance level 1.2785 (EMA144 on the daily chart) will be a signal for new long positions in USD/CAD. In an alternative scenario, and after the breakdown of support levels 1.2755, 1.2740 (Fibonacci 38.2% of the downward correction in the USD/CAD growth wave from 0.9700 to 1.4600), USD/CAD will return to the bear market zone. Support levels: 1.2755, 1.2740, 1.2700, 1.2550, 1.2520 Resistance levels: 1.2785, 1.2831, 1.2860, 1.2960, 1.3000, 1.3070, 1.3100, 1.3200

Now, the likelihood of a 75bp Fed rate hike fell to 35% in September from 80% (before the publication of the CPI index), according to the CME Group. At the same time, the mood of dollar buyers is supported by the statements of representatives of the Fed's leadership about the possibility of continuing the super-hard cycle of raising the interest rate. For example, San Francisco Federal Reserve Bank President Mary Daly said on Thursday that a 50 basis points rate hike in September "makes sense" given the latest economic data, including inflation. In a media interview, she highlighted the possibility of a 75 basis points rate hike at the Fed meeting in September if macro data so requires.

Considering the current situation and the weakening of the dollar against the background of the remaining high inflation, yesterday the gold quotes updated a 6-week high near the mark of 1807.00 dollars per ounce. One way or another, inflation in the world and the United States remains high, which makes investors resort to buying this popular defensive asset. Its quotes are extremely sensitive to changes in the monetary policy of the world's leading central banks and, especially, the Fed. If the leaders of the US central bank, after yesterday's release of inflation indicators, announce a softer scenario in the tightening cycle of monetary policy, then gold may receive additional support.