ECB Laragde’s talk favors Euro

EUR/USD has made the positive moment upon recent bounce in the US Dollar and are expecting the ECB monetary policy.  The European Central Bank’s (ECB) new strategy on inflation targeting allows more flexibility and preparedness for a future crisis, the central bank’s policymaker Yannis Stournaras said in an opinion column in Greece’s Kathimerini newspaper.

European Central Bank President Christine Lagarde told investors to prepare for new guidance on monetary stimulus in 10 days, and signaled that fresh measures might be brought in next year to support the euro-area economy after the current emergency bond program ends. Speaking to Bloomberg Television days after the ECB raised its inflation goal to 2% and acknowledged it may overshoot the target, Lagarde said the July 22 Governing Council session — previously expected to be relatively uneventful — will now have “some interesting variations and changes.” And also said  she sees policy change in July and possible 2022 measures. ”PEPP may be followed by a transition into a new format,” she added.

The ECB’s 25-member Governing Council agreed in June to continue running emergency bond purchases at an elevated pace this quarter, though the account of the meeting showed diverging views. She also agreed that the new inflation target “might take a little longer” to reach, but said the more important issue is “the acceptance and the tolerance” that a transitory and moderate inflation overshoot may be needed as part of the commitment to restoring price stability.

Starting out a fresh week, covid concerns remain unabated, as Sydney extends the lockdown restrictions amid escalating outbreaks. At the same time The European Union says it now has enough doses to meet its goal of vaccinating 70 per cent of the region’s adult population by the end of this month.  Meanwhile, markets remain cautious ahead of the US inflation and Fed Chair Jerome Powell’s testimony on the semi-annual Monetary Policy Report released last Friday.

EUR/USD 4 Hour Chart:

Support: 1.1840 (S1), 1.1804 (S2), 1.1784 (S3).

Resistance: 1.1896 (R1), 1.1916 (R2), 1.1952 (R3).

Amidst this EURUSD remains bullish moment upon the Lagarde talk and Greenback recent bounce. We expect a bullish trend for EURUSD.

BTC/USD Weekly Forecast (12th July 2021 – 16th July 2021)

Fundamental view:

Bitcoin price has been on a slow downtrend last few days and this week also it has fell against the greenback. After the Chinese miners are under siege, the so-called ‘war on crypto’ has expanded to other regions. In Europe, one of the largest cryptocurrency exchanges in the world Binance has paused bank deposits due to “events beyond [its] control.” UK’s Financial Conduct Authority (FCA) issued warnings to Binance for offering complex cryptocurrency financial instruments to British citizens without obtaining a license to conduct regulated activity.

Whereas New York State Senator Rachel May submitted a bill on July 2 to require the state public officers to disclose their cryptocurrency holdings on the annual statement of financial disclosure.

The major economic events deciding the movement of the pair in the next week are WASDE Report at July 12, Federal Budget Balance at July 13, EIA Crude Oil Stocks Change, Fed Chair Powell Testimony at July 14, Philadelphia Fed Manufacturing Index, Initial Jobless Claims at July 15 and Retail sales monthly report at July 16 for US.

BTC/USD Weekly outlook:

Technical View:

Last week’s high was 1.77% lower than the previous week. Maintaining high at 35894.9 and low at 32012.7 showed a movement of 3882 pips.

In the upcoming week we expect BTC/USD to show a bearish trend. The Instrument is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 31850.3 may open a clean path towards 29990.4 and may take a way down to 27968.1. Should 35732.5 prove to be unreliable resistance, the BTCUSD may raise upwards 37754.8 and 39614.7 respectively. In H4 chart bearish gartley pattern formation favors prospects of a bearish trend. Bearish harami pattern constructs a bearish outlook for the pair in the upcoming week.

Preference
Sell: 33870.9 target at 29991.4 and stop loss at 35737.5

 

Alternate Scenario
Buy: 35737.5 target at 39613.7 and stop loss at 33870.9

XAU/USD Weekly Forecast (12th July 2021 – 16th July 2021)

Fundamental view:

Gold has rallied against greenback in this week. US bond yields have plunged in the past week, which supported gold prices. The reason of gold support could be by pointing to fears of the Delta covid variant that would knock down the recovery, at least temporarily. Other reason may be short-lived pause in the issuance of new bonds.  Whereas less return on safe US debt makes the precious metal more attractive, yet the correlation between both asset classes – as well as that with the dollar – has eroded. When yields finally advanced late in the week, XAU/USD received a small boost.              

The major economic events deciding the movement of the pair in the next week are WASDE Report at July 12, Federal Budget Balance at July 13, EIA Crude Oil Stocks Change, Fed Chair Powell Testimony at July 14, Philadelphia Fed Manufacturing Index, Initial Jobless Claims at July 15 and Retail sales monthly report at July 16 for US.

XAU/USD Weekly outlook:

Technical View:

Last week’s high was 1.30% higher than the previous week. Maintaining high at 1818.3 and low at 1784.4 showed a movement of 339 pips.

In the upcoming week we expect XAU/USD to show a bullish trend. The Instrument is trading above the 100 Simple Moving Average and the MACD trades to the upside. A solid breakout above 1822.6 may open a clean path towards 1837.4 and may take a way up to 1856.6. Should 1788.7 prove to be unreliable support, the XAUUSD may sink downwards 1769.5 and 1754.7 respectively. In H4 chart Ascending Triangle breakout favors prospects of a bullish trend. Also to be noted Bullish harami formation exerts the expectation of uptrend for the pair.

Preference
Buy: 1805.8 target at 1836.4 and stop loss at 1783.7

 

Alternate Scenario
Sell: 1783.7 target at 1755.9 and stop loss at 1805.8

AUD/USD Weekly Forecast (12th July 2021 – 16th July 2021)

Fundamental view:

The Aussie is down for a second consecutive week, trading near a fresh 2021 low. The US dollar appreciated against the aussie on the back of risk-aversion, which boosted demand for safe-haven assets. Whereas US government bond yields soared, sending yields to their lowest levels since last February. On the other hand, Australia has extended lockdowns amid increasing covid cases. In Sydney, restrictive measures were extended to July 16 after reporting 44 new cases on Friday. The slow vaccination rate in the country plays a negative role, as only 9% of the population has been immunized.

US ISM Non-Manufacturing Prices Paid on 6th July and US Consumer Credit monthly report on 8th July created downtrend whereas Australia Retail Sales monthly report and Australia ANZ Job Advertisements monthly report on 5th July and US EIA Cushing Crude Oil Stocks Change on 8th July created uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are US WASDE Report at July 12, NAB Business Confidence, US Federal Budget Balance at July 13, US Fed Chair Powell Testimony at July 14, Australia Employment Change, US Initial Jobless Claims at July 15 and US Retail sales monthly report at July 16.

AUD/USD Weekly outlook:

Technical View:

Last week’s high was 0.04% lower than the previous week. Maintaining high at 0.7598 and low at 0.7409 showed a movement of 189 pips.

In the upcoming week we expect AUD/USD to show a bearish trend.  The currency pair is trading below the 200 Simple Moving Average and the MACD trades to the downside. A solid breakout below 0.7399 may open a clean path towards 0.7310 and may take a way down to 0.7210. Should 0.7588 prove to be unreliable resistance, the AUDUSD may raise upwards 0.7688 and 0.7777 respectively. In H4 chart rounding top pattern favors prospects of a bearish trend. Also to be noted three inside down pattern formation exerts the expectation of downtrend for the pair.

Preference
Sell: 0.7495 target at 0.7311 and stop loss at 0.7593

 

Alternate Scenario
Buy: 0.7593 target at 0.7776 and stop loss at 0.7495