Forex Signals July 19: UK, Canada Retail Sales Closing the Week

Yesterday started with the employment report from Australia, showing a decent jump of 50.2K new jobs in June, confirming that the employment sector remains on solid ground. That sent the AUD 20 pips higher against the USD in the Asian session, but at the end of the day, AUD/USD ended up lower as the USD made a comeback in the US session.

In the European session, the UK employment report came on the soft side, however, the unemployment rate declined by 2 points. GBP/USD returned back below 1.30 and ended the day around 100 pips lower from Wednesday’s highs. The European Central Bank left interest rates at 3.75% as expected, with the future rate policy projections remaining largely unchanged.

The US initial jobless claims headline came in well above expectations, sparking concerns about the US job market. However, a closer examination revealed that the numbers were inflated due to the hurricane in Texas and are expected to reverse in the coming week. These developments could potentially benefit the US dollar, which ended the day as the strongest currency.

Today’s Market Expectations

The UK GfK Consumer Confidence showed a slight improvement, but came below expectations and it still remains in negative territory, which indicates that the UUK consumer is feeling the weight from high prices and elevated borrowing costs. However, the GBP was little moved by the report.

June’s CPI headline inflation came in at 2.8% year-over-year, slightly below the expected 2.9%. This matches the previous month’s rate, indicating a steady inflation rate. The National Core CPI, excluding fresh food, stood at 2.6% year-over-year, aligning with expectations and showing a slight increase from May’s 2.5%. The National Core CPI, excluding both food and energy, rose to 2.2% from the previous month’s 2.1%.

This steady inflation rate, consistent with the previous month’s figures, suggests that overall price increases remain stable. The slight uptick in the core inflation measure, excluding fresh food, points to underlying price pressures that are gradually increasing. Similarly, the increase in core inflation, excluding both food and energy, indicates that inflationary pressures remain persistent even when volatile items are excluded. These inflation figures reflect a stable yet gradually increasing price environment in Japan, which might influence the Bank of Japan’s future monetary policy decisions.

In the US session we have two FED members holding speeches to close the week, Bostic and Williams, who might offer some volatility before the day closes. However, before that we have the retail sales report from Canada, which is expected to be negative. Both headline and core retail sales are expected to decline by 0.5% in May, which would send the CAD lower, indicating that the Canadian consumer is feeling the pressure from high borrowing costs.

Yesterday the volatility was high again, with safe havens falling off the high ground and getting us on the wrong side in the meantime. However, we had winning trading signals in the stock market and forex, so we ended the day with 5 winning forex signals and three losing ones.

Gold Retreats $40 After Printing A New High

Gold continued the surge higher this week with the price printing a new record high at $2,483 on Wednesday, but yesterday we saw a bearish reversal and a retreat more than $40. The 20 SMA (gray) and the 50 SMA (yellow) which were acting as support during the bullish move were broken, However, the 100 SMA (green) held as support on the H1 chart, where we decided to open a buy Gold signal.

XAU/USD – H1 chart

USD/JPY Bouncing Off the 100 SMA

The previous surge in USD/CHF was driven by the Swiss Franc’s ongoing weakness after the Swiss National Bank (SNB) implemented two consecutive rate cuts in recent meetings. However, the pair has declined over the past two months as the likelihood of the Federal Reserve cutting interest rates has increased due to the weakening US economy. Meanwhile, traders anticipate the SNB will halt rate reductions, providing additional support to the CHF. After briefly rising above the 50-day Simple Moving Average (SMA) (yellow) in May, the price has since dropped to lows of 0.80, falling below all moving averages on the daily chart. Yesterday, the decline intensified, with the pair falling 100 pips, forming a significant bearish candlestick.

USD/JPY – Daily Chart

Cryptocurrency Update

Bitcoin Stabilizes Above 65K

Bitcoin broke below the $60,000 after experiencing a significant decline earlier this month. The Cryptocurrency market value declined, with Bitcoin falling to $53k however, buyers came back and they have pushed the price above 60,000 again, pushing it above moving averages. However the reversal has stalled and BTC is consolidating close to $65,000.

BTC/USD – Daily chart

Ethereum Approaches $3,500

Ethereum has been making lower highs since early March, even with the introduction of the ETH ETF. It reached a peak of $3,83. Th2 before reversing lower in June and falling below $3,000 early this month. However, buyers stepped in and pushed the price to the 50 daily SMA (yellow) which turned into resistance, rejecting the price.

ETH/USD – Daily chart