Accendo's Foreign Exchange Forecasts, Monday 8 August

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Accendo’s Foreign Exchange Forecasts, Monday 8 August

Macro observations

One of the most pertinent drivers last week was the surprisingly strong US jobs report. US rate hike expectations increased on the news with the probability of a September move rising, but a December hike more likely still. Markets still appear to be pricing in neither, however, as US and global monetary policies diverge like never before.

So recent downside in EUR/USD can be put down to strong US data and increased rate hike expectations and not Eurozone rate cut expectations. GBP/USD, on the other hand, is dictated by the Bank of England’s battle plan although this is merely added to by the US aspect as data over there gets better.

Key data this week (Sign up here to get our daily live macro-calendar)

Monday 8 Aug

Intl Economic Announcements
07:00 Industrial Production (GER)

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Tuesday 9 Aug

UK Economic Announcements
00:01 BRC Sales Monitor

Intl Economic Announcements
07:00 Balance of Trade (GER)
15:00 Wholesales Inventories (US)

—

Wednesday 10 Aug

UK Economic Announcements
00:01 BRC Shop Price Index

Intl Economic Announcements
12:00 MBA Mortgage Applications (US)
15:30 Crude Oil Inventories (US)

—

Thursday 11 Aug

UK Economic Announcements
00:01 RICS Housing Market Survey

Int. Economic Announcements
13:30 Initial Jobless Claims, Continuing Claims (US)

—

Friday 12 Aug

Int. Economic Announcements
07:00   Consumer Price Index GER
10:00   Industrial Production EU
13:30   Producer Price Index, Retail Sales US
15:00   Business Inventories, U. of Michigan Confidence US

GBP/USD (‘Cable’)

GBP/USD (daily)

Technicals

Testing support at 1.30148 (lower Bollinger band)

GBP/EUR

GBP/EUR (daily)

Technicals

GBP/EUR is following the floor of its 10 month falling channel
Break below support at 1.188
Additional support at the lower Bollinger band 1.17433 and the SAR at 1.17516

EUR/USD

EUR/USD (daily)

Technicals

Breakdown below the 200-day moving average
Bearish cross by 50- and 200-day moving averages
A break below the 20-day moving average could see a revisit of rising support at 1.1 and the SAR at 1.09427 just below

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research

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