Accendo's Foreign Exchange Forecasts, Monday 18 July

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Accendo’s Foreign Exchange Forecasts, Monday 18 July

Macro observations

Overview

Fed chatter sees the US central bank desperate to keep markets expectant of at least one US rate hike in 2016. However, with some form of economic stimulus widely expected from the Bank of England in August, policy divergence between Europe and the US is only set to widen.
A key test for the Euro will be the recapitalisation of Italy’s banks – badly needed but we’re still in the dark as to how exactly that will happen.
The GBP rallied last week after the Bank of England left rates unchanged. However, with stimulus of some sort expected in August, many are bearish on the currency at current levels.

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

Monday 18 July

UK Economic Announcements
00:01 Rightmove HPI m/m

Intl Economic Announcements
15:00 NAHB Housing Market Index

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Tuesday 19 July

UK Economic Announcements
09:30 Inflation (CPI, RPI, PPI, HPI)

Intl Economic Announcements
10:00 ZEW Economic Sentiment (DE & EZ)
13.30 Housing Starts & Building Permits (US)

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Wednesday 20 July

UK Economic Announcements
9:30 Unemployment & Wages

Intl Economic Announcements
07:00 Producer Price Inflation (DE)

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Thursday 21 July

UK Economic Announcements
09:30 Retail Sales

Int. Economic Announcements
08:00     Manufacturing & Services PMI (FR)
08:30     Manufacturing & Services PMI (DE)
08:30     Manufacturing & Services PMI (EZ)
12:45     ECB Policy Decision (EZ)
13:30     ECB Press Conference (EZ)
13:30     Philly Fed (US)
14:00     House Prices (US)
14:45     Manufacturing & Services PMI (US)
15:00     Existing Home Sales, Leading Index (US)

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Friday 22 July

UK Economic Announcements
11:00 CBI Industrial Order Expectations

Int. Economic Announcements
15:00 Consumer Confidence (EZ)

GBP/USD (‘Cable’)

GBP/USD (daily)

Technicals

Cable has held above the 1.32 level over the weekend
RSI bounced back from oversold, but still bearish
Stochastics making a bearish cross with its signal line

GBP/EUR

GBP/EUR (daily)

Technicals

GBP/EUR back in its 10-month falling channel having picked up support around 1.88

EUR/USD

EUR/USD (daily)

Technicals

Stochastics & RSI June falling highs
17-month sideways channel

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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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