Aussie and Kiwi Are Close to Highs, and the GBP Remains Vulnerable (Weekly Review)

Throughout the past week, interest in risky assets dominated the financial markets. Risk appetite stimulated demand on Asian stock exchanges, and such currencies as the AUD and NZD remained in demand, and are still traded near their correction highs. At the moment, it is difficult to predict whether they will break higher, but the longer the bulls are unable to break strong resistance, the higher the likelihood of a deep decline.

Amid the weakness of the USD and hopes for Brexit and a mutually beneficial UK trade deal with the European Union, the GBP/USD showed a positive mood all week, but was under pressure with the start of the new week, which forced it to retreat to the 26th figure. In the absence of real progress in the negotiations between London and Brussels, the GBP will remain in a vulnerable position, and its growth can be used for sales.

The EUR/USD remains clamped in the consolidation range. Above strong support around 1.1200, the chances of returning to correctional highs will remain high. In anticipation of the upcoming ECB meeting this week, the EUR/USD may remain within the range, and break through either the upper or the lower border at the event itself. In case of a reversal of the upward trend in the USD, in the long term, the pair can move in the direction of 1.1800.

Schedule for this week:

Monday, July 13
15:30 GMT – United Kingdom. Bank of England Governor Bailey Speaks;
18:00 GMT - USA. Federal Budget Balance.

Tuesday, July 14
02:00 GMT - PRC. Trade Balance;
06:00 GMT – United Kingdom. GDP;
06:00 GMT - United Kingdom. Manufacturing Production;
06:00 GMT - United Kingdom. Industrial Production;
06:00 GMT - Germany. Harmonised Index of Consumer Prices (HICP);
08:00 GMT - Eurozone. ECB Bank Lending Survey;
09:00 GMT - Germany. ZEW Economic Sentiment;
12:30 GMT - USA. Consumer Price Index (CPI); 
13:30 GMT - Switzerland. Swiss National Bank Chairman Thomas Jordan speaks.

Wednesday, July 15
03:00 GMT - Japan. Bank of Japan Interest Rate Decision;
03:00 GMT - Japan. Bank of Japan Press Conference and Monetary Policy Report;
06:00 GMT - United Kingdom. Consumer Price Index (CPI);
06:00 GMT - Japan. Bank of Japan Press Conference;
14:00 GMT - Canada. Bank of Canada Interest Rate Decision;
14:00 GMT - Canada. Bank of Canada Rate Statement;
15:15 GMT - Canada. Bank of Canada Press Conference.

Thursday, July 16
22:45 GMT – New Zealand. Consumer Price Index (CPI);
01:30 GMT - Australia. Employment Rate;
01:30 GMT - Australia. Unemployment Rate;
02:00 GMT - PRC. GDP;
06:00 GMT - United Kingdom. Unemployment Rate ILO (3M) (May);
11:45 GMT - Eurozone. ECB Interest Rate Decision;
12:30 GMT - Eurozone. ECB Press Conference and Monetary Policy Report;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - USA. Retail Sales.

Friday, July 17
Eurozone. Euro Summit;
09:00 GMT - Eurozone. Consumer Price Index (CPI);
12:30 GMT - USA. Housing Starts;
14:00 GMT - USA. Michigan Consumer Confidence.

Author: Anthony Porter, IAFT Analyst