EUR/USD closed up 0.18% on Thursday, 11th August 2022, at 1.0317. The risk of economic contraction continues and the euro is under pressure due to political instability in Italy. This winter, with inflation peaking, the eurozone will likely see a ...
1. Forex Market Insight
EUR/USD dropped to a 20-year low and near parity on Monday, 11th July 2022.
The dollar was boosted by fears that the energy crisis will plunge the eurozone into recession, while the Federal Reserve is expected to raise interest rates faster and more sharply than other central banks.
EUR/USD hit a low of $1.0033 on Monday, 11th July 2022, the weakest since December 2002.
The dollar index hit a high of 108.26 on Monday, 11th July 2022, the highest since October 2002, and closed at 108.21, up about 1.24%.
(EUR/USD 1-hour chart)
We focus on the 1.0184-line today. If EUR runs steadily below the 1.0184-line, then pay attention to the support strength of the two positions of 1.0070 and 0.9967. If the strength of EUR breaks above the 1.0184-line, then pay attention to the suppression strength of the two positions of 1.0357 and 1.0529.
GBP Intraday Trend Analysis
Bank of England Governor Bailey said on Monday, 11th July 2022, that he still thinks inflation could fall sharply next year, broadly in line with the central bank’s forecast published in early May.
Bailey told a parliamentary committee that he did not think the new forecasts being prepared by Bank of England staff, to be released on 4th Aug 2022, would show a fundamentally different picture.
Markets now see a near 70% chance of a massive 50 basis point rate hike by the Bank of England on 4th August 2022.
The central bank has raised borrowing costs five times since December.
(GBP/USD 1-hour chart)
GBP is mainly focused on the 1.1853-line today. If GBP runs below the 1.1853-line, it will pay attention to the suppression strength of the two positions of 1.1795 and 1.1764. If GBP runs above the 1.1853-line, then pay attention to the suppression strength of the two positions of 1.1916 and 1.1970.
2. Precious Metals Market Insight
Gold hovered near a nine-month low on Monday, 11th July 2022, as bets on aggressive interest rate hikes by the Federal Reserve and a rising U.S. dollar dented its appeal.
Despite the risk of recession, investors have recently chosen the dollar over gold, pushing it to a nearly 20-year peak and weakening the appeal of gold to overseas buyers.
At the same time, since gold does not pay interest, the interest rate hike raises the opportunity cost of holding gold.
(Gold 1-hour chart)
Gold pays attention to the 1733-line today. If the gold price runs steadily below the 1733-line, then it will pay attention to the support strength of the 1722 and 1701 positions. If the gold price breaks above the 1733-line, then pay attention to the suppression strength of the two positions of the 1751 and 1768.
3. Commodities Market Insight
WTI Crude Oil
Oil prices were mixed on Monday, 11th July 2022 as the market weighed a global pandemic that will lead to lower demand and ongoing concerns about tight supply.
The Federal Reserve is expected to continue raising interest rates, and last week oil speculators cut their net long positions in futures and options on the New York Stock Exchange and Intercontinental Exchange (ICE) to their lowest since April 2020.
(Crude oil 1-hour chart)
Oil prices focus on the 102.52-line today. If the oil price runs above the 102.52-line, then focus on the suppression strength of the two positions of 105.01 and 107.52. If the oil price runs below the 102.52-line, then pay attention to the support strength of the two positions of 99.50 and 97.33.
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