Sterling Recovers after Strong Retail Sales; Dollar Slips after Yesterday's Rebound
| Action Insight Daily Report 7-21-23 |
Sterling Recovers after Strong Retail Sales; Dollar Slips after Yesterday's Rebound |
British Pound is making broad recoveries following stronger than anticipated retail sales, although signs of a durable rebound remain elusive. Concurrently, Japanese Yen displayed general weakness. Despite solid inflation data from Japan, the figures were not robust enough to force a policy shift from BoJ. Australian and New Zealand Dollars trailed as the next weakest, while Dollar pared some of its gains following yesterday's rally. Canadian Dollar remained mixed, as investors anticipate retail sales data from Canada. Looking at the week as a whole, Sterling remained one of the worst performers as traders scaled back their bets on aggressive rate hike from BoE following the latest CPI data. New Zealand Dollar fared slightly worse, with Yen and Aussie not far behind. Contrarily, Canadian Dollar emerged as the strongest performer, followed by Dollar, and then Swiss Franc. Technically, the breaks of 1.1173 minor support in EUR/USD and 0.8629 minor resistance in USD/CHF argue that Dollar is turned into a consolidation phase. There is no clear sign of reversal for the greenback yet, and thus upside of current recovery could be limited. Gold is also in a retreat after hitting 1987.22. But as long as 1945.57 support holds, further rise is in favor to 2000 handle and above after the consolidation completes. In Asia, Nikkei closed down -0.57%. Hong Kong HSI is up 0.53%. China Shanghai SSE is down -0.05%. Singapore Strait Times is down -0.05%. Japan 10-year JGB yield is up 0.0198 at 0.479. Overnight, DOW rose 0.47%. S&P 500 dropped -0.68%. NASDAQ dropped -2.05%. 10-year yield rose 0.112 to 3.854. |
EUR/GBP Daily Outlook Daily Pivots: (S1) 0.8633; (P) 0.8666; (R1) 0.8682; More... Intraday bias in EUR/GBP is turned neutral with current retreat. Outlook is unchanged that fall from 0.8977 might have completed its five-wave sequence. Firm break of 0.8717 support resistance will solidify this bullish case and target 0.8977 resistance next. On the downside, though, below 0.8619 minor support will mix up the outlook and turn bias back to the downside for retesting 0.8502 low. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:01 | GBP | GfK Consumer Confidence Jul | -30 | -26 | -24 | | 23:30 | JPY | National CPI Y/Y Jun | 3.30% | 3.20% | 3.20% | | 23:30 | JPY | National CPI Core Y/Y Jun | 3.30% | 3.30% | 3.20% | | 23:30 | JPY | National CPI Core-Core Y/Y Jun | 4.20% | 4.20% | 4.30% | | 06:00 | GBP | Retail Sales M/M Jun | 0.70% | 0.20% | 0.30% | 0.10% | | 06:00 | GBP | Public Sector Net Borrowing (GBP) Jun | 17.7B | 20.7B | 19.2B | 15.8B | | 12:30 | CAD | Retail Sales M/M May | 0.50% | 1.10% | | 12:30 | CAD | Retail Sales ex Autos M/M May | 0.20% | 1.30% | | 12:30 | CAD | New Housing Price Index M/M Jun | 0.00% | 0.10% |
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