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Accendo’s Foreign Exchange Forecasts, Monday 4 July

FX
Macro observations

US Dollar Basket (-)

Overview

The first half of 2016 closed off in uncharacteristically volatile fashion due to that surprise Brexit vote in the UK. This certainly hasn’t been limited to equity markets either – obviously the GBP has been hit with additional pressure now evident given the Bank of England’s intention to apply some economic stimulus to the UK economy this summer.

H2 is likely to provide similar conditions also as we glean more details about how the UK and Europe are to move forward from here. Expect continued GBP and EUR weakness, relative USD strength (It’d be mad to predict a Fed rate cut, but stranger things have happened) and Brexit contagion to test the resilience and cohesion of the remaining 27 EU  member states. Considerable political turbulence should be expected in the UK as Remainers try to find legal loopholes enabling us to not leave the EU, while Leavers fight over who will lead negotiations.


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

Monday 4 July

UK Economic Announcements
09:30 PMI Construction

Tuesday 5 July

UK Economic Announcements
00:10    BRC Shop Price Index

Intl Economic Announcements
10:00    Retail Sales (EU)

Wednesday 6 July

Intl Economic Announcements
07:00    Factory Orders (GER)
13:30    Balance of Trade (US)
15:00    ISM Non-Manufacturing (US)

Thursday 7 July

UK Economic Announcements
08:30    Halifax House Price Index
09:30    Industrial  / Manufacturing Production

Int. Economic Announcements
07:00    Industrial Production (GER)

Friday 8 July

UK Economic Announcements
09:30    Balance of Trade

Int. Economic Announcements
07:00    Balance of Trade (GER)
13:30     Non-Farm Payrolls, Unemployment Rate (US)
20:00    Consumer Credit (US)


 

GBP/USD (‘Cable’)

GBP/USD (daily)
GBPUSD daily (-)

GBP/USD (hourly)

GBPUSD hourly (-)

Technicals (based on daily price data unless otherwise stated)

  • GBP/USD looks settled into a new trading range between 1.315 and 1.345
  • RSI and Stochastics still oversold

 

GBP/EUR

GBP/EUR (daily)
GBPEUR daily (-)

GBP/EUR (hourly)

GBPEUR hourly (-)

Technicals (based on daily price data unless otherwise stated)

  • Support found around 1.19045
  • Bullish test of 24 Jun falling highs
  • Daily RSI still oversold, hourly RSI back in bullish territory

 

EUR/USD

EUR/USD (daily)
EURUSD daily (-)

EUR/USD (hourly)

EURUSD hourly (-)

Technicals (based on daily price data unless otherwise stated)

  • EUR/USD is trying to bed in above the 200-day moving average
  • RSI & Stochastics falling highs
  • MACD & Momentum falling highs

 

For information on deliverable FX, including how you can save thousands on currency exchange, put in a call to our trading floor on 0203 030 4500. It’s all part of the service!

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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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