Today, In the European session we get UK Inflation data along with the European Inflation data both for June.
This article is originally referred from IronFX News.
Theresa May wins important vote in parliament
On Tuesday, PM May won the customs union vote against an amendment to trade legislation.
Very surprisingly the vote was won thanks to help from the Labour Party.
Parliament voted 307 to 301 against an amendment to trade legislation in a vote that was closely followed by currency markets.
The vote was considered a test of May’s ability to deliver a British exit from the European Union and keep her job.
It must be noted that earlier, May lost on a separate vote which forced her to keep Britain inside the EU’s regulatory regime for medicines.
PM Theresa May, has been under huge pressure and doubt coming from her own country, and in our opinion, the win of yesterday’s important vote provides some confidence and hope for future developments.
Furthermore, earlier on Tuesday, BOE Marc Carney warned that the consequences of a no Brexit deal could significantly hurt European financial markets.
Additional news for the Brexit or the UK political scene could create volatility on GBP.
Despite Mays win on the vote, Cable moved in a bearish sentiment yesterday forcing us to rearrange are support and resistance levels.
It is our opinion, that the UK inflation data to be released today in the European morning could provide some support for GBP.
From a technical perspective, it must be stated that the RSI indicator on the 4 hour chart is very near the reading of 30 which could imply an oversold market with the potential to change direction for the day.
Should the bulls take over the market we could see the pair breaking the 1.3150 (R1) resistance line continuing higher aiming for the 1.3192 (R2) resistance level.
Should the bears dominate the pairs direction we could see it breaking the 1.3104 (S1) support line and aim for the 1.3074 (S2) support barrier.
Powell’s testimony helps boost the US Dollar
The dollar rallied yesterday after Chairman Powell said the Fed will continue to slowly raise interest rates “for now’’.
Powell stated, the reason was to keep inflation near its target amid robust conditions in the U.S. labour market.
Comments like “the job market has strengthened” and “inflation has increased mostly due to gasoline and energy prices” stood out.
He also added “unemployment was at it’s the lowest and that the US economy grew in a solid pace the first half of the year”.
With basically a revision of the positive economic outlook in the US the USD bulls were set free during the American session.
EURUSD dropped during Powell testimony and landed very near our 1.1640 (S1) support level.
Today, in the European morning the pair could follow up on sideways movement as the financial data to be released from the Eurozone could be neutral for the common currency.
However, in the American session the pair may prove to be sensitive to the US financial data to be released or Fed Chairman Powel testimony later on.
Should the pair find extensive buying orders along its path we could see it rising and breaking the 1.17150 (R1) resistance line.
Should it come under selling interest by the market, we could see the pair aiming for the 1.1640 (S1) support barrier.
At this point, a small comment must be made on Crude Oil, as the commodity has dropped approximately $5 in the past 7 days.
The Trump Putin meeting plunged Oil prices as comments made from both presidents indicated a joint attempt to regulate Oil prices.
Also the US considerations on waivers on countries importing Oil from Iran helped drop prices.
In todays other economic highlights:
In the European session we get UK Inflation data along with the European Inflation data both for June.
In the American session we get the Building Permits and Housing Starts both for June.
Later in the American session we get the EIA weekly crude oil stocks reading.
As for speakers in the US session Fed Chair Powel speaks.
Original Source: IronFX News