GBP/USD Recovers above 1.2100

The major currency pair GBP/USD has regained and is now trading above 1.2100 after upbeat UK Retail Sales.

The Office for National Statistics released the UK CPI data, which came out better-than-expected of 2.1% compared with the forecast of 1.9%. Since the data was released the GBP is now pushing the rates back above the 1.21.  

One of the most surprising elements was that department stores growth increased for the first time this year with month-on-month growth of 1.6%,  this follows six consecutive months of decline.

According to this move, the markets are ignoring the long ongoing Brexit worries and trade concerns and the retails sales data outweigh downward contributions from transport services and domestic fuels principally electricity and gas. 


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Gold Drops Dramatically

Gold drops $57 in value over four hours (3.71%)!

It was no surprise that Gold fell dramatically yesterday from highs of $1535 to lows of $1478, following the recent falls in treasury bond rates, Trump’s tax cuts, central banks leaning towards easing and a slowing global economy.

The $57 drop in price (3.71%) hit the markets over a four-hour period came as the decision to delay tariffs and to put trade negotiations back on officials calendars in two weeks. As a reaction to this news, stocks loved it, but the price of gold didn’t.

This is because, in such circumstances, short term investors move away from risk-on markets. Normally this kind of candle patterns indicates indecision in the market place, however as gold has been trading at six-year highs recently, the move represents buyer exhaustion.

It's expected that investors will now turn their attentions to the stock markets and break-outs in Indices as is visible on the H1 Dow Jones chart.

Based on leading technical analysis, the gold is expected to continue to falter over the coming weeks.

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Non Farm Payroll Alert

The U.S Non-Farm Payrolls will be released Friday, 2nd of August 2019 13:30 GMT and is a key economic indicator that can cause volatility in the markets. 

What to Expect this Month?
Non-Farm Payrolls are expected to have increased by 164,000 last month, as indicators point to another solid month of job expansion, yet down on the previous months report that came in at 224,000. 

The ADP Employment report improved to 156k from an upwardly-revised reading of 112k last month and the ISM Manufacturing Survey employment component fell to 51.7, down nearly 3 points from last month’s 54.5 reading, whilst the four week moving average of initial unemployment claims remains near a half-century low at 211,500.

This report is being touted as crucial following the Fed’s decision to cut interest rates for the first time since 2008, which was also followed up by a rambling press conference from Fed chairman Powell, living up to his “cover-all-bases”. During the press conference he also emphasized that it wasn’t a one-and-done decision, suggesting traders could still see another interest rate reduction (or two) in the coming months.

Further to the Fed decisions, equity markets tanked after Donald Trump imposed 10% tariff on another 300 billion US dollar worth of Chinese goods that were exempt from duties to date. New tariffs came as a surprise just after a delegation of US officials returned from Shanghai. As it stands, it seems there is no willingness to resolve this yearlong trade dispute.

Opportunities Around the NFP Reports:
Regardless of the results of the Non Farm Payrolls, the markets always experience moves immediately after the release which offer traders excellent short-term trading opportunities. Positive or negative reports will affect market sentiment which can create new trends and trading opportunities.

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