The Week Ahead 10th – 14th July: Q2 earnings season kicks off

<p>Welcome to Key to Markets preview of the Week Ahead.</p>
<h2>Currency Pair Performance</h2>
<p>5-day performance as of <strong>July 6, 2023. 10:30 GMT.</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24101 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1.png" alt="" width="602" height="267" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1-300×133.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: finviz.com</p>
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<h2>10 Big Stories Last Week</h2>
<p>In case you missed it…</p>
<p><strong>Hawkish FOMC minutes.</strong> The June FOMC minutes reinforced the Fed’s hawkish outlook and confirmed that June was a “skip” rather than a “pause.”</p>
<p><strong>Eurozone business activity contracts.</strong> The eurozone composite PMI fell to 49.9 in June, down from 52.8 and into contraction, raising concerns of a prolonged recession in the region.</p>
<p><strong>Russia &amp; Saudi Arabia cut oil output.</strong> Saudi Arabia extended its 1 million bpd voluntary production cut to August, and Russia announced a 500k bpd cut to support oil prices.</p>
<p><strong>Meta launched the “Threads” app.</strong> This free, text-based app will rival Twitter, where some users are looking for alternatives, disappointed by Elon Musk’s changes.</p>
<p><strong>China restricts exports of chipmaking metals.</strong> As the US-Sino tech war escalates, China will curb exports of key materials used to make computer chips.</p>
<p><strong>USD/CNY rises to an 8-month high.</strong> Weak PMI data from China raises concerns that the recovery needs more steam. USD/CNY rose before the PBoC pledged to stabilise the currency.</p>
<p><strong>Treasury Secretary Yellen goes to China.</strong> Janet Yellen is the second official from the Biden administration to visit China. Yellen was seeking to create more talks amid US–China tensions.</p>
<p><strong>Ryanair posted record passenger numbers.</strong> The budget airline saw passenger numbers hit 17.4 million in June, a 9% rise year on year.</p>
<p><strong>Netflix hit a 17-month high.</strong> Success cracking down on password sharing has helped the streaming giant turn bear Goldman Sachs. The investment bank upwardly revised the stock to neutral from sell.</p>
<p><strong>BTC/USD hit a 13-month high.</strong> The Nasdaq has refiled its application to list BlackRock’s ETF after the US securities regulator raised concerns over the initial filing.</p>
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<h2>Chart of the Week</h2>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24104 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2.png" alt="" width="602" height="351" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2-300×175.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: Tradingview</p>
<p>Meta’s share price has surged over 135% YTD and trades at a 17-month high.</p>
<p>As well as being part of a wider tech really, investors have been impressed by Meta’s year of efficiencies, which saw extensive job cuts and a focus on core businesses. However, the stocks’ latest drive higher comes as Meta launches Threads to rival Twitter.</p>
<p>The app launched on Thursday and importantly isn’t starting from scratch, instead using the existing social network for Instagram and porting it over to Threads, giving it an instant network, and an immediate advantage to other firms that have attempted to create a platform similar to Twitter. Meta has proved again that it is good at deliberately cloning rivals and making it work.</p>
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<h2>5 Things to Watch This Week</h2>
<p><strong>1. US CPI</strong><br />
US CPI data will be released on Wednesday, 12th July. The pace of inflation eased to its slowest rate in over two years in May, at 4% YoY; however, sticky core inflation has kept pressure on the Federal Reserve to continue tightening monetary policy. The upcoming report is expected to show that headline inflation cooled further to 3.2%, still above the Fed’s 2% target. Core inflation is expected to remain above headline inflation for another month.</p>
<p><strong>2. US Q2 banks earnings</strong><br />
Q2 earnings season kicks off this week with the release of quarterly earnings from Citigroup, Wells Fargo, and JP Morgan on Friday, July 14th. The earnings come as the bank’s share price rebounded after the 23 banks passed the Federal Reserve’s stress test. The KBW banks index posted its first monthly gain since the March banking sector turmoil. Net interest income will remain a key focus, as well as deposit flows and bad loan provisions.</p>
<p><strong>3. BoC rate decision</strong><br />
The BoC surprised the market by hiking interest rates by 25 bps in the previous meeting after pausing hikes for 4 months. Since that meeting, Canada’s CPI slowed to 3.4%, the smallest increase in 12 months. However, on a monthly basis, CPI rose 0.4%, with price pressures coming from the services industry. Meanwhile, the labour market remains strong. As a result, it’s a 50/50 call as to whether the BoC will hike again in July.</p>
<p><strong>4. UK GDP &amp; average earnings data</strong><br />
UK unemployment data and wage growth will be released on Tuesday, 11th July, and UK GDP data on Thursday, 13th July. Monthly average earnings have been notably strong in recent months, which, together with services inflation, has ensured that CPI remains sticky. Another month of solid average earnings and growth in the economy, albeit modest, could unnerve the BoE ahead of the August rate decision. After a 50-bps hike in June, the market is pricing in another 50-bps hike in August.</p>
<p><strong>5. ECB minutes &amp; EC growth forecasts</strong><br />
The minutes to the June ECB meeting as well as the latest European Commission growth forecasts, will be released on Thursday, July 13th. The ECB hiked rates by 25 basis points at the June meeting and President Christine Lagarde warned that more hikes are needed. However, inflation in the region has been cooling rapidly, with Spain, for example, posting CPI below 2%. ECB speakers have highlighted divisions between policymakers over how high rates need to go. The minutes, as well as the EC growth forecasts could provide further clues over where peak rates could be.</p>
<p><strong>Economic Calendar Highlights</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24107 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3.png" alt="" width="602" height="425" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3-300×212.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: FXStreet.com</p>
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<h2>Technical Analysis:</h2>
<p>TA of the major asset classes (Forex &#8211; Commodities &#8211; Indices…).</p>
<p><strong>EUR/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24110 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>EUR/USD is in sideways trend with no clear swings, while above the 50 SMA.<br />
The price continues to bump along on top of the 50 SMA. Although lower lows and highs were formed, the action is more of a correction than a trend. A dip below 1.08 may be needed to encourage new bulls to resume the prior uptrend.</p>
<p><strong>GBP/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24113 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>GBP/USD is in an uptrend, making higher lows and highs and above the 50 SMA.<br />
Price has bounced after a correction to 1.26 but stalled with a series of indecisive candles under 1.275. The bias is for the uptrend to continue but a failure to get through 1.275, followed by a drop under 1.26, would be bearish.</p>
<p><strong>USD/JPY (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24116 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>USD/JPY is in an uptrend, making higher highs and lows and above the 50 SMA.<br />
Dollar-yen continues to trend strongly higher with few down-days. The latest up-move has taken it to 145, where the price consolidates in a tight range before potentially resuming the uptrend.</p>
<p><strong>Gold (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24119 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XAU/USD is in a downtrend with lower lows and highs below the 50 SMA.<br />
There has been a second successful retest of the broken support at 1930 as resistance, suggesting further downside. So far, 1900 has held up as support. A break back over 1930 would negate the bearish bias.</p>
<p><strong>Brent Oil (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24122 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XBRENT is in a sideways trend but above the 50 SMA.<br />
In a notable bullish development, the price has closed two consecutive days above the 50 SMA, potentially marking a break to the topside of the long term sideways range. However, a fakeout over the SMA could be a sign a break lower is to follow.</p>
<p><strong>US500 (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24125 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-6-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XUS500 is in an uptrend, making higher highs and lows above the 50 SMA.<br />
The uptrend remains intact while above the 50 SMA. However, a fakeout over the last high at 4430 accompanied by bearish RSI divergence forewarns of a bigger correction or possible trend reversal.</p>
<p>Thank you very much for reading – and have a great week trading!</p>
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<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/the-week-ahead-10th-14th-july-inflation-data-from-the-usa-and-eu-24100/">The Week Ahead 10th &#8211; 14th July: Q2 earnings season kicks off</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>