Topic: Trade Bitcoin with FreshForex - page 6. (Read 4022 times)

For the fourth day, the news has been buzzing about the launch of Spot Ethereum ETFs (Exchange-Traded Funds). Everyone expected a huge influx of capital and that the price would skyrocket! On the first day alone, ETH-ETF surpassed $200 million!

But we didn't rush with the news, as in the meantime, the ETHUSD price dropped by 10%...

What happened?

Ethereum failed to hold above the critical support level of $3250, leading to a drop below $3150. This forced traders to reassess their strategies, considering the high volatility of the cryptocurrency. The simultaneous drop in Bitcoin and other cryptocurrencies further exacerbated investor uncertainty, prompting many traders to close their positions out of fear.


What factors are the loud media not considering?

Sell-offs by major holders: According to Farside Investors, on the first day of trading after the launch of the Ethereum-based ETF, the Grayscale Ethereum Trust (ETHE) lost $484.1 million. Farside Investors did not provide data on the iShares Ethereum Trust ETF (ETHA) created by Blackrock. However, according to the information published on the derivative's website, ETHA's capitalization level fell by $25,558 due to a 0.23% drop in share price.

Political uncertainty: For instance, the nominee for chairman of the Financial Services Commission (FSC) of South Korea, Kim Byung Hwan, urged the government to be cautious with the launch of spot ETFs linked to cryptocurrencies.

Everyone who wanted to buy has already bought: Some experts believe that since the 180-degree shift in the SEC's stance, all investors who wanted to buy Ethereum have already done so and hold ETH as an investment, primarily on the spot market.


However, FreshForex analysts believe that in the long run, Ethereum will inevitably rise. Once investors see real reasons for new purchases, not just the hype around the ETF launch, the influx of funds will stabilize and the price will start to increase. Currently, the price has fallen significantly close to the important psychological level of $3000, but a strong rebound has timely appeared. If you want to profit from future growth, buying at a lower price is a great entry point!

The Pound-Dollar pair consolidated near 1.2860 on the back of a weaker US Dollar, breaking a three-day losing streak during Asian trading on Friday. However, the upside potential of the major pair seems limited as market participants expect the Bank of England (BoE) to cut interest rates in August.

The U.S. economy grew faster than expected in the second quarter, according to the U.S. Commerce Department's preliminary estimate released on Thursday. U.S. gross domestic product (GDP) grew at an annualized rate of 2.8% in the second quarter, marking an acceleration from 1.4% growth in the first quarter. The figure was above the forecast of 2%.

Nevertheless, expectations for a September interest rate cut by the Federal Reserve (Fed) remain unchanged. Traders will be closely watching the release of US Personal Consumption Expenditures (PCE) data for June, which is due on Friday.

In addition, weekly U.S. initial jobless claims for the week ended July 20 rose 235,000 from the previous week's 243,000. The figure was below the consensus forecast of 238,000. Meanwhile, U.S. durable goods orders fell 6.6% in June compared to May's 0.1% increase, which was weaker than expectations of 0.3%.

As for the British pound, the Bank of England (BoE) is expected to cut the bank rate to 5% at its August meeting next week as inflation is expected to be near the central bank's target, according to most economists polled by Reuters. In addition, analysts at UBS said the Bank of England is expected to make its first rate cut of 25 basis points (bps) in early August and another 25 bps in November, bringing the interest rate to 4.75% by the end of 2024. “The key reason why we expect the MPC to cut rates is the recent data,” said UBS analysts.

Trading recommendation: Watch the level of 1.2860, on the rebound take Sell positions. If we consolidate above, take Buy positions.

EUR/USD is down by a third of a percent on Tuesday as investors are in anticipation of the twin bloc of purchasing managers' indices (PMIs) due out today in the EU and the US.

The pan-European PMI data will start the early European session on Wednesday and markets are expecting a slight rise in the EU services PMI to 53.0 in July after June's reading of 52.8.

In the U.S., the U.S. Services PMI for July is expected to decline slightly to 54.4 from June's reading of 55.3. Global markets are widely expecting a rate cut by the Federal Reserve (Fed) in September, and investors are closely monitoring US economic data looking for further signs of easing to confirm the rate outlook. Traders currently estimate a nearly 100% chance that the Federal Open Market Committee (FOMC) will cut rates by at least a quarter point during its September 18 meeting.

This week, quarterly US Gross Domestic Product data is scheduled for Thursday and Personal Consumption Expenditures (PCE) price index inflation is scheduled for Friday. U.S. second-quarter GDP is forecast to rise to an annualized rate of 1.9% from 1.4%, while core PCE inflation on Friday is expected to fall further to an annualized rate of 2.5% for the year ended June, down from 2.6% the previous month.

Trading recommendation: Watch the level of 1.0840, on the rebound take Buy positions. If it is consolidated below, take Sell positions.

The Japanese Yen (JPY) continues to rise for the second consecutive session on Tuesday, which could be due to increased risk aversion. Traders are evaluating next week's Bank of Japan (BoJ) interest rate decision, where an interest rate hike could support the Japanese Yen.

Toshimitsu Motegi, a senior ruling party official, called on the Bank of Japan (BoJ) to more clearly outline its plan to normalize monetary policy by gradually raising interest rates, stressing that the yen's excessive fall is hurting the economy, according to Reuters. Prime Minister Fumio Kishida added that normalizing the central bank's monetary policy will support Japan's transition to a growth-oriented economy.

The USD/JPY pair is facing challenges as the U.S. dollar (USD) is struggling due to growing expectations of a Federal Reserve (Fed) rate cut in September. Federal Reserve (Fed) Chairman Jerome Powell noted that he is increasingly hopeful of progress on inflation in recent months. Meanwhile, Fed Chairman Christopher Waller said that the time for a discount rate cut is approaching.

Trade recommendation: Trading predominantly Sell orders from the current price level.

The Pound-Dollar pair attracted some buying during the Asian session on Monday and for the time being seems to have paused its corrective decline from the 1.3045 area, or the yearly peak reached last week. Spot prices are currently trading around 1.2930, up more than 0.10% on the day, although they remain near the weekly low set last Friday.

The US Dollar (USD) is starting the new week on a weak note, reacting to political events in the US over the weekend, and is proving to be a key factor providing some support to the GBP/USD pair. After a long week of political turmoil, US President Joe Biden has declined to run in the 2024 presidential election. This in turn raises the chances of Donald Trump becoming the next US President, which, along with bets that the Federal Reserve (Fed) will cut interest rates in September, increases investor appetite for riskier assets and undermines the safe-haven US Dollar.

The British Pound (GBP), on the other hand, continues to receive support from Bank of England (BoE) policy in August. In fact, Bank of England Chief Economist Hugh Pill noted earlier this month that there is still some work to be done before the domestic permanent component of inflation disappears. To add to this, UK consumer inflation rose slightly more than expected in June, up 2% year-on-year. This came on the back of better than expected GDP growth of 0.4% in May and led investors to abandon expectations of a rate cut soon.

On Monday, no market-important economic data will be released either from the UK or the US, so the GBP/USD pair will be at the mercy of the USD price dynamics. Thus, the market's attention will remain focused on political events in the US, which will determine the broader risk sentiment and influence the buck's exchange rate. Nevertheless, the aforementioned fundamental background seems to be leaning in favor of bullish traders and supports the prospects for further intraday growth of the currency pair.

Trading recommendation: Trading predominantly Buy orders from the current price level.

Following the release of the latest inflation data on Friday, the Japanese Yen (JPY) has remained stable. The Japanese national consumer price index (CPI) for June remained unchanged at 2.8%, matching the previous month's reading and remaining at its highest level since February. Meanwhile, the core CPI increased to 2.6%, representing a slight rise from the previous reading of 2.5%. However, this figure remains below the consensus forecast of 2.7%.

Japan's 10-year government bond yield is currently trading at around 1.04%, having recovered from three-week lows. The recovery followed an announcement by Digital Minister Kono Taro in an interview with Bloomberg that the Bank of Japan (BoJ) is expected to raise interest rates again in July to support the yen. Furthermore, the Bank of Japan is anticipated to disclose its strategy for reducing bond purchases this month.

The USD/JPY pair saw a 4% decline from its 38-year high of 161.95 in July. Analysts believe that this decline can be attributed to intervention by Japanese authorities. It is anticipated that traders will remain vigilant with regard to the possibility of further interventions.

The US dollar is receiving support from a slight increase in US Treasury bond yields. However, the potential for dollar gains may be constrained by the release of soft labour market data, which is likely to reinforce market expectations of a September rate cut decision by the Federal Reserve (Fed).

Trade recommendation: We follow the level of 158.00, when fixing above it we take Buy positions, when rebounding we take Sell positions.

On Wednesday, the GBP/USD pair reached new highs, testing chart territory above 1.3000. The prospect of a Federal Reserve (Fed) rate cut in September supported the US dollar and provided a boost to the pound sterling (GBP) in the midweek market session. The recent comments from the Federal Reserve have been perceived as dovish, with market participants interpreting the signals from the Fed officials as an acknowledgement of the progress made on inflation.

The betting markets are fully priced for a quarter-point rate cut when the Federal Open Market Committee (FOMC) meets on 18 September, with rates expected to remain unchanged at the end of the July meeting. The CME's FedWatch tool indicates a 98% probability of a September rate cut, with traders anticipating three rate cuts in 2024, compared to the Fed's more conservative outlook of one or two.

The final UK Consumer Price Index (CPI) inflation data, released early on Wednesday, came in within the expected range, offering little cause for concern among GBP traders. However, a sharper-than-forecast decline in the Producer Price Index (PPI) briefly exerted pressure on the Pound. The latest Producer Price Inflation figures show a decline of 0.3% on a month-on-month basis in June, down from the previous month's revised figure of 0.0%. This is in stark contrast to the forecasted rise to 0.1%.

While there is a growing consensus in the market that a rate cut is likely, comments from key policymakers have painted a less optimistic picture. Both Fed Governor Christopher Waller and Richmond FRB President Thomas Barkin observed that the labour market remains particularly robust despite the easing of inflationary pressures.

The release of UK labour market data on Thursday will provide a clear indication of the direction for the Pound Sterling in the second half of the trading week. The number of benefit claimants is forecast to fall sharply in June, from 50.4k to 23.4k month-on-month. Similarly, the quarterly annualised average earnings excluding bonuses is forecast to fall from 6.0% to 5.7%.

The UK retail sales data for Friday will complete the weekly data set for the United Kingdom. Analysts anticipate a decline in retail spending, with a projected contraction of -0.4% in June, down from a notable 2.9% surge in the previous month.

Trading recommendation: Trading predominantly Buy orders from the current price level.

On Tuesday, the EUR/USD exchange rate fluctuated around the 1.0900 mark as markets grappled with the prospect of a potential rate cut in September. Following the release of US retail sales data for June, the currency pair demonstrated further resilience. The market has fully priced in the start of the Federal Reserve's (Fed) rate cut cycle in September, with up to three quarter-point rate cuts expected over the course of the year. The European Central Bank (ECB) will hold its latest rate meeting on Thursday.

US retail sales in June remained at 0.0%, in line with expectations and down from a revised 0.3% in the previous month. The decline in retail sales has reinforced market expectations for a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting on 18 September. The decline in US retail sales, coupled with the recent cooling of last week's Consumer Price Index (CPI) data, increases the likelihood of a rate cut in September. The CME's FedWatch tool indicates that markets now anticipate a near 100% probability of at least a quarter-point rate cut in September, with the potential for up to three additional cuts through 2024.

It is anticipated that the ECB will maintain the current interest rates on Thursday, as policymakers await further indications of improvement in the data following the initial quarter-point rate cut in June.

Trade recommendation: We follow the level of 1.0900, when fixing above it we take Buy positions, when rebounding we take Sell positions.

The USD/JPY currency pair is trading at a stronger level around 158.30 on Tuesday in the early hours of Asian trading. The increase in the value of the pair is being driven by a moderate rebound in the US dollar (USD). Investors will be monitoring the US retail sales data for June and the speech by Federal Reserve (Fed) Governor Adriana Kugler.

On Monday, Fed Chairman Jerome Powell stated that three measures of US inflation this year "provide some reassurance" that inflation is on track to reach the Fed's target in a sustainable manner. This suggests that a move to lower interest rates may be imminent. Bank of San Francisco President Mary Daly stated that inflation is cooling, reinforcing confidence that it is on track to reach 2% as anticipated. However, Ms. Daly stated that additional information is required to make an informed decision regarding interest rates.

The possibility of a reduction in US borrowing costs is leading to growing speculation that this could have an adverse effect on the US dollar in the near term. CME's FedWatch tool indicates that the market is currently pricing in a 100% probability of a 25-basis-point cut to the Fed funds rate at the Federal Open Market Committee (FOMC) meeting in September.

The potential for currency intervention by the Japanese authorities may provide some support to the Japanese Yen (JPY). On Friday, Japan's Finance Minister Shunichi Suzuki emphasised that rapid currency fluctuations are undesirable. Meanwhile, Japan's Chief Cabinet Secretary Yoshimasa Hayashi stated that he is "ready to take all possible measures in the forex market".

Trade recommendation: Trading predominantly Sell orders from the current price level.

The GBP/USD pair saw some selling activity during the Asian session on Monday, resulting in a three-day winning streak reaching its highest point since July 2023 at 1.3000. Spot prices are currently trading at 1.2965, representing a slight decline of 0.15% on the day. This is occurring against a backdrop of modest US dollar (USD) strength, although any meaningful move to the downside seems unlikely.

The criticism of US presidential candidate Donald Trump on Sunday increased political uncertainty and prompted safe haven flows, allowing the US dollar to recover some of Friday's decline to more than three-month lows. Nonetheless, the expectation that the Federal Reserve will soon commence its rate cut cycle is likely to persist, acting as a headwind for the dollar and providing support for GBP/USD.

CME Group's FedWatch tool indicates that there is a 90%+ probability that the Federal Reserve will cut borrowing costs by 25 basis points in September. Furthermore, market expectations have shifted towards the possibility of another interest rate cut in December, following the release of softer-than-anticipated US consumer inflation data last week. This could dissuade traders from placing new bullish bets on the US dollar.

In contrast, the British Pound (GBP) is benefiting from the diminished likelihood of a Bank of England (BoE) rate cut in August, particularly in light of data released last week indicating that the UK economy expanded at a faster-than-anticipated 0.4% in May. This in turn prompts some caution before confirming that GBP/USD may have formed a short-term top and is positioned for a significant fall.

The market is now awaiting the release of the US manufacturing sector business activity index from Empire State. However, the focus will remain on the speech by Fed Chairman Jerome Powell, which, along with US Treasury bond yields and broader risk sentiment, will have an impact on the USD exchange rate. Nevertheless, the aforementioned fundamental backdrop supports the prospects for some dip-buying in GBP/USD.

Trading recommendation: Trading predominantly Buy orders from the current price level.

The Euro-dollar pair tested a fresh five-week high on Thursday, helped by a broad market sell-off in the US dollar after US consumer price index (CPI) inflation data softened to the slowest rate of price growth since late 2021. Growing market hopes for an acceleration in the pace of rate cuts have kept market sentiment high ahead of Friday's trading session. However, an expected rise in the US wholesale producer price index (PPI) could spoil the bullish mood. European data on Thursday did little to energize Euro traders: the final consumer price index (HICP) in Germany came in at 2.5% y/y, as expected.

US CPI inflation came in below expectations in June. Annualized core CPI inflation fell to 3.0% y/y from the previous reading of 3.3%, beating the forecast of 3.1%. In addition, June CPI inflation fell -0.1% m/m from 0.0% in the previous month and below expectations of 0.1%.

In the week ending July 5, U.S. initial jobless claims fell to 222k from a revised 239k in the previous week and above the forecasted 236k. This decline in jobless claims brought the four-week average down to 233.5k from the previous 238.75k.

With US CPI inflation slowing rapidly, market expectations of a rate hike by the Federal Reserve (Fed) now point to the possibility of three quarter-point rate cuts in 2024. CME's FedWatch tool shows a 95 percent increase in the probability of a rate cut in September.

With the release of US CPI data this week, all that remains is Friday's Producer Price Index (PPI) wholesale inflation, which could disrupt the plans of those hoping for a rate cut. The core PPI for the year ending in June is expected to rise to 2.5% from a previous reading of 2.3% due to businesses facing higher cost pressures than the Fed would like.

Trading recommendation: Trade mainly with buy orders at the price level of 1.0875. Consider sell orders at the price level of 1.0845.

The USD/JPY pair is trading around 161.60, breaking a three-day winning streak in Thursday's early Asian session. Investors will be focused on the Consumer Price Index (CPI) data for June, due for release on Thursday. Federal Reserve (Fed) Governor Rafael Bostic will speak.

Fed Chairman Jerome Powell acknowledged progress on inflation, but Powell said it is not worth lowering the discount rate until there is confidence that inflation will move steadily toward the Fed's 2% target.

Traders expect the U.S. Federal Reserve to keep the benchmark interest rate in the 5.25-5.5% range at its next meeting on July 30-31. The US CPI inflation report will be released on Thursday and further progress on inflation could lead to key changes in the policy statement, paving the way for a rate cut in September.

On the other hand, growing speculation that the Bank of Japan (BoJ) will be forced to raise interest rates at its July meeting is providing some support for the Japanese Yen (JPY). Peter Boockvar, CFO of US-based Bleakley Financial Group, believes that a weaker yen will force the BoJ to "react sooner rather than later".

Trading recommendation: Trade predominantly with Buy orders from the current price level

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The GBP/USD pair has weakened for the second consecutive day, trading around the 1.2780 mark during the Asian session on Wednesday. The decline in the GBP/USD pair can be attributed to the strengthening of the US Dollar (USD), which gained strength after Federal Reserve Chairman Jerome Powell's speech before the US Congress on Tuesday. Powell acknowledged the improvement in inflation data, but reiterated the Fed's cautious stance.

In his speech before the US Congress on Tuesday, Fed Chairman Jerome Powell said that better data would strengthen the Fed's confidence in inflation. Powell also emphasised that a rate cut is not appropriate until the Fed has more confidence that inflation is moving steadily toward 2%. He noted that first-quarter data have not contributed to greater confidence that inflation is on the path needed for the Fed to cut rates.

Traders will be monitoring the second semi-annual speech by Fed Chairman Jerome Powell, as well as speeches by Fed officials Michelle Bowman and Austan Goolsbee on Wednesday. Additionally, the US Consumer Price Index (CPI) data, scheduled for release on Thursday, will be a key focus.

In the UK, Bank of England policymaker Jonathan Haskell has recommended maintaining current interest rates due to persistent price pressures in the labour market. Haskell emphasised: "My preference is to keep rates unchanged until we see more reassurance that underlying inflationary pressures have indeed abated," Reuters reports.

The Pound Sterling (GBP) is showing subdued movement against major currencies as attention shifts to upcoming economic data. In particular, investors are awaiting the release of the UK's monthly Gross Domestic Product (GDP) data and May factory data, which will be released on Thursday.

Trading recommendation: We follow the level of 1.2800, on the rebound we take Buy positions. If we consolidate below, we take Sell positions.

The Dollar-Euro pair continues its winning streak for the sixth day, trading near 1.0830 during Tuesday's Asian session. The Euro continues to rise as investors digest the initial shock of the French election results. An unexpected left-wing alliance pulled ahead, preventing Marine Le Pen's far-right party from dominating the leadership race after a significant defeat in the previous European Parliament elections.

OCBC FX analysts Francis Cheung and Christopher Wong noted that the euro started the week with a slight decline after the unexpected results of the second round of elections. They noted, "The leftist-dominated government was the least expected and raised concerns over potential increases in government spending, which could put further strain on public finances."

The EUR/USD pair is strengthening amid a weaker US Dollar (USD) due to weak US jobs data, leading traders to speculate that the Federal Reserve (Fed) may cut interest rates in September. CME's FedWatch tool shows that betting markets estimate the probability of a rate cut in September at 76.2%, up from 65.5% a week earlier.

On Tuesday, Fed Chairman Jerome Powell may deliver his "Semiannual Monetary Policy Report" to the U.S. Congress. Powell may provide a broad overview of the economy and monetary policy, and his prepared remarks will be released before his speech on Capitol Hill.


Trading recommendation: Trade predominantly with Buy orders from the current price level.

EUR/USD is trading near 1.0830 on Monday in the early hours of Asian trading. Political uncertainty in France after the second round of voting in the parliamentary elections on Sunday is putting pressure on the euro (EUR). Later on Monday, the Eurozone Sentix investor confidence index for July will be released.

According to the Economist, exit polls showed that the left-wing New Popular Front (FNP), led by Jean-Luc Mélenchon, looks set to win the most seats in the second round of France's parliamentary election on Sunday. The FNP has secured at least 174 seats.

However, that is still not enough to win the 289 seats needed to control the lower house of parliament. Meanwhile, President Emmanuel Macron's centrist Ensemble alliance won 146 seats and Le Pen's party was pushed into third place with about 142 seats. The common currency attracted some sellers after opinion polls showed the latest round of French parliamentary elections would leave parliament in limbo. 

On the other side, rising odds of the U.S. Federal Reserve (Fed) following a slow uptick in U.S. jobs data could lead to a weaker dollar and limit the pair's decline. Data released by the US Bureau of Labor Statistics (BLS) showed that US Non-Farm Payrolls (NFP) rose by 206K in June, following May's 218K increase (revised from 272K). This figure was higher than the forecast of 190,000.

In addition, the unemployment rate rose to 4.1% in June from 4% in May. Average hourly earnings fell to 3.9% y/y in June from the previous reading of 4.1%, matching market expectations. On Wednesday, traders will focus on US Consumer Price Index (CPI) inflation, which is expected to decline to 3.1% y/y in June from 3.3% in May.

Trading recommendation: Trade mainly with buy orders at the price level of 1.0850. We consider sell orders at the price level of 1.0785.

The rise in USD/JPY raises expectations of currency intervention by the Japanese authorities. "Currently, USD/JPY will be guided by UST yields and the US dollar. For USD/JPY to reverse downward, it will require the US Dollar to turn around/Fed Fed to cut rates or the BoJ to signal an intention to normalize urgently (rate hike or increased pace of balance sheet reduction). None of the above seems likely to happen," according to OCBC strategists Francis Cheung and Christopher Wong.

Following the June 11-12 Federal Open Market Committee (FOMC) meeting, Federal Reserve (Fed) officials emphasized that the approach depends on data and refrained from cutting interest rates until further observations. Some Fed officials were unsure whether they needed to cut interest rates, while several policymakers said they would need to raise rates again if inflation rebounds.

However, the dollar's gains may be limited as recent US PCE inflation data and a weaker-than-expected services PMI have fueled expectations of a Fed interest rate cut this year. Later in the day, traders will focus on the US employment data for June. The US NFP is projected to show an increase of 190K jobs in June, while the unemployment rate is expected to remain unchanged at 4%. Finally, average hourly earnings will fall to 3.9% y/y in June from 4.1% in May.

Trading recommendation: Trade mainly with buy orders at the price level of 160.85. Consider sell orders at the price level of 160.10.

The pound/dollar exchange rate continued its short-term recovery on Wednesday, with a general softening of US economic data in the mid-week market session providing support. The upcoming UK election on Thursday will attract a great deal of attention from traders, while US markets will be focused on the anticipation of a day off on Thursday.

The US employment change from ADP fell to 150k in June, down from the previous month's 157k and below the projected increase to 160k. A closer examination of the ADP report revealed that many of the jobs that had already been lost were concentrated in the low-paying leisure and hospitality sectors.

The number of individuals filing initial jobless claims in the United States for the week ending 28 June increased to 238,000 from 233,000 the previous week, exceeding the projected figure of 235,000. The four-week average of initial jobless claims also rose to 238,500 from 236,250.

The US ISM Services Purchasing Managers' Index (PMI) declined sharply in June, reaching its lowest level since June 2020. The services PMI fell from the previous month to 53.8, exceeding forecasts for a decline to 52.5.

On Thursday, US markets will be closed due to US Independence Day celebrations, while parliamentary elections will begin in the UK. The Labour Party in the UK is expected to secure a majority in government, marking the end of the Conservatives' 14-year rule. According to the latest mega poll released on Wednesday, Labour is expected to be well ahead of the Conservatives, with Keir Starmer, the Labour Party's candidate, expected to replace Rishi Sunak, the current Conservative Prime Minister. A poll conducted by YouGov indicates that Labour is projected to win 431 seats, while the Tories are expected to win just 102 seats.

The Euro-dollar pair spent Tuesday in fluctuations, looping just below 1.0750 as the pair struggles to find momentum. Key US employment data is released on Friday, while EU economic data remains patchy during the second half of the trading week.

Core HCOB Harmonized Index of Consumer Prices (HICP) inflation came in at 2.9% m/m in June, holding steady with the previous reading and defying the forecast for a decline to 2.8%. Overall, HICP inflation fell to 2.5% y/y as forecast, down from the previous reading of 2.6%, but European inflation remains well above the European Central Bank's (ECB) target range of 2%.

The EU Composite PMI for June is expected to remain at 50.8 and the annualized European Producer Price Index for May is expected to improve, albeit marginally, to -4.1% y/y from the previous reading of -5.7%.

The US ADP employment change for June is expected to rise slightly to 160k from the previous value of 152k. Meanwhile, the ISM Services PMI is expected to decline further to 52.5 m/m from the previous value of 53.8.

On Monday, EURUSD hit a new high since mid-June above 1.0770 before being forced back down due to a reversal in investor sentiment in the broad market. The bullish momentum was interrupted after US business activity data showed warning signs of a deepening economic slowdown. Throughout the week, investors will be anxiously awaiting key economic indicators on both sides of the Atlantic, culminating in fresh US Non-Farm Payrolls (NFP) data scheduled for Friday.

German consumer price index (CPI) data on Monday generally failed to meet expectations, with the annualized German CPI in June falling to 2.2% from the previous reading of 2.4% and retreating from the forecast of 2.3%. Data from the US on Monday also fell short of expectations: the ISM manufacturing Purchasing Managers' Index (PMI) declined to 48.5 in June from 48.7 and fell short of the forecasted increase to 49.1. The ISM Manufacturing Goods and Services Price Index also declined sharply in June, falling to 5..1 from the previous reading of 57.0, further exceeding the forecasted decline to 55.9.

U.S. markets were suddenly rattled by renewed concerns about the upcoming presidential election in November. Recent public debates have left many questions about who will be the clear frontrunner, and on Monday the U.S. Supreme Court ruled that courts have limited ability to bring criminal charges against sitting presidents.

On Tuesday, markets will be hit with a fresh batch of key European data as well as a number of speeches from European Central Bank (ECB) executives, including another speech from ECB President Christine Lagarde. The pan-European Harmonized Index of Consumer Prices (HICP) is expected to fall slightly, with EU core HICP inflation falling to 2.8% y/y from a previous reading of 2.9%. Producer Price Index (PPI) inflation data in Europe is due out on Wednesday, followed by EU retail sales data early Friday.

In the US, investors will await Federal Reserve Chairman Jerome Powell's speech on Tuesday, followed by ADP employment change data on Wednesday and the latest US Non-Farm Payrolls (NFP) and Average Hourly Earnings for June on Friday.

Trading recommendation: Trade mainly with buy orders at the price level of 1.0760. We consider sell orders at the price level of 1.0695.