Markets Look To US Data For Next Direction

This week attention will turn to US data following the strong showing of both the Dollar and US markets over the previous weeks.

The week kicks off with Core Retails Sales figures which could set the early tone for markets. Further hints could be provided for the timing and extend of cuts in QE from these figures. Furthermore, CPI figures and Bernanke’s testimony later in the week will fuel speculation of any likely next move.

Across the pond the beleaguered pound will remain under scrutiny. Year on Year CPI figures on Tuesday  and both Claimant count change data and the MPC meeting minutes on Wednesday are likely to ensure a continued rough ride for Cable.

The German ZEW Economic sentiment report due on Tuesday which could prove a good indication of how the Euro Zone’s largest member is continuing to hold up.

Of note elsewhere is Canadian Interest rate decision midweek with Core CPI figures due at the end of the week.

Gold could prove a good market to watch with pressure likely to be back on the metal following its recent recovery from the lows set at the end of June. A continued recovery on equity markets are likely to see further selling pressure on the metal.

Key News This Week

Market data for week 15th July

In Focus

USDJPY Outlook 15-07-13

The rise from 93.78 could see falls back to at least 97.65 or 96.70 (61.8% and 50% respectively) in the coming sessions.

This would play into the theory that the USD could see a temporary sell off from recent gains over the upcoming trading sessions this week.

Currency Majors

EUR/USD – Although the pair closed about 1.30 last week, signs point to this current rally stalling soon. The 1.32 level has resisted price gains well recently. this level is likely to prove a good place to position short for a resumption of falls.
USD/JPY – See Above
USD/CHF –  The current break above 0.9595 looks like a low could be in place on the pair. Look for a confirmation to go long above 0.9625 for further gains over the coming sessions.
GBP/USD –  Having bounced from 1.48124 the pair has managed to close back above the psychological 1.50 level. Stand aside and use this level to re-enter short.

Major Indices

DOW – The market has moved up again closer to the previous highs. 17000 remains a key resistance level, which if broken, will accelerated near term gains. Expect this level to be tested this week.
NASDAQ – Strong gains last week with the Index extending higher to close above 3600. however such gains make the market look a little ‘extended’. Expect a pullback as traders consolidate over coming session with strong support at the 3500 level.
FTSE – Despite strong gains last week the UK Index is somewhat off of it’s recent highs. This perhaps offers the greatest opportunity.6000 has proven to be strong support and as such closing back above 6500 signals the potential for further gains.

Commodities

Oil – Oils move above $100 looks to be consolidating, with the longer term technical picture indicating the potential for further gains. 108-108.50 has served as strong an area of previously strong support/resistance, so we’d look for a move away from this range before having a strong conviction on direction.
Gold – Gold’s moves look broadly corrective. A break above the 1320 level is needed to confirm that the recent weakness has ended. Price moves towards this level could therefore provide an opportunity to position for falls again.

Stocks

Major stocks announcements this week come in the form of technology bell weathers, Google and Microsoft. Google will be updating on Q2 trading figures while Microsoft Q2.

Else where pay attention to eBay, Bank of America, Coca Cola, Yahoo and Intel Corp, all of who will be reporting Q2 figures. Across the pond Vodafone are also due to release a trading statement to the markets.