This week, global markets are poised for significant movements as a series of crucial economic events unfold that could influence investment strategies. Market participants will be closely monitoring key metrics including inflation data, trade balances, and central bank decisions from major economies. These data points offer a detailed view of the current economic landscape and shape expectations for future monetary policies.
On Wednesday, July 17, attention will turn to the UK's CPI (YoY) for June, which is a critical gauge for inflation and future Bank of England policy. The Eurozone will also release its CPI (YoY) for June, providing insight into regional inflation pressures and potential ECB policy adjustments. Additionally, the US Crude Oil Inventories report will be released, offering insights into oil supply levels that can impact oil prices and related currencies.
Thursday, July 18 will be a pivotal day with the ECB's Interest Rate Decision and Deposit Facility Rate announcement. These decisions are crucial for understanding the future path of monetary policy in the Eurozone. Following the announcements, the ECB Press Conference will provide further insights into the central bank's economic outlook and policy direction. In the US, Initial Jobless Claims and the Philadelphia Fed Manufacturing Index will be key releases, providing updates on labor market conditions and regional manufacturing activity.
On Friday, July 19, the focus will shift to the UK's Retail Sales (MoM) for June, an important indicator of consumer behavior and potential implications for future Bank of England policies. In Canada, Employment Change and Unemployment Rate data for June will offer a snapshot of labor market conditions. Additionally, the FOMC Member's Speech and the US Baker Hughes Oil Rig Count will be monitored for insights into future monetary policy and oil market trends.
DXY
Daily chart:
In the daily analysis of DXY, the decline below the daily fractal support at 104.80 brings the index closer to the monthly fractal support positioned at 103.99. This move opens the possibility for the formation of patterns below this fractal support zone. Notably, the 127% Fibonacci extension projected at 103.32, just below the fractal, could support the formation of an ABCD pattern. Additionally, there is the potential for a move towards the March lows and fractal support established at 102.35, which could contribute to the formation of a bullish alt-bat pattern at 101.83. Traders should monitor these levels for potential bullish reversal setups and assess the strength of the support zones.