Daily Forex Analysis - 14th July 2021

USD Overview (14 July 2021)

Yesterday, USD strengthened against all major currencies.

The CPI m/m data released yesterday indicated the largest monthly rise in inflation in June since June 2008. The main drivers behind the strong rise in inflation are used cars and trucks prices and gasoline prices.

- CPI m/m (Actual: 0.9%, Forecast: 0.5%, Previous: 0.6%)

- Core CPI m/m (Actual: 0.9%, Forecast: 0.4%, Previous: 0.7%)

Federal Reserve Chairman Jerome Powell will be testifying tomorrow at 0000 (GMT+8). During this time, volatility in USD is expected.

NZD/USD Outlook (14 July 2021)

Overall, NZD/USD is ranging across. Recently, NZD/USD weakened into the support zone of 0.69500 after the release of the strong U.S. CPI inflation data.

The Reserve Bank of New Zealand (RBNZ) will be announcing their monetary policy decision later at 1000 (GMT+8). It is expected that the central bank will be holding interest rate unchanged at 0.25%. Nonetheless, pay attention to any mentioning of quantitative easing (QE) tapering by the RBNZ in the rate statement. Also pay attention to the central banks view on progress of economic recovery in New Zealand as it will have an impact on the tapering of QE.

Currently, NZD/USD is testing the support zone of 0.69500 and the next resistance zone is at 0.71000.

If the RBNZ delivers a hawkish tone, specifically on the possibility of QE tapering, look for short-term buying opportunities of NZD/USD after it bounces off the support zone of 0.69500.

AUD/USD Outlook (14 July 2021)

Overall, AUD/USD is trending downwards. Recently, AUD/USD bounced off the resistance zone of 0.75000 after the release of the strong U.S. CPI inflation data.

The Australian NAB Business Confidence data (Actual: 11, Forecast: NA, Previous: 20) released yesterday indicated a decline in business confidence from the surveyed businesses as the survey was conducted during the period whereby there was a rise in COVID cases in New South Wales and also during lockdowns in parts of Australia.

The Australian employment data will be released tomorrow at 0930 (GMT+8).

- Employment Change (Forecast: 19.7K, Previous: 115.2K)

- Unemployment Rate (Forecast: 5.1%, Previous: 5.1%)

AUD/USDs next support zone is at 0.73300 and the next resistance zone is at 0.75000.

Look for short-term selling opportunities of AUD/USD.

USD/JPY Outlook (14 July 2021)

Overall, USD/JPY is ranging across. Recently, USD/JPY strengthened after the release of the strong U.S. CPI inflation data.

Currently, USD/JPY is moving towards the resistance zone of 110.800 and the next support zone is at 108.500.

Look for short-term buying opportunities of USD/JPY if it breaks the resistance zone of 110.800.

EUR/USD Outlook (14 July 2021)

Overall, EUR/USD is trending downwards. Recently, EUR/USD broke the support zone of 1.18200 after the release of the strong U.S. CPI inflation data.

French banks will be closed today in observance of National Day. Expect slightly lower than usual trading volatility and volume during the European market hours.

EUR/USDs next support zone is at 1.16300 and the next resistance zone is at 1.18200.

Look for short-term selling opportunities of EUR/USD.

GBP/USD Outlook (14 July 2021)

Overall, GBP/USD is ranging across. Recently, GBP/USD trended into the support zone of 1.38000 after the release of the strong U.S. CPI inflation data.

The UK CPI y/y data will be released later at 1400 (GMT+8).

- CPI y/y (Forecast: 2.2%, Previous: 2.1%)

- Core CPI y/y (Forecast: 2.0%, Previous: 2.0%)

Bank of England committee member Ramsden will be speaking tomorrow at 0100 (GMT+8). During this time, there may be volatility in GBP.

Currently, GBP/USD is testing the support zone of 1.38000 and the next resistance zone is at 1.40000.

Look for short-term selling opportunities of GBP/USD if it breaks the support zone of 1.38000.

USD/CAD Outlook (14 July 2021)

Overall, USD/CAD is trending upwards. Recently, USD/CAD rejected the support zone of 1.24800 after the release of the strong U.S. CPI inflation data.

The Bank of Canada (BoC) will be announcing their monetary policy decision later at 2200 (GMT+8). It is expected that the central bank will be holding interest rate unchanged at 0.25%. With the recent improvement in business activities, strong jobs report, rising vaccination rates and the easing of COVID restrictions, it is likely that the BoC will be tapering its quantitative easing for the second time.

USD/CADs next support zone is at 1.24800 and the next resistance zone is at 1.26100.

If the BoC carries out QE tapering, look for short-term selling opportunities of USD/CAD if it breaks the support zone of 1.24800.

GBP/JPY Outlook (14 July 2021)

Overall, GBP/JPY is ranging across.

The UK CPI y/y data will be released later at 1400 (GMT+8).

- CPI y/y (Forecast: 2.2%, Previous: 2.1%)

- Core CPI y/y (Forecast: 2.0%, Previous: 2.0%)

Bank of England committee member Ramsden will be speaking tomorrow at 0100 (GMT+8). During this time, there may be volatility in GBP.

GBP/JPYs next support zone is at 151.000 and the next resistance zone is at 153.800.

Look for short-term buying opportunities of GBP/JPY.

EUR/JPY Outlook (14 July 2021)

Overall, EUR/JPY is ranging across. Recently, EUR/JPY bounced down from the key level of 131.

French banks will be closed today in observance of National Day. Expect slightly lower than usual trading volatility and volume during the European market hours.

Currently, EUR/JPY is moving towards the support zone of 130.000 and the next resistance zone is at 132.000.

Look for short-term buying opportunities of EUR/JPY if it bounces off the support zone of 130.000.