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Fed Minutes Reveal a Divided Committee

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  • Yesterday the latest FOMC meeting showed that policy makers were split on the outlook for inflation, how it might affect future interest rates and how they should start normalising the bank’s enormous balance sheet.
  • EUR/USD has continued to trade between the support of 1.1300 (S1) and the resistance of 1.1380 (R1). We believe the near term outlook remains positive and that the latest slide 1.1450 (R2) is a corrective phase.
  • The focus for USD traders changes to the forthcoming US data, the US employment report tomorrow and the CPI data due out next week. A solid job report and a strong rebound in the core inflation rate would be needed to bring forth market expectations for the next rate hike.

WTI tumbles as Russia opposes deeper output cuts; OPEC exports rose in June

  • WTI tumbled yesterday following Russia’s opposition for deeper production cuts. WTI fell below the support (now turned resistance) of 46.50 (R1) to hit the support at 44.65 (S2).
  • We believe yesterday’s tumble changes the short term outlook to flat for the time being which turns investors’ attention to the Energy Information Administration (EIA) report later today.

As for today’s events:

  • During the European morning, the only release that may attract attention is the minutes from the ECB June policy meeting.
  • In the US, focus shifts to the ADP employment report for June.
  • The ISM non-manufacturing PMI for June is due to be released. Expectations are for the index to slide.
  • 3 speakers on the agenda: ECB Executive Board member Peter Praet, San Francisco Fed President John Williams, and Fed Board Governor Jerome Powell.

EUR/USD

eurusd chart

  • Support: 1.1300 (S1), 1.1220 (S2), 1.1170 (S3)
  • Resistance: 1.1380 (R1), 1.1450 (R2), 1.1500 (R3)

WTI

WTI Chart

  • Support: 45.35 (S1), 44.65 (S2), 43.70 (S3)
  • Resistance: 46.50 (R1), 47.50 (R2), 48.50 (R3)

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