The US dollar index is testing new lows and is trading near 99.00. The pressure on the dollar continues to be exerted by the US inflation data, which showed a more serious than expected slowdown. Let’s recall that the consumer price index fell from 4% to 3% over the last 12 months, and the core index fell from 5.3% to 4.8%. This statistics confirmed investor expectations that the Fed is likely to complete its tightening cycle by the end of this year. Against this backdrop, US treasury yields slipped to the local lows, putting additional pressure on the dollar. Given the above, we recommend holding short positions on the dollar.
SELL STOP 99.50/TP 99.00/SL 99.70
AUD/USD
The AUD/USD pair is trading near 0.6900. In the absence of significant economic releases, the movement of the Australian dollar is driven by external factors. It is worth noting the statement by the management of two leading Australian lenders, National Australia Bank (NAB) and ANZ Group, according to which the number of customers who have not repaid mortgage loans is still below pre-pandemic levels. This is a sign that massive household financial problems caused by the Reserve Bank of Australia (RBA) interest rate hike may not happen. Against this backdrop, market participants assume that the regulator may raise the rate again in order to control inflation, which will allow the AUD/USD pair to reach the 0.70 mark.
BUY STOP 0.6890/TP 0.6950/SL 0.6870
BRENT
Brent crude is trading above $80 per barrel. Two main factors are driving the prices up: new output cuts by Saudi Arabia and Russia, as well as expectations of the completion of the current tightening cycle in the United States. Let’s recall that earlier the authorities of Saudi Arabia announced the extension of its voluntary oil output cut of 1 million barrels per day into the end of August, and Russian representatives announced a decrease in production by 500 thousand barrels per day over the same period. Meanwhile, a significant slowdown in inflation in the United States may cause the Fed to abandon further rate hikes in the second half of this year, which will create conditions for higher oil demand.
BUY STOP 81.50/TP 83.50/SL 80.90