The European currency is holding near 1.09. Investors ponder the recent comments from European Central Bank (ECB) Chief Economist Philip Lane, who warned markets against pricing in interest rate cuts within the next two years. He also noted that the regulator will make serious progress in slowing down the growth rate of consumer inflation this year, but the figure will not reach the target level of 2.0% for a long time.
Market participants await data on inflation in the Eurozone, which will be released tomorrow. According to forecasts, core inflation rose from 5.3% to 5.5% last month. If expectations are confirmed, the European currency will target 1.10 again.
BUY STOP 1.0920/TP 1.1000/SL 1.0900
GBP/USD
The GBP/USD pair is trading near 1.2620. In the absence of significant economic releases, the movement of the pound is driven by external factors. At the beginning of the week, the heads of the largest British retail chains responded to the claims of representatives of Parliament, saying that they are not making a profit against the backdrop of a crisis in the cost of living in the country and are not passing on price increases to buyers, but are only trying to remain competitive and not lose customers. Let’s recap here that questions to the management of UK supermarkets arose because core inflation and price inflation for essential goods in the country are extremely slow to decline. Market participants expect additional actions from the regulator to tighten policy, which may provide additional support to the pound.
BUY STOP 1.2650/TP 1.2750/SL 1.2620
BRENT
Brent oil continues to consolidate near $74. Prices may be supported by data on oil reserves in the US. According to the latest report from the Energy Information Administration, US oil inventories fell by 9 million barrels last week, indicating strong demand in the domestic market. In addition, the decision of Saudi Arabia to further reduce oil production by 1 million barrels will come into force on July 1. It is expected that against this backdrop, the world oil market will quickly find itself in a state of deficit. Given the above, we recommend holding long positions on oil.
BUY STOP 74.30/TP 76.30/SL 73.70