CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Two trades to watch: EUR/USD, Barclays

Article By: ,  Senior Market Analyst

EUR/USD rises post-Fed, with German inflation, US GDP in focus 

EUR/USD rose 0.9% in the previous session and is extending the move higher today. 

 

The USD is trading under pressure following the Fed monetary policy announcement. The Fed, as expected, hiked rates by 75 basis points.  

 

However, Fed Chair Jerome Powell said there were signs of weakness in the economy, particularly surrounding spending and production. While he didn’t rule out a further 75 bps point hike, he did say that the Fed would no longer be providing forward guidance. 

 

The market has interpreted the meeting as dovish, pulling the USD lower. Fed Powell said that the US was not in a recession yet. With this in mind, attention will be on US GDP data which is expected to show a rebound to growth of 0.4% after contracting -1.6% in Q1. 

 

In Europe, all eyes will be on German inflation data, which is expected to slip to 8.1% YoY in July, down from 8.2% in June, marking the third straight month of falling inflation. 

 

Where next for EUR/USD? 

 After rebounding from the 2022 low of 0.9952 EUR/USD has so far struggled to move meaningfully above the 20 sma. Today the price is rising above the 20 sma, which, combined with the bullish MACD, keeps buyers hopeful of further upside. 

 

Resistance can be seen at 1.0280, last week’s high, with a breakthrough here opening the door to 1.0340, the May low. 

 

Failure to hold over the 20 sma could see the pair drop to 1.01, the weekly low. A break below here opens the door to 1.00 and 0.9952, the 2022 low. 

  

Barclays falls after H1 profits fall 

Barclays is falling after disappointing profits for the first six months of the year. The British bank reported a huge £1.9 billion hit for a conduct charge relating to the cost of having to buy back billions of dollars worth of securities, which it sold in error. 

 

Profits before tax came in at £3.7 billion pounds, down from £4.9 billion in the same period the year before. This was also short of the 33.9 billion forecasts. 

 

Despite the huge hit, the bank confirmed a 2.5p per share dividend and a £500 million share buyback programme, although this isn’t helping to stem the losses. 

 

Elsewhere Barclays reported a strong performance in its investment banking business, with revenue from the trading division up 48%. Like its peer Goldman Sachs, Barclays is renowned for the quality of its trades, and today’s results highlight that. The Fixed income, FX, and commodities trading business reported a 51% jump in revenue. 

 

Meanwhile, advisory fee income fell 31% as deal-making dried up amid uncertainty caused by the war in Ukraine. 

 

Where next for Barclay’s share price? 

After running into resistance at 162p the share price fell below the 50 sma and the falling trendline, which combined with te bearish crossover forming on the MACD suggests that more losses could be on the cards. 

 

Sellers will need to break below the 20 sma at 153p to open the door to 145p the July low, with a break below here creating a lower low and brings 139p the 2022 low into target. 

 

Should the 20 sma hold, buyers will look to rise above the 50 sma at 158p and 163p the July high. A rise above here brings the 173p May high into target. 

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024