A Hawkish Powell, Surprising UK Inflation, and Bearish Indices: Today's Market Overview
22 June 2023
Today's trading landscape is notably active, coming on the heels of a busy Wednesday. UK inflation data came in higher than anticipated yesterday, maintaining at 8.7% when a drop to 8.4% was expected. The British Pound, however, ended the day as one of the market's weakest currencies, defying typical forex dynamics.
Jerome Powell's hawkish testimony, affirming the Fed's ability to hike rates, seemingly had minimal direct impact on the dollar but led to significant bearish correction in indices. We're witnessing the 5th consecutive bearish day for indices like the S&P 500 and Dow Jones, and the situation appears even grimmer in Europe, with sharp drops in DAX and French CAC.
Meanwhile, the EURUSD has hit new monthly highs, underlining its strength amongst other currencies. This is further corroborated by EURGBP, which has risen above the key 0.857 resistance level, indicating a buy signal.
In commodities, we're witnessing significant corrections: Silver is at its lowest since March 22nd, while Brent Oil is making an intriguing move within the rectangle pattern, approaching the critical 77.6 resistance level. A breach of this level could mean a long-term buy signal.
Today's key events include an expected interest rate hike in Switzerland from 1.5% to 1.75%, and a similar move anticipated in the UK from 4.5% to 4.75%. Jerome Powell will conclude the day with another speech. All in all, it looks set to be a captivating second half of the week.