Trading insights: Inflation is down…but

The above chart illustrates the bearish “technical” theme hanging over the S&P 500 index, driving prices fallen below the 50 day moving average.

Market Talk

Start looking ahead, plan your trades, the US Fed is not out of the woods, and neither is the ECB

Attention! Traders and investors, it's high time to look ahead at upcoming events that can make or break your trading plan:

• September 1st - US nonfarm payrolls
• September 13th - US inflation
• September 14th - ECB interest rate decision
• September 20th - US FOMC interest rate decision

Professional traders are always looking for the next catalyst, risk drivers and emerging trends.

Think about this:

The US Fed may not be done with rate hikes, despite that inflation is down to 3.2% the US consumer remains robust, just look at the US housing market:

• despite higher interest rates, new home starts for July were stronger than expected, 1.452 million new homes started during July

What about the US labor market?

• Unemployment at 3.6% (let’s call it maximum employment), the Fed can tick that box as mission 1 of 2 missions completely successfully

And inflation? 3.2% - current US inflation is above the Feds 2% target, yeah getting the inflation rate below the 2% target looks a bit like mission impossible, at least from the current point of view.

Bottom line: The Fed could hold off any hike in September, BUT if inflation accelerates then rate hikes for November and December can not be ruled out.

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Today’s economic calendar

UK Retail Sales weaker than consensus - year-on-year retail sales down -3.2%

• GBP lower across the board; GBPJPY down -0.59%; EURGBP +0.24%

Source: TradingView / J. Knobel August 18 2023 5:44 AM UTC

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Trading prospective:

GBP/USD - restart of the downtrend?

Technical commentary: GBP/USD

Despite the recent 3 day gains, the outlook for the GBPUSD appears to be bearish. Current price 1.2717 is below its 50 day moving average, the recent 3 days of gains could be a short term correction from the multi-week downside move (see chart), downside prospects for a move towards the 1.2620s can not be ruled out in the very short term (1-13 days), while upside risk seen near the 1.2825 area (see chart).

Do you have an opinion on where financial markets are heading? Express your opinion and trade with CFDs.