Will Storage Surpluses and LNG Keep Bears in Control?
Ample storage continues to weigh on bulls, with the latest EIA data showing U.S. inventories up 6.2% above the five-year average, despite being down 5.8% year-over-year.
The latest injection of +55 Bcf surpassed consensus, reinforcing the market’s view that supply is not a constraint.
Eli Rubin at EBW Analytics noted that the combination of “lofty storage surpluses and weak Henry Hub spot realizations” may keep bears in charge, especially given uneven LNG flows, which fell 2.5% week-over-week to 15 Bcf/day on Tuesday.
Lower-48 dry gas production remains robust at 104.8 Bcf/day, up 3.9% year-over-year, while demand fell 6.8% to 77.9 Bcf/day, underscoring the imbalance pressing prices lower.
How Are Weather and Wind Generation Influencing Demand?
NatGasWeather highlighted strong heat for July 7-13, with highs in the mid-80s to 90s across much of the U.S., including 100s in the West and Plains, supporting high near-term demand.
However, forecasts have cooled for the central U.S. for July 13-17 and for the East July 18-22, pressuring futures lower on expectations of reduced power burn for air conditioning.
GBP/USD fluctuates at around 1.3600 in the European session on Wednesday.
Technical sellers could remain interested once 1.3600 is confirmed as resistance.
An improving risk mood could help the pair limit its losses.
GBP/USD recovered after setting a two-week low and closed virtually unchanged on Tuesday. The pair moves up and down in a narrow band at around 1.3600 midweek, while the technical picture doesn’t offer any signs of a steady recovery.
British Pound PRICE This week
The table below shows the percentage change of British Pound (GBP) against listed major currencies this week. British Pound was the weakest against the US Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.68%
0.51%
1.76%
0.68%
0.50%
1.13%
0.35%
EUR
-0.68%
-0.16%
0.84%
-0.02%
-0.12%
0.43%
-0.35%
GBP
-0.51%
0.16%
0.96%
0.16%
0.04%
0.60%
-0.31%
JPY
-1.76%
-0.84%
-0.96%
-0.83%
-1.02%
-0.40%
-1.32%
CAD
-0.68%
0.02%
-0.16%
0.83%
-0.16%
0.45%
-0.49%
AUD
-0.50%
0.12%
-0.04%
1.02%
0.16%
0.66%
-0.35%
NZD
-1.13%
-0.43%
-0.60%
0.40%
-0.45%
-0.66%
-0.90%
CHF
-0.35%
0.35%
0.31%
1.32%
0.49%
0.35%
0.90%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
The uncertainty surrounding the United States’ trade relations and their potential impact on growth and inflation outlook causes markets to cling to a cautious stance. In turn, the US Dollar (USD) finds demand as a safe-haven and stays resilient against its rivals.
US President Donald Trump said late Tuesday that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon. Meanwhile, US Commerce Secretary Howard Lutnick said that another 15 to 20 tariff letters are expected to be announced in the next two days.
In the second half of the day, the Federal Reserve will release the minutes of the June policy meeting. Following the upbeat June employment data from the US, the probability of the Fed cutting the policy rate by 25 basis points in July dropped to nearly 5% from about 25%, as per CME FedWatch Tool. Hence, the publication is unlikely to alter market expectations in a significant way.
Investors will continue to pay close attention to the risk perception. After trading flat earlier in the session, US stock index futures turned positive on the day. A bullish opening in Wall Street could hurt the USD and open the door for a rebound in the near term.
GBP/USD Technical Analysis
The 100-period Simple Moving Average (SMA) on the 4-hour chart aligns as a pivot level at 1.3600. In case GBP/USD confirms that level as resistance, 1.3570 (200-period SMA) could be seen as the next support level before 1.3540 (lower limit of the ascending channel, Fibonacci 38.2% retracement of the latest uptrend) and 1.3500 (static level, round level).
On the upside, 1.3630 (Fibonacci 23.6% retracement) could be seen as the first resistance level ahead of 1.3660 (50-period SMA) and 1.3700 (mid-point of the ascending channel).
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data.
Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates.
When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money.
When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP.
A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
The EURJPY pair began this morning with new positivity by surpassing the resistance of the bullish channel’s resistance at 171.70 level, recording some extra gains by holding near 172.25.
Note that stochastic stability within the overbought level might decelerate the chances of forming a strong bullish rally, but its repeated stability above 171.10 that attempts to form an extra support might assist to motivate the continuation of the positivity, to expect reaching to 172.85 followed by 161.8%Fibonacci extended level at 173.40
The expected trading range for today is between 171.50 and 171.85
The USD/JPY forecast indicates brief relief for the yen after a steep decline.
The yen has weakened significantly following Trump’s announcement of a 25% tariff on Japanese goods.
Market participants are awaiting the release of the FOMC meeting minutes.
The USD/JPY forecast indicates brief relief for the yen after a steep decline due to tariff concerns. However, the outlook for Japan’s economy has darkened following Trump’s threat of a 25% reciprocal tariff.
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The yen has weakened significantly this week following Trump’s announcement of a 25% tariff on Japanese goods, effective from August. The move came after trade talks between the US and Japan failed. Market participants are concerned that this could be the start of a trade war between the two partners. Such an outcome would hurt both economies and weaken their currencies.
However, at the moment, the dollar is rallying at the prospect of higher import costs. These might translate to higher inflation, forcing the Fed to keep interest rates high.
Furthermore, Trump has threatened a 50% tariff on copper imports that would again ignite tensions with many countries. In the short term, tariffs might be bullish for the dollar. However, in the long run, they might dim the outlook for the US economy and hurt its currency.
Elsewhere, market participants are awaiting the release of the FOMC meeting minutes. The report might contain clues about future policy moves. However, with tariff uncertainty, the outlook might become less clear.
USD/JPY key events today
USD/JPY technical forecast: Rally pauses for breath at the 147.01 level
USD/JPY 4-hour chart
On the technical side, the USD/JPY price has finally paused its steep rally near the 147.01 key level. However, the bullish bias remains strong, with the price well above the 30-SMA and the RSI near the overbought region.
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After such a strong move, bulls have paused for a breath at this level. Therefore, the price might consolidate as the SMA catches up. At the same time, it might pull back to retest the SMA as support. The bullish bias will remain as long as it stays above the SMA.
After a pause, bulls might regain momentum to break past the 147.01 level for a new high. Such a move would allow USD/JPY to retest the 148.02 key resistance. A break above would solidify the bullish bias.
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Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.
Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.
The expected trading range for today is between $5.4500 and $5.9800
EUR/USD trades near 1.1700 in the European session on Wednesday.
The technical outlook points to a bearish tilt in the short term.
The Federal Reserve will publish the minutes of the June policy meeting.
EUR/USD struggles to hold its ground early Wednesday and trades in negative territory at around 1.1700 after posting small gains on Tuesday. The near-term technical outlook highlights a lack of buyer interest.
Euro PRICE This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.
USD
EUR
GBP
JPY
CAD
AUD
NZD
CHF
USD
0.55%
0.38%
1.75%
0.64%
0.42%
1.00%
0.35%
EUR
-0.55%
-0.15%
0.95%
0.07%
-0.07%
0.44%
-0.21%
GBP
-0.38%
0.15%
1.08%
0.24%
0.09%
0.60%
-0.17%
JPY
-1.75%
-0.95%
-1.08%
-0.82%
-1.07%
-0.50%
-1.29%
CAD
-0.64%
-0.07%
-0.24%
0.82%
-0.20%
0.36%
-0.42%
AUD
-0.42%
0.07%
-0.09%
1.07%
0.20%
0.61%
-0.26%
NZD
-1.00%
-0.44%
-0.60%
0.50%
-0.36%
-0.61%
-0.77%
CHF
-0.35%
0.21%
0.17%
1.29%
0.42%
0.26%
0.77%
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The US Dollar (USD) continues to benefit from safe-haven flows as investors assess the latest talks surrounding the US trade regime.
US Commerce Secretary Howard Lutnick said late Tuesday that another 15 to 20 tariff letters are expected to be announced in the next two days. Meanwhile, US President Donald Trump noted that the BRICS members will be subject to 10% tariff rate and added that they will be introducing tariffs on pharmaceuticals and semiconductors soon. Regarding the trade negotiations with the EU, Trump said that the EU is treating them “very nicely” and added that they are “probably two days off” from sending the EU letter.
In case the EU and the US manage to reach an agreement until Trump unveils the tariff decision on European imports, the Euro could gather strength with the immediate reaction. On the other hand, investors are likely to refrain from positioning themselves for a steady recovery in the Euro, while the uncertainty lingers.
Later in the day, the Federal Reserve (Fed) will publish the minutes of the June policy meeting. Nevertheless, investors could ignore this publication and remain focused on trade-related headlines.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays below 50 and EUR/USD continues to trade below the 20-period and the 50-period Simple Moving Averages (SMA), which made a bearish cross on Tuesday.
On the downside, 1.1700-1.1690 (static level, round level, lower limit of the ascending channel) aligns as a key support area ahead of 1.1660 (100-period SMA) and 1.1600 (static level, round level). Looking north, resistance levels could be seen at 1.1750-1.1760 (20-period SMA, 50-period SMA), 1.1800 (round level, static level) and 1.1830 (static level).
Euro FAQs
The Euro is the currency for the 19 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day.
EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy.
The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa.
The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control.
Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency.
A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall.
Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period.
If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Gold price licks its wounds early Wednesday after breaking the range to the downside.
Trade deals optimism and a hawkish shift in Fed expectations remain a drag on the non-yielding Gold price.
Gold price settles Tuesday below 50-day SMA, with a bearish daily RSI in play.
Gold price is battling $3,300, licking its wounds early Wednesday. Traders refrain from placing fresh bets on the bright metal, awaiting fresh trade updates and the Minutes of the US Federal Reserve (Fed) June policy meeting for fresh directives.
Gold price eyes trade talks, Fed Minutes
Following Tuesday’s over 1% decline, Gold price is nursing losses in Asian trading on Wednesday, unable to find much inspiration from mixed Chinese inflation data for June.
Data on Wednesday showed that China’s annual Consumer Price Index (CPI) rose 1% in June after falling 0.1% in May. Meanwhile, the nation’s Producer Price Index (PPI) dropped by 3.6% over the year in June versus -3.2% expected and -3.3% previous.
Investors continue to digest US President Donald Trump’s tariff talks, with the renewed optimism over likely US trade deals lending some support to the US Dollar (USD), capping the Gold price recovery attempts.
Trump extended the ‘reciprocal tariffs’ deadline until August 1, allowing some of the US trade partners more time for trade negotiations and reaching a deal. This narrative continues to float the boat for the Greenback at the expense of the USD-denominated Gold price.
Meanwhile, trade war re-ignited as Trump threatened 25%-40% tariffs on 12 countries and 10% additional levies on all BRICS nations, including India, effective August 1.
“The lingering threat to inflation from tariffs will probably persuade the Fed to hold off cutting interest rates until next year, and this will put a lid on Gold prices,” Reuters reported, citing Hamad Hussain, climate and commodities economist at Capital Economics.
However, markets remain wary about a trade stand-off between the US and Japan and the US and South Korea, while taking account of Trump’s latest tariff announcement of 50% on Copper imports to take effect within 30 months.
Further, the US President said on social media that there would be announcements on Wednesday regarding “a minimum of 7 countries having to do with trade,” without specifying whether he would be announcing new deals or tariff letters.
Alongside trade talks, the Fed’s June meeting Minutes also take center stage this Wednesday, with markets looking forward to fresh hints on the timing of the next interest rate cut, given the heightened uncertain environment due to Trump’s tariffs.
Markets are now pricing in a 61% chance that the Fed will lower rates in September, down from about 73% seen a week ago, the CME Group’s FedWatch Tool shows.
Gold price technical analysis: Daily chart
Gold price broke the recent range to the downside after piercing through the 50-day Simple Moving Average (SMA) at $3,322 on a daily closing basis on Tuesday.
The 14-day Relative Strength Index (RSI) found foothold below the midline in the bearish territory, currently near 44.50, suggesting that the tide has clearly turned in favor of Gold sellers.
Therefore, a sustained move below the 38.2% Fibonacci Retracement (Fibo) level of the April record rally at $3,297 is critical to extending the latest leg south toward the monthly low of $3,248.
The last line of defense for buyers is seen at the 50% Fibo support at $3,232.
Alternatively, any recovery attempts need acceptance above the 21-day SMA at $3,346.
Further up, the 23.6% Fibo level of the same advance at $3,377 could offer stiff resistance to Gold buyers.
The next topside hurdle is seen at the $3,400 threshold.
Economic Indicator
FOMC Minutes
FOMC stands for The Federal Open Market Committee that organizes 8 meetings in a year and reviews economic and financial conditions, determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. FOMC Minutes are released by the Board of Governors of the Federal Reserve and are a clear guide to the future US interest rate policy.
Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.
Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.
The expected trading range for today is between $5.4500 and $5.9800
The GBPJPY pair kept its positive stability above 66%Fibonacci correction level, to form a strong support at 198.80, resuming the rise and achieving new gains by reaching 199.80 level, approaching from the initial extra target at 200.35.
The continuation of stochastic fluctuation with the overbought level might push the price to target 200.35 level, which forces it to provide mixed trading until gathering the required extra positive momentum for achieving extra gains that might extend to 200.85 reaching the next main target at 201.55.
The expected trading range for today is between 199.00 and 200.35
Copper prices are under strong positive pressures, which allows it to surpass the barrier at $5.1000, to notice forming a strong bullish rally and achieving big gains by hitting $5.8100 level, forming an intraday rebound to $5.5500 to catch its breath and gather some gains.
Note that the price is surrounded by several positive factors that support the continuation of the positivity, such as the unionism of the main indicators by providing positive momentum besides forming extra support at $5.3200 level, which makes us prefer more of the bullish attempts that target 2.00%Fibonacci extended level at $5.9720, to approach from the resistance of the main bullish channel that appears in the above image.
The expected trading range for today is between $5.4500 and $5.9800
