Market analysis

Tech earnings from Microsoft, Apple, Meta and Amazon to set the early tone for UK markets this week before focus the switches to whether the Fed and Bank of England will cut interest rates. Early signals suggest traders want to buy risk.

US data steps away from the limelight to make way for inflation reports from the UK, Canada, New Zealand, and Japan. And throw in an ECB meeting, Australian employment report and the CCP's Third Plenum for good measure.

Interest rates are starting to be cut across the developed world. The combination of lower borrowing costs and positive economic growth should benefit cyclical assets, including stock indices which have lagged during the aggressive rate tightening cycle of recent years. That presents an opportunity for traders.

Today, millions of UK citizens are heading to polling stations to vote in the general elections, while the US is out celebrating Independence Day. Then it is all about the French legislative election on Sunday, which can arguably have a bigger influence on the FTSE 100 forecast than the UK vote today.

EURUSD Forecast: EURUSD is trading above of its key consolidation ahead of FOMC minutes

The FTSE moved moderately higher after the UK’s inflation rate fell to the Bank of England’s 2% target ahead of for the central bank’s rate section on Thursday.

EUR/USD is holding below its rising trend line and the 50-day EMA in the 1.0820 region, hinting at the potential for more downside in the coming week.

EURUSD Forecast: EURUSD price levels brace for volatility with the upcoming speech from Fed Powell, U.S CPI metrics, and ECB Financial Review.

EUR/USD may have seen its bounce off 1.0600 support stall at 1.0740 – see the levels to watch moving forward!

With most major events scheduled outside the continent, EUR/USD direction looks set to be dictated by external influences next week. Preference is to sell rallies given the technical breakdown on Friday.

DAX technical levels and factors to watch on the German index as it tests the pivotal 18,000 level with the focus turning on the ECB rate decision, while US sticky inflation concerns make unwelcome return ahead of PPI data.

US dollar eases off after initial bounce, after US NFP rose by 300K, although it was boosted by part-time jobs. US CPI and ECB policy decision coming up next week, which should provide some direction for the EUR/USD.

Tensions surrounding the Middle East has unsettled markets. US indices such as the S&P 500 are on track for their worst week of the year, crude oil reached a fresh YTD high and the risk-off sentiment was even enough to knock gold from its record. Traders therefore need to be on guard for headline risks surrounding the Middle East next week, alongside the usual bouts of economic data and central bank meetings.

EUR/USD was poor last week, finding little benefit from the Federal Reserve delivering a dovish surprise at its March FOMC meeting. With little event risk to speak of in the week ahead, and trading through its 50-day moving average, selling rallies is favoured.

US data will continue to play a major role for EUR/USD, with PPI and Retail Sales on tap tomorrow. See the key levels to watch!

UK stocks track Chinese markets and commodities higher. Rising commodity and precious metals prices should support mining stocks, plenty of which are constituents of the FTSE. Meanwhile, technical analysis suggests the UK stock index could finally join global rally.