The Wednesday session has a plethora of economic announcements, but quite frankly there are only a few that we will be watching. The first one of course is the German Consumer Price Index numbers coming out. We are anticipating an announcement of 0.8%, and as a result this could move the Euro in general. The EUR/USD pair has found the 1.33 level to be supportive, and the hammer printed for the Tuesday session suggests that the market is ready to bounce anyways. A better than anticipated number could in fact lift both the DAX and the Euro in general.
The next announcement that we are paying attention to is the Employment Change number out of the United Kingdom. This is a three-month number, and it is anticipated that we should see in addition of 270,000 jobs. This will have an effect on the British pound as the GBP/USD pair close just above the 1.68 handle during the day on Tuesday, and this could give us more momentum to the upside if the number is better than anticipated. The FTSE looks a bit weak at the moment, so this could also give us a bit of a boost in that market. Adding to the pressure of the day is the fact that the Bank of England releases its Inflation Report later.
US Advance Retail Sales come out with an anticipated number of 0.2% for the month of July, and this could give the S&P 500 a chance to continue going higher off of the trend line that appears on the charts. With that, we believe that the market would try to break above the 1945 level, and perhaps head back towards 1990. The uptrend is still intact, but the significant sell off that we have had recently suggests that the market could be ready to go higher again now that the trend line has proven itself.
The US Department of Energy Crude Oil Inventories number comes out later in the day, and while that is in a major market moving event, it certainly is for the WTI Crude Oil market. With that being the case, oil markets could in fact be at a “tipping point”, as the $96.50 level has been rather supportive. If we find that demand for oil has fallen, we could break down to the $95.00 level, and then the $92 handle.