Fed to hike faster boosting USD and hurting oil demand outlook

GBP/USD => The pound falls to 1.3020
American Express => The stock trades 13% higher this year
Oil => The commodity falls to $102

GBP/USD awaits retail sales, PMIs.

GBP/USD fell 0.3% in the previous session as central bankers were in focus; BoE’s Andrew Bailey warned that the UK economy was expected to slow due to the rise in inflation and the squeeze on household income. Meanwhile, Fed Chair Powell, as expected, cemented expectations for a 0.5% interest rate increase in May and potential another in June. The more hawkish Fed stance boosted the USD. Today UK retail sales are expected to fall in March as consumer confidence plummets. UK and US business activity data (PMIs) are expected to remain resilient comfortably over 50 the level that separates expansion from contraction.

Where next for GBP/USD?

After failing to break above the falling trendline at 1.31, GBP/USD rebounded lower. The RSI also turned lower and is supportive of further downside. The first line of support can be seen at 1.30 psychological level ahead of 1.2980 April 19 low and 1.2972 the 2022 low. Bulls would look for a move over 1.31 yesterday’s high and the falling trendline in order to look towards 1.3150 the April 14 high and expose the 50 sma at 1.32.

American Express Q1 earnings preview

American Express is due to report Q1 earnings ahead of the US open. Wall Street expects AMEX to report revenue net of interest expense of $11.6 billion, a rise of 28% compared to the same period last year. However, Diluted EPS is expected to fall 12.7% to $2.39 as comparatives from last year were particularly tough when earnings surged 568%. In the previous update, American Express updated its full-year 2022 outlook; it said it plans to grow revenue by 18% – 20%, while EPS for the year is expected at $9.25 – $9.65, which was down slightly from last year’s impressive $10.02.

Oil falls, set for a weekly decline

Oil prices are falling on Friday, snapping a two-day winning run and putting the commodity on track for a 4% decline across the week. The oil price is declining amid concerns over the demand outlook amid rate hikes, slowing global growth, and COVID lockdowns in China, hurting demand. This week has been another volatile week for oil as supply concerns remain as Europe continues to mull over the prospect of banning Russian crude. Looking ahead the 

Support can be found at 101.50 (50 sma) and 100.00 (psychological level).

Resistance for the index can be seen at 105.35 (yesterday’s high) and 109.20 (weekly high).