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✅ Daily Market Analysis - TUESDAY JULY 25, 2023Key News: Canada - Manufacturing Sales (MoM) USA - S&P/CS HPI Composite - 20 n.s.a. (YoY) (May) USA - CB Consumer Confidence (Jul) On Monday, the Dow Jones Industrial Average extended its winning streak with an impressive eleventh-straight gain, primarily driven by a surge in energy stocks. Investor sentiment remained upbeat as they embraced the better-than-expected quarterly results from major technology companies. Additionally, market participants were eagerly awaiting the upcoming Federal Reserve's decision later in the week. Similarly, the S&P 500 also experienced gains, propelled by strength in energy stocks. Investors continued to digest the positive quarterly reports from prominent tech firms, contributing to the positive market sentiment. The anticipation for the Federal Reserve's decision added to the overall optimism, with investors closely monitoring the central bank's next move. Dow Jones Industrial Average indices daily chart S&P 500 indices daily chart Alphabet (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT), two major tech giants, are set to announce their earnings after the market closes on Tuesday. The tech sector faced some challenges last week, as bullish bets were affected by declines in Tesla (NASDAQ: TSLA) and Netflix (NASDAQ: NFLX) stocks. These slumps in prominent tech companies had an impact on investor sentiment towards the sector. As Alphabet and Microsoft prepare to release their earnings reports, investors will closely watch for any insights into the overall health and performance of the tech industry. GOOGL stock daily chart TSLA stock daily chart Wedbush analysts hold a positive outlook for this week, presenting a different scenario compared to the previous one, particularly for the tech sector. Their optimism is based on several contributing factors, including the strong performance of cloud services, monetization of artificial intelligence (AI), stabilization of digital advertising, and an overall environment of increased confidence in IT spending. With these factors in play, the analysts believe there is a compelling case for investing in tech stocks during the second quarter tech earnings season. In the currency markets, the US dollar exhibited sustained strength during overnight trading, continuing a significant rebound observed in the previous session. This strength led to the USD/JPY pair rising above the 140.00 level once again, indicating a bullish trend for the dollar against the Japanese yen. Investors and traders will closely monitor the dollar's movements in response to various economic factors and events in the global market. USD/JPY daily chart The recent reversal of the US dollar's weakness can be attributed to an uptick in US yields. Over the past week, the 2-year US Treasury bond yield rose by slightly over 20 basis points (bps) as market participants adjusted their predictions concerning the magnitude of the Federal Reserve's rate cuts for the upcoming year. However, the forecast for one final rate hike this month saw little change, indicating that investors are still expecting some tightening by the central bank in the near term. US Dollar Currency Index daily chart This week holds significant central bank meetings, with the Federal Reserve's meeting on Wednesday being particularly noteworthy. Interest rates have either reached their peak levels or are very close to doing so, and there is a possibility that this week could witness the Fed and ECB announcing their final rate hike in their tightening cycles. PMI data offers insights into the ongoing global economic cooling trend. Inflation is also on the decline, largely due to favorable base effects, falling energy prices, and slower growth in food costs. Recent PMI data from the eurozone, the UK, and the US all convey a similar message. The manufacturing sectors continue to face challenges, with the US performing better than expected. However, expectations for growth in services are slowing. These surveys indicate clear signs of further economic cooling, reduced inflationary pressures, and weaker hiring trends. While central banks may find some relief in the data, it's unlikely to be sufficient for them to claim victory or explicitly announce the end of their tightening cycles. Policymakers will proceed with extreme caution, although they will be encouraged by the positive data observed over the last month or two. Gold, in the meantime, appears to be pausing momentarily in anticipation of the upcoming Fed meeting on Wednesday. The yellow metal recently received a significant boost from positive economic data, coming close to reaching the $2,000 mark at one point last week. Investors will closely monitor the Fed's decisions and statements for further clues about the future direction of gold prices. XAU/USD daily chart Indeed, there has been some profit-taking in the gold market following the recent surge, causing the price to pull back to around $1,960. These price fluctuations have made it challenging to definitively interpret the short-term direction of gold. The future trajectory of gold will be heavily influenced by the decisions of the Federal Reserve. If the Fed provides a clear indication that the current rate hike will be the final one or surprises the market by not raising rates, it could trigger a bullish sentiment for gold. In such a scenario, the precious metal may have the potential to test the $2,000 level once again. A breakthrough above this psychological and technical barrier would serve as a strong bullish signal for gold, attracting further investor interest. Investors will closely monitor the Fed's actions and statements for any cues on how gold might behave in the coming days. The central bank's communication and stance on monetary policy will play a crucial role in shaping gold's price direction in the near term.
by FOREXN1
1
Daily Market Analysis - MONDAY JULY 24, 2023Key News: UK - S&P Global/CIPS UK Manufacturing PMI USA - S&P Global US Services PMI (Jul) The Dow Jones Industrial Average celebrated a remarkable milestone on Friday, securing its 10th consecutive weekly gain and extending its longest winning streak since 2017. However, the market's positive performance was tempered by cautiousness among traders ahead of the upcoming quarterly results from major tech companies. The Dow managed a marginal increase of 0.01%, equivalent to a mere 3 points, which might seem modest, but it's significant given the index's prolonged daily winning streak, last witnessed on August 7, 2017. The primary force behind the Dow's recent success lies in the gains made by defensive sectors, particularly utilities, which have helped bolster overall market sentiment. In contrast, the Nasdaq experienced a slight decline of 0.2%, while the broader S&P 500 index edged up by 0.1%, showcasing a mixed performance across the board. Traders remained watchful and exercised caution as they eagerly await the upcoming quarterly reports from major tech companies. These reports could have a considerable impact on market dynamics, influencing the direction of future trades and investor sentiment. NASDAQ indices daily chart DJI indices daily chart S&P500 indices daily chart As the new week kicked off, gold prices experienced a slight dip as investors exercised caution ahead of a highly anticipated Federal Reserve meeting. Meanwhile, copper prices faced significant losses, primarily driven by concerns surrounding weakening demand in China. The metal market witnessed additional pressures with the dollar staging a recovery. The greenback strengthened, moving away from the 15-month lows it had reached earlier in July. These developments have created a sense of uncertainty and wariness among investors, who are closely monitoring the upcoming Federal Reserve meeting for any signals that could impact the precious metals and copper markets. The performance of the dollar is also being closely scrutinized, as its strength or weakness can have substantial implications for metal prices and global trade dynamics. In light of the prevailing economic uncertainties, market participants are treading carefully and making informed decisions as they navigate through this crucial week, where the outcomes of central bank policies and macroeconomic indicators are expected to shape market trends in the near term. XAU/USD daily chart The spotlight in recent market activity has been firmly fixed on the Federal Reserve's forthcoming decision on interest rates, set to be revealed at the conclusion of a two-day meeting on Wednesday. The prevailing consensus among investors is that the central bank will opt to raise interest rates by 25 basis points. Nevertheless, there exists a strong belief among market participants that the Federal Reserve might also indicate a pause in future rate hikes. With the central bank nearing the conclusion of its nearly 16-month-long rate hike cycle, such a stance could signal a potential break from the previous trend of steady increases in interest rates. This prospect of an extended pause in rate hikes has caught the attention of investors, particularly in relation to the impact on the precious metal market, notably gold. Historically, rising interest rates tend to elevate the opportunity cost of investing in gold, as higher rates make alternative assets more appealing for yield-seeking investors. Conversely, if the Federal Reserve hints at a pause or slower pace of future rate increases, it could potentially be favorable for gold, as it reduces the opportunity cost of holding the precious metal compared to other interest-bearing assets. As the markets eagerly await the Fed's decision and the accompanying guidance, the implications for gold and other asset classes remain uncertain. The outcome of the meeting and the central bank's tone in their statements will undoubtedly have significant repercussions on investment strategies and market sentiment in the days to come. EUR/USD daily chart The dynamics in the EUR forward curve are undergoing a shift due to two essential factors. Firstly, foreign exchange traders are adjusting their pricing of lower US real rates in the long-term forwards after the recent Consumer Price Index (CPI) report. This indicates a realization that they may have been overly aggressive in their initial assessments. Secondly, the impact of ECB commentary on the Eurozone's economic data and inflation is likely to moderate, given the weaker economic indicators in the region. The Bank of Japan's decision on maintaining its current interest rates is also a significant point of interest. With rates at 0% or in negative territory for an extended period, it is somewhat expected that they will continue with this stance. China's 0% Consumer Price Index (CPI) rate is another crucial observation, as its potential spread could impact Japan first and have broader implications for global markets, particularly for stock markets and the future trajectory of the dollar. The actions and statements of these central banks will be closely watched by investors, as they could set the tone for market movements in the days to come. On a different note, the US earnings season is entering a crucial phase this week, with major companies like Meta Platforms, Microsoft, and Alphabet preparing to release their reports. These earnings announcements are likely to have a significant impact on stock markets and investor sentiment. As the week unfolds, investors will be navigating through these key developments in global monetary policies, inflation trends, and corporate earnings, which will undoubtedly shape market dynamics and future trading strategies. MSFT stock daily chart META stock daily chart GOOG stock daily chart Absolutely, the upcoming earnings results of major companies like Meta Platforms, Microsoft, and Alphabet are crucial in meeting market expectations and justifying the current valuation of the S&P 500. The current earnings multiple of 20 times and the substantial year-to-date gains of 19% in the index indicate high market optimism. Investors will be closely scrutinizing these earnings reports to assess the health and potential direction of the market. Meeting or exceeding market expectations in these reports will likely be seen as a positive sign, reinforcing confidence in the ongoing market rally. On the other hand, any disappointments or weaker-than-expected results could raise concerns and potentially lead to market corrections. Given the prevailing market conditions and the momentum in the S&P 500, investors are eager to ascertain the sustainability of the rally and whether the current valuations are justified by the underlying company fundamentals. As the earnings season unfolds, the market sentiment will be heavily influenced by the performance of these major companies, as well as the guidance provided by their management teams.
by FOREXN1
13
Daily Market Analysis - FRIDAY JULY 21, 2023Tech Titans' Earnings Fall Short as Dow Soars: Anticipation Builds for Fed's Rate Hike and Key Economic Data Key News: UK - Retail Sales (MoM) (Jun) Canada - Retail Sales (MoM) (May) Thursday was a day of divergent fortunes in the market's theater. The mighty S&P 500 and Nasdaq, usually riding high, stumbled and fell, their spirits dampened by the less-than-stellar quarterly performances of two iconic players, Tesla and Netflix. The stage seemed shrouded in uncertainty as investors watched with bated breath, wondering what lies ahead for these titans. NASDAQ indices daily chart S&P500 indices daily chart Tesla's once-soaring shares took a drastic nosedive, plunging by a staggering 9.20% in a single day—a remarkable tumble not witnessed since April 20. The catalyst for this sharp decline came as the electric-vehicle giant reported a distressing drop in its second-quarter gross margins, hitting a four-year low. Such grim tidings sent shockwaves through the market, leaving investors on edge and questioning the road ahead for the iconic company. Adding fuel to the fire of uncertainty, CEO Elon Musk dropped subtle hints about potential price cuts. These mere suggestions reverberated through the minds of shareholders like an ominous echo, further fueling the already prevailing negative sentiment surrounding the stock. In the realm of Tesla's fortunes, this tumultuous day served as a stark reminder of the company's vulnerability to market forces. The road ahead seems uncertain, and the once-invincible aura surrounding the electric-vehicle pioneer has shown signs of faltering. The stage is set for a gripping saga of financial maneuvers and strategic decisions, and only time will reveal how this drama unfolds. Tesla stock daily chart In the world of streaming giants, Netflix faced a significant setback as its stock slumped by a considerable 8.24%, experiencing its most substantial daily percentage drop since December 2022. The culprit behind this downturn was the company's disappointing quarterly revenue, which fell short of investors' estimates. The news sent shockwaves through the market, causing a wave of negative reactions from shareholders and casting a shadow of doubt over the future prospects of the streaming video powerhouse. Amidst the turmoil in the streaming industry, the dollar index showcased its resilience, remaining strong and resolute. Once again, it boldly approached the psychological barrier of 100, a level that had previously proven elusive during a previous attempt on Wednesday. The index's tenacity and determination have captured the attention of market participants, eager to decipher its implications for the global economic landscape. As these parallel narratives unfold in the realm of finance, uncertainty reigns supreme. Netflix grapples with challenges in an ever-competitive streaming market, while the dollar index stands tall, an indicator of broader economic forces at play. Investors and observers brace themselves for what lies ahead, as the stage is set for a thrilling and unpredictable act in the grand theater of global markets. US Dollar Currency Index daily chart In the ever-shifting landscape of global markets, the dollar index faced a challenging phase, enduring a 2.9% decline over the past fortnight. This decline was triggered, in part, by cooler-than-expected US inflation data and speculations about the Federal Reserve potentially concluding its tightening cycle sooner than previously anticipated. However, the index began to regain its lost momentum, showing signs of recovery. Wednesday proved to be a pivotal day, as the index emerged from a period of narrow consolidation. During this phase, a notable triple-Doji pattern manifested, revealing a sense of indecision lingering in the market. This pattern underscored the cautious sentiment among investors, who keenly observed economic indicators and the possibility of shifts in the Federal Reserve's monetary policy—two critical factors that could significantly sway the direction of the dollar index. Meanwhile, the gold market danced to a different tune on Friday, with prices witnessing an upswing. The yellow metal was on track for a positive week, primarily driven by growing expectations that the Federal Reserve might be nearing the conclusion of its rate hike cycle. Such expectations breathed life into gold's allure as a safe-haven asset, attracting investors seeking stability amidst the fluidity of the financial landscape. As financial actors around the world analyze the rhythm of economic indicators and central bank policies, the stage is set for a captivating performance in the intricate theater of currencies and commodities. The plot thickens, and the audience of investors eagerly awaits the next act, where every move and decision can shape the course of these intricate dramas. XAU/USD daily chart The gold market has been on an upward trajectory, marking the third consecutive week of gains for bullion prices. Notably, they have found stability in the high $1,900s range, largely due to the prevailing perception that there will be fewer US interest rate hikes for the remainder of the year. Investors in the gold market are carefully attuned to the future path of interest rates, a crucial aspect determined by the Federal Reserve's decisions, and closely monitor fluctuations in the US dollar's value. These two factors hold immense sway over gold prices, and any indications or clues from the Federal Reserve regarding its monetary policy stance are watched with great interest. During the past five trading days, the New Zealand dollar has faced significant headwinds, emerging as the weakest performer among the G10 currencies. Its downward trajectory against the US dollar continued yesterday, further fueling the greenback's broad rebound. The release of New Zealand inflation data hinted that the Reserve Bank of New Zealand (RBNZ) might maintain interest rates and might have already completed its tightening cycle. This development has strengthened the US dollar against the New Zealand dollar and has influenced the broader sentiment in currency markets. AUD/USD daily chart The upcoming week looms large with significant events, particularly in the technology sector. Major tech companies, including Microsoft, are gearing up to release their reports. These industry giants have witnessed remarkable stock growth this year, driven by optimistic expectations surrounding artificial intelligence and its potential for explosive expansion. Analysts eagerly await further details on these companies' AI plans and how they will impact earnings, as this information can sway market sentiments. The second quarter reporting season for banks will come to a close, with regional players like Comerica and Regions providing their updates. The banking sector has enjoyed the benefits of rising interest rates, enabling them to generate more revenue from loans. However, larger banks with Wall Street-focused businesses faced challenges due to a decline in deal-making activities, which affected their overall revenue. Investors will be closely monitoring these reports to gauge the sector's performance and outlook. The Federal Reserve's decisions remain under the spotlight, as the central bank is scheduled to convene to determine interest rates once again. The general expectation is that rates will be raised by a quarter of a percentage point. All eyes will be on Chair Jerome Powell's press conference on Wednesday afternoon, as investors seek additional hints about the Fed's future course and potential impacts on the financial landscape. Furthermore, key economic reports will be unveiled following the interest rate decision. These include the second-quarter gross domestic product (GDP) reading and the latest update on the personal consumption expenditures index—an essential measure of inflation. Investors and policymakers will closely scrutinize these reports as they hold vital clues about the health of the economy and its trajectory. As the curtain rises on the upcoming week, the stage is set for a flurry of events that will shape the narrative of global markets. Each piece of information unveiled in this dynamic performance will have far-reaching implications, captivating investors and stakeholders alike in the ever-evolving theater of finance.
by FOREXN1
7
Daily Market Analysis - WEDNESDAY JULY 19, 2023Greetings, traders! Welcome back to our daily Market Analysis. Today, we have gathered the top news and interesting fundamental analysis for your consideration. Let's dive in and stay informed! Key News: UK - CPI (YoY) (Jun) Eurozone - CPI (YoY) (Jun) USA - Building Permits (Jun) USA - Crude Oil Inventories Market Sentiment Boosted by Strong Earnings and Economic Data, Gold Prices Soar to Six-Week High Tuesday's trading session brought a wave of optimism among investors, with the S&P 500 surging to new heights, thanks to impressive quarterly results from prominent Wall Street banks and other major corporations. The S&P 500 index demonstrated significant strength, recording a notable 0.8% increase, while the Dow Jones Industrial Average saw an even more remarkable surge of 1%, adding a substantial 359 points to the index. The Nasdaq also showcased its resilience, posting a solid 0.9% upward movement. Moreover, in response to the prevailing positive sentiment, gold prices experienced a surge, reaching a near six-week high. Investors appear to be reacting favorably to the combination of strong corporate earnings and encouraging economic data, fueling the upward momentum across various sectors in the market. NASDAQ indices daily chart Dow Jones indices daily chart S&P500 indices daily chart Bank of America Corp (BAC) emerged as a standout performer, driving a surge in banking stocks with an impressive rise of over 4%. The bank's second-quarter earnings exceeded analyst estimates, mainly attributed to the significant boost in loan income due to higher interest rates. This strong performance has solidified Bank of America's position as a key player in the financial sector and has garnered positive attention from investors. Bank of America stock daily chart Morgan Stanley (NYSE: MS) Shines with Impressive Q2 Results Morgan Stanley (MS) proved to be another success story, witnessing a remarkable rally of 5% after reporting second-quarter results that surpassed estimates on both the top and bottom lines. The strong performance of its wealth management business effectively balanced out the trading business's weakness, which experienced a decline in equity and fixed-income revenue. This outstanding performance has garnered positive attention from investors and reinforces Morgan Stanley's position as a top-performing financial institution. Morgan Stanley stock H4 chart Tuesday's stock market session witnessed a slight downturn, influenced by US retail sales data that caused initial volatility but eventually settled. The June retail sales figures were notably weaker than expected, creating some concern, but the impact was partially offset by the revision of May's numbers, resulting in a mixed market sentiment. In response to a slowdown in consumer and producer price gains in June, the dollar experienced a significant decline. The market remains cautious as investors analyze the economic indicators to gauge the direction of future trends. US Retail Sales The recent developments in the US economy have led to increased expectations that the Federal Reserve will put a halt to its rate hikes after the anticipated 25 basis-point increase at the July 25-26 meeting. Fed funds futures traders are projecting an additional 33 basis points of tightening later in the year, with the benchmark rate expected to peak at 5.40% in November. On Tuesday, data revealed an unexpected drop in production at US factories in June. However, the second quarter showed a rebound, especially in motor vehicle output, which accelerated after two consecutive quarterly declines. Traders are now closely monitoring inflation releases from various regions, including the eurozone, Britain, and Japan, to gain further insights into whether inflation is cooling globally. These indicators will play a crucial role in shaping market sentiment and monetary policy expectations moving forward. US Dollar Currency Index daily chart As a result of the recent economic developments, the dollar index showed some volatility, last up 0.04% on the day at 99.924. However, it had previously fallen to 99.549, marking the lowest level since April 2022. These fluctuations indicate the significant impact of the latest data on the dollar's performance in the foreign exchange market. Against the Japanese yen, the dollar managed to gain 0.10%, reaching 138.83. This recovery came after the drop to 137.245 experienced on the previous Friday, which was the lowest level since May 17. The currency's rebound against the yen reflects the influence of the evolving economic landscape on currency pair movements. As traders continue to assess economic indicators and central bank policies, the dollar's performance is likely to remain subject to fluctuations in the forex market. Investors are closely monitoring data releases and inflation figures from major economies to determine potential shifts in monetary policies and overall market sentiment. USD/JPY daily chart Euro Holds Steady Amid ECB's Caution on Inflation On the flip side, the euro maintained its stability, trading at $1.1229, following an earlier climb to $1.1276, reaching its highest level since February 2022. European Central Bank (ECB) governing council member Klaas Knot's comments on Tuesday revealed the bank's vigilant approach towards inflation. Knot emphasized that the ECB would closely observe any indications of inflation cooling down in the coming months, ensuring a cautious stance on implementing rate hikes. This cautious approach from the ECB contributed to the euro's steady performance in the foreign exchange market. With investors closely monitoring central bank communication and economic indicators, the euro's movements are subject to shifts in market sentiment and policy expectations. As the global economic landscape continues to evolve, market participants will continue to assess data releases and central bank statements to gauge the euro's direction in the forex market. EUR/USD daily chart Market expectations are leaning towards the European Central Bank (ECB) implementing a 25 basis points interest rate increase in the upcoming week. On the other hand, the British pound experienced a marginal decline of 0.22%, settling at $1.3046 after reaching $1.3144 on Thursday, which marked the currency's highest level since April 2022. This volatility in the pound's performance reflects the market's sensitivity to economic indicators and interest rate expectations. These currency fluctuations underscore the significant impact of various factors on the global foreign exchange market. Traders and investors closely monitor inflation concerns and central bank communications, as these elements play a crucial role in shaping market sentiment and currency movements. As the economic landscape continues to evolve, market participants will continue to assess data releases and policy signals to navigate the currency market's changing dynamics. GBP/USD daily chart The Reserve Bank of Australia (RBA) is currently engaged in a balanced debate among policymakers, evaluating the effectiveness of existing restrictive measures and considering potential future actions. The central question revolves around the appropriateness of the current conditions and whether additional measures could yield positive or negative outcomes. Although the market is confident in the likelihood of another rate hike by the RBA this year, the exact timing remains uncertain. As demonstrated throughout this year, expectations can shift rapidly, making it challenging for investors to predict future developments with certainty. In the realm of precious metals, gold prices are once again exhibiting a gradual upward trend after experiencing a brief pullback in recent sessions. Initially facing resistance near $1,960, the price underwent a minor retracement but found support around $1,940. The ongoing support from lower yields and a weakened dollar continues to significantly contribute to gold's positive performance, as evidenced by the market movements observed yesterday. Investors are closely monitoring these factors as they continue to impact the precious metal's trajectory in the market. XAU/USD daily chart In response to the recent developments, gold has surged past the significant $1,960 threshold, attaining a nearly six-week high. Yields and the dollar have displayed fluctuations subsequent to the retail sales data release, influencing gold's performance in turn. Nevertheless, the market has not yet exhibited a clear and definitive direction for the precious metal. The crucial factor to observe now is whether gold can maintain its position above the critical $1,960 level, which it is currently approaching for testing. A successful hold above this mark could be interpreted as a bullish confirmation signal. In such a scenario, the next potential challenge for gold's price might be reaching the $1,980 level. Investors are closely monitoring these price movements and are poised to respond to any further signals indicating the precious metal's trajectory.
by FOREXN1
10
Daily Market Analysis - TUESDAY JULY 04, 2023Key News: USA - United States - Independence Day Australia - RBA Interest Rate Decision (Jul) Wall Street's main indices closed with modest gains on Monday in a shortened session, as Tesla (NASDAQ: TSLA) surged and bank shares showed resilience, signaling a subdued start to the second half of the year. Driven by news of record-breaking vehicle deliveries in the second quarter, Tesla saw a notable increase of 6.9% in its shares. Wells Fargo stock daily chart Citigroup stock daily chart In the realm of the financial markets, major banks emerged victorious as they adeptly navigated the rigorous annual health assessment conducted by the Federal Reserve, which, in turn, paved the way for them to raise their dividends. This accomplishment reverberated positively through the stock market, propelling their share prices to soar. Wells Fargo (NYSE: WFC), one of the prominent players in the banking sector, witnessed a remarkable 1.7% increase in the value of its shares, demonstrating its resilience and strategic prowess in the face of regulatory scrutiny. Meanwhile, Citigroup (NYSE: C), another heavyweight contender in the financial arena, experienced a solid ascent of 1.5% in its share price, attesting to its strong financial footing and ability to maintain stability in a constantly evolving economic landscape. The impact of the banks' successful performance was not confined to individual entities but had a broader effect on the industry. The S&P 500 banks index, serving as a barometer of the overall health and performance of major banking institutions, closed with a notable 1.5% gain, showcasing the collective strength and positive sentiment surrounding the financial sector as a whole. As investors and market participants alike acknowledged the banks' resilience and ability to meet regulatory requirements while delivering returns to shareholders, confidence in the stability and growth potential of the banking industry surged. This boost in investor sentiment bodes well for the financial sector, indicating a more optimistic outlook and paving the way for potential future expansions and innovations in the realm of banking and finance. S&P 500 daily chart The week ahead holds the promise of heightened volatility for the US dollar, as market participants brace themselves for potential fluctuations. At present, the Dollar Index reflects a downward trend, indicating a weaker position for the American currency. However, there is a possibility that it may undergo a significant test, aiming to reach the 104 level in the near future. Such a scenario would likely be influenced by a combination of economic factors, global events, and market sentiment, which can swiftly impact currency valuations. On the other hand, the Euro, serving as a key counterpart to the US dollar, is anticipated to maintain a relatively stable trading range. Market projections suggest that the Euro will continue to fluctuate within the boundaries of 1.08 to 1.10 against the US dollar. This range highlights a level of consistency in the Euro's performance and reflects the current equilibrium between the two major currencies. Factors influencing the Euro's movement may include economic indicators, political developments in the Eurozone, and any major policy decisions made by the European Central Bank. US Dollar Currency Index daily chart The EUR/JPY currency pair faces a crucial hurdle in order to avoid being stuck in a sideways range. A decisive breakthrough above the 158 level is necessary to signal a potential upward momentum. Such a breakthrough would indicate a shift in favor of the euro against the Japanese yen, potentially opening up further opportunities for the pair to appreciate. Traders and investors will closely monitor the price action around this level to determine if the pair can gather enough strength to break free from the sideways range and establish a new upward trend. On the other hand, the USD/JPY pair faces a different scenario. If the pair remains below the 145 level, there is a possibility of a decline towards the 144 level. This implies that the US dollar might weaken against the Japanese yen, reflecting a potential shift in favor of the yen. The 145 level acts as a crucial resistance, and failing to surpass it could indicate a lack of buying pressure for the US dollar. Traders and investors will carefully monitor the price dynamics and market sentiment surrounding this level to assess whether the pair will continue its downward movement and potentially target the 144 level. EUR/JPY and USD/JPY daily chart persistent inflation, robust economic data, and the resulting anticipation of higher interest rates. These factors have collectively exerted downward pressure on the price of gold, contributing to a challenging environment for the precious metal. Despite a minor recovery witnessed in the past few trading sessions, during which the price briefly dipped below the $1,900 mark, the overall trajectory for gold remains bearish. This implies that the prevailing sentiment and market dynamics are tilted towards further downward movement in the price of gold. The persistence of inflationary pressures has been a primary factor influencing the demand for gold as a safe haven and inflation hedge. Strong economic data, indicating a robust and expanding economy, has bolstered market confidence and reduced the appeal of holding gold as a protective asset. Additionally, the expectation of higher interest rates has amplified the attractiveness of alternative investment options, potentially diverting capital away from gold. While short-term fluctuations and temporary recoveries are not uncommon in financial markets, the broader trend for gold suggests a bearish outlook. Traders, investors, and market participants will closely monitor key economic indicators, central bank actions, and any shifts in market sentiment that may impact the future trajectory of gold prices. XAU/USD daily chart Indeed, there are indications of weakening momentum around the $1,900 level for gold, which raises the possibility of a corrective move in the near future. This observation suggests that the selling pressure and downward momentum may be losing steam, potentially paving the way for a temporary rebound or consolidation in the price of gold. However, it's crucial to note that a loss of momentum alone does not guarantee an immediate and decisive reversal in price direction. If there is a significant break below the $1,900 level, it could potentially trigger another downward plunge for gold, especially if momentum gains strength. Such a scenario would reflect a shift in market sentiment, with increased selling pressure overpowering any temporary recovery or consolidation. The extent of the downward move would depend on various factors, including market dynamics, investor sentiment, and the overall economic landscape. Considering the nearly 9% decline in gold prices since early May, a correction would not come as a surprise. Corrections are natural and healthy price movements that often occur after a significant rally or decline. They allow the market to reassess the prevailing trend, absorb new information, and establish a more sustainable price level. Traders, investors, and market participants closely monitoring the gold market will keep a watchful eye on key levels, momentum indicators, and other relevant factors to gauge the potential for a corrective move. BTC/USD daily chart The cryptocurrency Bitcoin has been displaying notable volatility, primarily fluctuating between the range of $30,000 to $31,000. This range-bound movement can be seen as encouraging by the crypto community, especially considering Bitcoin's recent impressive rally. Although Bitcoin has not experienced further significant gains, the fact that it has not retraced a substantial portion of its recent surge suggests that traders and investors maintain an optimistic outlook. They perceive the current phase as a consolidation period within a larger upward movement. It is important to note that the ultimate outcome and direction of Bitcoin's price movement will depend on future news developments and market factors. The hypothesis of this consolidation phase serving as a stepping stone for a potential continuation of the upward trend is speculative and will require time to confirm or refute. However, based on the information available thus far, the current market behavior surrounding Bitcoin is generally viewed as positive. The absence of a significant retracement following a substantial rally can be interpreted as a sign of resilience and underlying strength in the market. It demonstrates that there is ongoing support and demand for Bitcoin, even amidst fluctuations and uncertainty. As with any investment or trading activity involving cryptocurrencies, it is crucial for participants to exercise caution, conduct thorough research, and stay informed about market developments. Cryptocurrency markets are known for their volatility and can be influenced by various factors, including regulatory decisions, adoption trends, and overall market sentiment.
by FOREXN1
14
Daily Market Analysis - MONDAY JULY 03, 2023Key News: USA - Independence Day - Early close at 13:00 UK - Manufacturing PMI (Jun) USA - ISM Manufacturing PMI (Jun) Friday marked a momentous day on Wall Street as the three major indices experienced a robust surge, igniting a wave of optimism among investors. Notably, the Nasdaq, renowned for its focus on technology stocks, achieved an extraordinary feat by posting its largest first-half gain in the past 40 years. This remarkable milestone underscored the resiliency and strength of the technology sector, which has been a driving force behind the market's upward trajectory. Adding to the positive sentiment was the phenomenal achievement of tech giant Apple, as it soared to a market valuation of $3 trillion. This significant milestone was a testament to the company's enduring appeal and relentless pursuit of innovation. Not since January 2022 had Apple reached such heights, and this remarkable accomplishment further solidified its position as one of the most influential and valuable companies in the world. Apple's stock performance on Friday was nothing short of impressive. Closing at $193.97, it recorded a notable increase of 2.3%, with the stock even reaching a new all-time high of $194.48. This surge in Apple's stock price was fueled by a combination of factors, including the growing investor enthusiasm for growth stocks and the unwavering confidence in Apple's ability to conquer new markets. Investors' renewed faith in growth stocks, particularly in the technology sector, has been a driving force behind the recent market surge. The allure of exponential growth potential and groundbreaking innovations has captivated market participants, leading to increased allocations in companies like Apple. Moreover, Apple's unwavering commitment to excellence and its track record of success have bolstered investor confidence, making it an attractive choice for many. Apple's ability to penetrate and thrive in new markets has further fueled investor optimism. The company's forays into various sectors, such as healthcare, augmented reality, and autonomous vehicles, have been met with great anticipation. Investors believe that Apple's strong brand, vast resources, and exceptional product ecosystem position it favorably to succeed in these emerging industries. This confidence in Apple's long-term prospects has propelled its stock to new heights. As the market continues to evolve and navigate through various challenges, the impressive performance of the Nasdaq and Apple serves as a beacon of hope and optimism. Their achievements not only symbolize the resilience of the technology sector but also provide a glimmer of possibility for future growth and innovation. Investors are closely watching these developments, eager to capitalize on the momentum and potential opportunities that lie ahead in the ever-evolving world of technology. Apple stock daily chart On the last day of the second quarter, investors displayed a heightened level of interest, primarily influenced by the Federal Reserve's closely observed indicators, which pointed to a moderation in US inflation. According to a report released by the Commerce Department, the Personal Consumption Expenditures (PCE) index showed a 3.8% increase, lower than the 4.3% figure recorded in April. When excluding the volatile prices of food and energy, the core PCE index saw a growth of 0.3%, slightly lower than the previous month's 0.4% rise. BEA, US Personal Consumption Expenditures (PCE) index The release of this data has instilled optimism among investors, raising the possibility that the Federal Reserve's cycle of raising interest rates could be approaching its conclusion. The decrease in Treasury yields, which was triggered by the alleviation of inflationary pressures, has played a role in fostering this positive market sentiment. Burns McKinney, a portfolio manager at NFJ Investment Group in Dallas, Texas, emphasized the impact of declining yields on the overall market conditions. In terms of performance, the Nasdaq index delivered its strongest first-half showing in four decades, delivering a remarkable gain of over 31%. Notably, the Nasdaq 100 index, comprising prominent technology stocks, achieved its highest first-half gain on record, surging by approximately 39%. On Friday, the S&P 500's growth index experienced a rise of 1.4%. Alongside Apple, other popular stocks favored by investors, including Microsoft, Nvidia, Amazon, and Meta Platforms, significantly contributed to the positive performance of the S&P 500. These stocks registered gains ranging from 1.6% to 3.6%, capitalizing on their impressive rallies propelled by strong earnings and the increasing interest in artificial intelligence. S&P 500 indice daily chart NASDAQ indice daily chart As we embark on the first full week of July, there are several noteworthy events lined up on the economic calendar. One such event is the Reserve Bank of Australia (RBA) rate decision, scheduled for Tuesday at 5:30 am GMT+1. This decision holds significant interest as market participants eagerly await to see whether the central bank will increase its Official Cash Rate (OCR) by 25 basis points (bp) to 4.35% or maintain the status quo. The RBA's rate decisions have been closely monitored, particularly due to the surprise 25bp rate hikes in the previous two meetings. The most recent monthly Consumer Price Index (CPI) data revealed a 5.6% increase in the twelve months leading up to May. Although this figure is lower than April's 6.8% and market expectations of 6.1%, it still plays a role in shaping the RBA's decision-making process. Additionally, strong employment data and uncertainties surrounding China's economic recovery have contributed to a 63% probability of the RBA keeping rates unchanged this week. Market participants will be closely watching the outcome of the RBA rate decision as it has the potential to impact not only the Australian economy but also global market sentiments. Australia interest rate In the United States, the upcoming releases of the ISM Manufacturing and Services Purchasing Managers' Index (PMI) will draw considerable attention. The Services PMI has been indicating contractionary conditions for several months, and the release scheduled for Monday at 3:00 pm GMT+1 is expected to continue this trend. Forecasts suggest a range between 48.3 and 46.7 for the Services PMI. On Thursday at 3:00 pm GMT+1, the ISM Services PMI will be released, which has remained in expansionary territory but experienced a decline from 51.9 in April to 50.3 in May. The median expectation for June's release is 51.0. It is worth noting that the past three months have exhibited a range between 52.0 and 50.0 in the Services PMI readings. These PMI releases provide valuable insights into the health of the manufacturing and services sectors in the US. Market participants will be closely monitoring these indicators as they can influence market sentiment and provide indications of economic trends and business activity levels. US ISM Purchasing Managers Index (PMI) One of the most highly anticipated data releases in the United States this week will be related to the labor market indicators. On a day preceding the non-farm payroll report for June, both the ADP non-farm employment change and JOLTS job openings data will be published at 1:30 pm GMT+1. Market participants will closely watch these indicators as they provide crucial insights into the state of the labor market. They serve as important precursors to the official non-farm payroll report, which is scheduled for release on Friday. The median consensus among analysts is for an addition of 225,000 new payrolls in June, which marks a decrease from the robust figure of 339,000 recorded in May. In addition, the unemployment rate is expected to remain unchanged at 3.7%, while average hourly earnings are projected to match the previous month's value of 0.3%. It is worth noting that a strong jobs report for June would increase the likelihood of a rate hike later in the month. These labor market indicators are closely monitored as they provide valuable insights into the overall health of the US economy, the pace of job creation, and potential wage growth. The data can significantly impact market sentiment and influence monetary policy decisions. US Unemployment rate In its June meeting, the Federal Open Market Committee (FOMC) decided to maintain the Federal Funds target rate at its existing level. However, the committee signaled a hawkish stance, indicating a potentially more aggressive approach to monetary policy. This was reflected in the FOMC's dot plot, which outlines individual policymakers' projections for interest rates. Based on the dot plot from May, the FOMC projected two additional rate increases by the end of 2023. This suggests a tightening monetary policy in the near future. Market participants have taken note of this guidance, and as of now, they are pricing in an 80% probability of a 25 basis point hike at the next FOMC meeting scheduled for July 26. Following the anticipated rate hike in July, there is speculation that the FOMC may pause its tightening cycle and potentially even consider rate cuts in 2024. However, it's important to note that market expectations and projections can change based on incoming economic data and the evolving policy stance of the Federal Reserve. These market expectations regarding future rate movements are crucial for investors and can significantly impact various asset classes and market sentiment. Traders and market participants closely monitor such probabilities and projections to make informed decisions and position themselves accordingly in the financial markets.
by FOREXN1
10
Daily Market Analysis - THURSDAY JUNE 29, 2023Mixed Trading Day Driven By Market Reactions To Powell's Remarks And Tech Stock Performance Key News: USA - Fed Chair Powell Speaks USA - GDP (QoQ) (Q1) USA - Initial Jobless Claims USA - Pending Home Sales (MoM) (May) During Wednesday's trading session, the Nasdaq saw a moderate rise, driven by the positive performance of large-cap stocks. However, contrasting this upward trend, both the S&P 500 and the Dow ended the day with losses. The decline in these indices was influenced by comments made by US Federal Reserve Chair Jerome Powell. Powell's statements indicated a strong possibility of further rate hikes and expressed skepticism regarding inflation reaching the central bank's target rate within the foreseeable future, stating that it may not occur "this year or next year." NASDAQ indice daily chart DJI indice daily chart SPX indice daily chart During a European Central Bank forum, US Federal Reserve Chair Jerome Powell expanded on his earlier remarks, discussing the potential for future rate increases and keeping the possibility of a hike at the upcoming policy meeting in late July on the table. Despite an initial dip into negative territory, investors exhibited a relatively calm reaction to Powell's comments, likely due to positive indications of economic strength. Throughout the trading session, one notable highlight was Apple Inc (NASDAQ: AAPL), which achieved a new all-time high and closed at a record high for the second consecutive session. This impressive performance from Apple contributed to the overall gains in the market. Additionally, prominent companies such as Tesla (NASDAQ: TSLA), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOGL) played significant roles in driving the upward momentum observed in the S&P index. The market's response to Powell's statements suggests that investors are maintaining a cautiously optimistic outlook, considering both the potential for future rate increases and the underlying strength of the economy. As they assess these factors, market participants closely monitor the upcoming policy meeting and eagerly anticipate further developments that could shape the trajectory of the financial markets. Apple daily chart However, chipmaker Nvidia (NASDAQ: NVDA), known for its popularity among investors interested in artificial intelligence, experienced a decline of 1.8% and emerged as the primary detractor for the benchmark index. This downward movement was triggered by a report from the Wall Street Journal, indicating that the United States might impose additional restrictions on the export of AI chips to China. The prospect of stricter regulations in this key market created concerns and impacted Nvidia's stock performance. Despite the decline in Nvidia's shares, European markets maintained their positive momentum on the following day, following a break in the six-day losing streak observed on Tuesday. However, gains were tempered by remarks made by Federal Reserve Chairman Jay Powell, which injected a note of caution into the market sentiment. Meanwhile, the Japanese yen continued to weaken, reaching record lows on a trade-weighted basis. This decline in the yen was sustained, and Bank of Japan Governor Kazuo Ueda provided no indication that policymakers were ready to intervene or halt this ongoing depreciation. The weakening yen can have implications for various sectors of the Japanese economy, including exports and international trade. Investors and market participants closely monitor the developments surrounding Nvidia's potential export restrictions and their implications for the global technology sector. USD/JPY daily chart The subdued performance observed in the US market sets the stage for a flat opening in European markets. However, market participants are cautiously optimistic that upcoming data releases, starting with Germany's June inflation figures, could potentially influence a softening of the prevailing hawkish stance. In recent months, there has been a noticeable deceleration in inflationary pressures, with the rate dropping from 7.6% in April to 6.3% in May. While the anticipated June figures are expected to show a modest increase to 6.8%, they are unlikely to alleviate the concerns held by the European Central Bank (ECB) regarding the rapid receding of inflation. The market's focus now turns to the crucial release of Germany's inflation data, as it carries significant implications for the broader Eurozone economy. Analysts and investors alike will closely scrutinize these figures to assess the extent of inflationary pressures within the region and to gain insights into the potential policy responses from the ECB. A continuation of the trend towards lower inflation could reinforce the calls for a more accommodative stance, potentially shifting market expectations away from imminent rate hikes. While the June inflation figures are expected to reflect a slight uptick, it is crucial to note that they are unlikely to significantly alter the prevailing concerns surrounding inflationary dynamics. The ECB remains vigilant in monitoring the situation and is poised to take appropriate action if inflationary pressures fail to stabilize or rise in line with their targets. Beyond Germany's inflation data, market participants will also closely monitor upcoming releases from other Eurozone countries, as they provide additional insights into the broader inflationary trends within the region. The overall goal is to gain a comprehensive understanding of the underlying inflation dynamics and their potential impact on the ECB's monetary policy decisions. GBP/USD daily chart Towards the end of the London session, the British pound experienced pronounced weakness within the G10 space. This decline can be attributed to remarks made by Bank of England (BoE) Governor Andrew Bailey during his participation in the ECB Forum on Central Banking in Sintra. Bailey's comments regarding UK interest rates contributed to the pound's vulnerability, as he indicated that they are likely to remain elevated for an extended period due to persistent inflationary pressures. The latest data on headline inflation in the UK revealed no change, with a figure of 8.7% for the twelve months leading up to May. Moreover, year-on-year core inflation, excluding food and energy prices, surged to 7.1%. Bailey highlighted this as a specific challenge confronting the UK economy, further dampening market sentiment towards the pound. Concerns arose regarding the potential risks of a recession stemming from excessive policy tightening in response to the elevated inflation levels. Investors responded to Bailey's remarks by reassessing their outlook on the pound, which resulted in notable weakness for the currency. The market began to question the potential consequences of prolonged high interest rates and the potential negative impact on economic growth. The possibility of a recession became a prominent concern, given the perceived risks associated with excessive policy tightening. As market participants absorb Bailey's comments and evaluate the implications for the UK economy, the British pound remains under scrutiny. Traders and analysts closely monitor any further developments related to inflationary pressures and the Bank of England's policy stance. The market sentiment towards the pound will likely be influenced by future economic data releases and any subsequent statements from central bank officials, as they provide insights into the potential course of action and the management of inflationary challenges. EUR/USD daily chart The euro experienced a downturn in sentiment yesterday, primarily driven by a mixed set of data releases. While the Italian Producer Price Index (PPI) showed a slower decline than anticipated in May, indicating lower deflationary pressures in the country, consumer price inflation in the eurozone eased more than expected, signifying a slowdown in price growth. These contrasting inflationary signals added to the overall weak sentiment surrounding the euro. Adding to the concerns, the European Central Bank (ECB) reported a deceleration in money supply growth, indicating a moderation in liquidity. This moderation could potentially impact economic activity and limit the availability of funds for businesses and consumers. Furthermore, loans to the private sector expanded at a slower rate than expected, suggesting a potential tightening of credit conditions due to higher interest rates. This tightening of credit could hinder investment and spending, thereby impacting economic growth. Taken together, these indicators pointed towards a more restrictive credit environment and raised concerns about the overall economic outlook. The mixed data and the signals of potential credit tightening weighed on market sentiment towards the euro, contributing to its weaker performance.
by FOREXN1
3
Daily Market Analysis - TUESDAY JUNE 27, 2023Market reactions are varied and uncertain due to the ongoing uncertainties in Russia and concerns about inflation. Key News: Eurozone - ECB President Lagarde Speaks USA - Building Permits USA - Core Durable Goods Orders (MoM) (May) USA - CB Consumer Confidence (Jun) USA - New Home Sales (May) On Monday, the US stock market experienced a decline as investors adopted a cautious approach towards riskier assets due to uncertainties surrounding the outcome of the disrupted mutiny in Russia over the weekend. The mutiny, led by Russian mercenaries, raised concerns about the future of President Vladimir Putin and the stability of the country. While Putin expressed gratitude on Monday towards the mercenaries and commanders who chose to stand down, thus preventing bloodshed, the US State Department highlighted that the situation in Russia remained fluid and unpredictable. The impact of these geopolitical events was evident in the performance of the primary indices, particularly with regards to growth stocks. Companies such as Meta Platforms Inc (NASDAQ: META), Alphabet Inc (NASDAQ: GOOGL), and Tesla Inc (NASDAQ: TSLA) experienced significant downward pressure, resulting in sharp declines in their stock prices. Investors' caution stemmed from the potential ripple effects of the Russian mutiny on global political and economic stability. Uncertainties surrounding the future leadership and governance of Russia, as well as the potential for geopolitical tensions, contributed to the market's apprehensive sentiment. As a result, investors opted for a more risk-averse approach, leading to the decline in growth stocks. The situation in Russia will continue to be closely monitored by market participants, as any further developments or shifts in geopolitical dynamics could have implications for global markets. Investors will seek clarity and stability before reevaluating their risk appetite and investment strategies. META stock daily chart GOOG stock daily chart TSLA stock daily chart The foreign exchange market currently lacks clear signals favoring safe-haven currencies such as the US dollar, Japanese yen, or Swiss franc. This subdued response can be attributed to two key factors that are influencing market dynamics. Firstly, there is a sense of uncertainty surrounding the future in the aftermath of the challenge to President Putin's authority in Russia. The mutiny led by Russian mercenaries has raised questions about political stability and the potential implications for global markets. As a result, investors are exercising caution and refraining from taking strong positions in safe-haven currencies until there is greater clarity on the situation. Secondly, the financial markets have already witnessed a year of a stronger dollar and higher energy prices due to the ongoing Russian invasion of Ukraine. This prolonged geopolitical tension has had an impact on currency markets, and investors may be hesitant to further increase their exposure to safe-haven currencies, considering the recent market trends. Instead, the primary focus of the market currently lies on inflation. Central bankers and governments are facing criticism for maintaining loose monetary and fiscal policies for an extended period. The upcoming annual ECB symposium in Sintra is expected to delve into this topic, particularly focusing on monetary policy. Many central bank governors from the G7 nations are anticipated to attend the event and deliver a potentially hawkish message, similar to Federal Reserve Chair Jerome Powell's recent testimony to Congress. Market participants are eagerly awaiting insights and guidance from central bank officials regarding their stance on inflation and the potential tightening of monetary policy. This focus on inflation dynamics and monetary policy decisions is shaping the market sentiment and influencing currency flows. USD/JPY daily chart The anticipation of an approaching recession has led to expectations of inverted yield curves, as investors assess the economic landscape. Consequently, the US dollar is projected to maintain its strength against currencies that lack robust monetary defenses. This strength is particularly evident in the USD/JPY currency pair, which is expected to sustain its upward trend as investors seek the safety of the US dollar. Another significant event on the US economic calendar this week is the release of core Personal Consumption Expenditures (PCE) inflation data for May, scheduled for Friday. Market participants will closely analyze this data as it carries crucial implications for monetary policy decisions. If the data reveals another high reading, especially around 0.4% month-on-month, it would indicate that inflationary pressures persist and may prompt the Federal Reserve to maintain its hawkish stance without signaling any plans for easing monetary policy. Investors will closely monitor these developments as they shape market expectations and influence currency movements. The interplay between recession concerns, the strength of the US dollar, and inflation dynamics will be crucial factors driving investor sentiment and decision-making in the foreign exchange market. US Dollar Currency Index Based on forecasts, the US Dollar Index (DXY) is expected to fluctuate within the range of 102.00 and 103.00 over the course of this week. In addition, the USD/JPY currency pair is anticipated to approach the intervention zone around 145. On the preceding Friday, Europe received discouraging data concerning the Purchasing Managers' Index (PMI), particularly in the services sector, which indicated a decline. This adds to the already sluggish state of the manufacturing sector. Consequently, the EUR/USD currency pair witnessed a decrease of approximately 50 pips following the release of this data. The weakening PMI figures in the services sector contribute to concerns about the overall economic growth and recovery in Europe. As a result, market sentiment towards the euro has been dampened, leading to a downward pressure on the EUR/USD pair. The data release highlights the challenges faced by the Eurozone economy and underscores the importance of monitoring economic indicators to gauge the direction of currency pairs. In the coming days, market participants will closely monitor economic data releases, central bank communications, and geopolitical developments, as these factors can significantly influence the movement of currency pairs, including the EUR/USD and the broader US Dollar Index. EUR/USD daily chart The prevailing narrative of central banks needing to maintain higher interest rates for an extended period may initially appear unfavorable for the pro-cyclical euro. However, the European Central Bank's (ECB) hawkish stance has provided some defense against the elevated interest rates in the United States, leading to the EUR/USD currency pair rising above 1.09. This stance also reinforces the expectation of two additional 25 basis points rate hikes in July and September, potentially offsetting the modest easing anticipated in 2024. Given the current circumstances, it is likely that the EUR/USD will continue to trade within the range of 1.0850 to 1.1000, while the desired outcome of a smooth economic transition and a more accommodative policy from the Federal Reserve seems to be further delayed. The challenges faced by central bankers in navigating the shift from a relatively straightforward decline in headline inflation driven by base effects to the more complex task of reducing core inflation are extensively discussed in the financial press. Many countries are experiencing core inflation rates around 5%, with the Bank of England contending with an even higher rate of 7%. In light of this situation, it is expected that Bank of England officials will not hesitate to price the Bank Rate above 6% early next year. Additionally, it is anticipated that the government will maintain its stance on mortgage interest relief, as compromising on this issue would only complicate the Bank of England's efforts. These factors underscore the intricacies and challenges faced by central banks in addressing inflationary pressures and maintaining financial stability. Market participants will closely monitor central bank actions and policy decisions as they navigate these complex dynamics, which will have a significant impact on currency movements and trading strategies in the coming months. EUR/GBP daily chart The decline in Eurozone PMI data on Friday had a notable impact on the EUR/GBP currency pair, leading to a decrease in its value. Despite concerns about a potential hard landing for the UK economy, your initial analysis remains unchanged regarding the Bank of England's response. Looking at the UK calendar for this week, the key focus will be on Bank of England speakers, particularly BoE Governor Andrew Bailey's event on Wednesday, which will draw significant attention. The remarks and insights provided by central bank officials can have a considerable influence on currency movements and market sentiment. Based on current analysis, it is anticipated that the EUR/GBP pair may experience a retreat and potentially reach the level of 0.8520 during the week. This suggests a strengthening of the British pound against the euro. Additionally, for the GBP/USD currency pair, it is expected to find support below the 1.27 level, indicating a potential resilience of the pound against the US dollar.
by FOREXN1
8
Daily Market Analysis - Thursday June 15, 2023Market Analysis: Global shares decline, dollar recovers as Fed pauses rate hikes; ECB and BOJ meetings awaited. Key events on the economic calendar include: New Zealand GDP (QoQ) for the first quarter. Eurozone Deposit Facility Rate announcement for June. Eurozone ECB Interest Rate Decision for June. US Core Retail Sales (MoM) data for May. US Initial Jobless Claims report. US Philadelphia Fed Manufacturing Index for June. US Retail Sales (MoM) data for May. Eurozone ECB Press Conference. On Wednesday, global stock markets saw a decline, while the US dollar managed to regain some of its losses. This came after the US Federal Reserve, as expected, announced a pause in its interest rate hikes. However, the central bank also hinted at the possibility of raising rates by an additional 0.5% before the end of the year. During its recent two-day meeting, the Federal Reserve presented new economic projections that indicated a potential 0.5% increase in borrowing costs by the end of 2023. This projection was based on a stronger-than-expected economy and a slower decline in inflation. US Fed funds rate The Federal Open Market Committee (FOMC), responsible for determining interest rates, unanimously stated in its policy statement that maintaining the current target interest rate range during this meeting would allow the committee to assess additional information and its implications for monetary policy. While it was widely anticipated that the US Federal Reserve would pause its rate hikes, the focus shifted to the communication surrounding potential future increases. In a surprising twist, the participants of the FOMC adopted a more hawkish stance. The median forecast for the end of 2023 regarding the Federal Funds rate was revised upward by 50 basis points, now ranging from 5.50% to 5.75%. SPX NASDAQ and DJI indices daily chart Following the announcement, the closing results of the stock market exhibited a mixed picture. The Dow Jones index concluded the day with a decline of over 230 points, while the S&P 500 index managed to secure a modest gain of 0.1%. The Nasdaq index, on the other hand, experienced a more significant increase of 0.4%. Notably, the Nasdaq Composite index was primarily driven by the positive performance of AI-related stocks, including Nvidia and AMD. In addition to the stock market movements, Wednesday started with Bitcoin surpassing the $26,000 milestone. However, it retraced shortly afterward and reached a 24-hour low of $25,791. Analysts are speculating that it may potentially drop further to $25,000. These sentiments are influenced by ongoing discussions on cryptocurrency regulation, which have been dominating the news recently. BTC/USD daily chart On the flip side, gold prices initially saw an uptick, reaching $1,959 per ounce during the session. However, as Asian traders kickstart their day, the price of gold has resumed its downward trajectory, edging closer to the $1,930 level. This downward movement can be attributed to the hawkish stance of the US Federal Reserve (Fed), which has bolstered the United States Dollar (USD). The prevailing market sentiment currently favors the USD, consequently exerting downward pressure on the price of gold. XAU/USD daily chart The US dollar has demonstrated a decline against multiple currencies, resulting in a 0.32% drop in the DXY index. Among the currencies, the New Zealand dollar (NZD) experienced the most notable movement, surging by over one percent and reaching a three-week high at $0.6211. Meanwhile, the Euro (EUR) and the British Pound (GBP) registered more modest gains, each recording an increase of 0.39%. NZD/USD daily chart Despite the release of favorable exports and machinery orders data, the Japanese yen encountered a 0.9% decline, emerging as the primary loser in the Asian markets. Investor focus was predominantly directed towards the upcoming Bank of Japan (BOJ) meeting scheduled for Friday. It is widely expected that the central bank will maintain its accommodative monetary policy stance to bolster domestic economic growth. This anticipated approach is anticipated to have a favorable influence on Japanese stocks. USD/JPY daily chart Nevertheless, the Japanese yen is expected to encounter further selling pressure as interest rates rise in other regions, diminishing its appeal. Bank of Japan (BOJ) officials, including the newly appointed Governor Kazuo Ueda, have expressed their intention to maintain the bank's yield curve control policy to provide support to the domestic economy. Furthermore, the diminished anticipation of Japanese government intervention in stabilizing currency markets has contributed to the yen's weakening. While officials have issued verbal warnings, no concrete actions have been taken thus far. Currently, traders are closely watching the upcoming monetary policy announcements from the European Central Bank (ECB), scheduled for later in the day at 12:15 GMT. It is widely anticipated that the ECB will implement a 25 basis points increase in key rates. However, the Staff Economic Projections and the subsequent press conference by President Christine Lagarde will play a crucial role in shaping future policy direction. Market expectations indicate that interest rates will likely reach their peak in July, with speculation of an additional rate hike following June's increase, followed by a potential pause in September. If the ECB adopts a more hawkish stance by implementing a rate hike, it is expected to exert additional selling pressure on the price of gold.
by FOREXN1
1
Market Updates at a Glance: 08 March 2022 (Tuesday)🌎☛S&P 500 on the Brink of Technical Collapse. A Risk-off mood Spurred Demand for Safe-haven Assets. ➤US stocks plummeted with Dow -2.37%, S&P 500 -2.95% & Nasdaq -3.62% On technical front S&P 500✔️ -Price broke below the Head & Shoulder Neckline, with lower highs of the right shoulder. -checkout my previous post about the target prices/levels to watch. ➤The US dollar index jumped to above 99 with 10-year Treasury yield rebounded higher at the support level 1.7% to 1.77%. ➤GBP plunged to 1.31 (-1%) , the lowest level since Sep 2000. EUR continued with the downtrend, slipped to 1.085, near the Feb20's low. ➤Oil (Uk oil) narrowed its gains on Monday, closed at $124.09, with intraday high hit $138. On technical front:✔️ -yesterday's candle is a high wave candle, it indicates indecision of the market, foresee some weakness unless price retest the high of $138. ➤Gold jumped to near $2000 as VIX (Fear Index) was constantly high, closed at 36. On Technical Front:✔️ Resistance: $2000 (big round number), $2030, $2060. ➤BTC & XRP in sideways, BTC near $38,000, XRP near 0.7200. ☛Check out my previous post about the Head & shoulders pattern in S&P 500: lnkd.in ☛Like & follow so you won't miss any market updates ☟ lnkd.in lnkd.in
SP:SPX
by Szeyee_L
⛰️ Mountains and Cheese! 🧀 Mountains and Cheese, Cheese-Mountains! The EUR/CHF is currently trading in our yellow target area. We expect a trend reversal to happen soon. This expectation is valid as long as we don’t cross below the 1.09441 CHF. Below this support, the bears are in charge, and we have to deal with further downside potential. Primary expectation are quotes at around 1.13500 CHF to complete the impulsive wave iii depicted in blue. Stops for Long trades can be placed below 1.09250 CHF. What do you think? Cheers.
Long
by MarketIntel