US stock declined on Tuesday amid fears that aggressive rate hikes will drag the economy into a recession ahead of Wednesday’s critical inflation report. Slowing economic growth and soaring inflation continued to weigh on investors’ mood across financial markets, as economists said that inflation kept heating up in June and might force the Federal Reserve to gear for another big rate hike. Meanwhile, the escalating fears about a global recession made market participants fly to the safe-haven greenback for safety and exerted bearish pressure on equity markets. In the Eurozone, macroeconomic data showed that the Economic Sentiment plunged to -53.8 in July, much worse than the previous -28 and missed expectations. The energy crisis in the area, supply chain disruptions, and the ECB’s intentions to hike interest rates both dragged the Euro lower.

The benchmarks, S&P 500 and Dow Jones Industrial Average, dropped on Tuesday as the market is nervous about a global recession and a possible 75 bps rate hike in July by the Fed. The S&P 500 was down 0.9% daily and the Dow Jones Industrial Average declined with a 0.6% loss for the day. All of the eleven sectors stayed in negative territory as the energy and information technology sectors are the worst-performing among all groups, losing 2.03% and 1.34%, respectively. The Nasdaq 100 meanwhile declined the most with a 1.0% loss on Tuesday and the MSCI World index fell 0.8%.

Main Pairs Movement

The US dollar remained steady on Tuesday, losing its upward momentum after touching a daily high of 108.500 level during the Asia session. The DXY index stopped the bullish atmosphere sustained for several days as investors waited for the oncoming US inflation report scheduled on Wednesday.

The GBP/USD bounced from a daily low of 1.1810 level to around 1.1900 on Tuesday as the US dollar became mild during the Asia session. The Bank of England governor said there are alternatives to 25bps rate hikes in the table, adding he expects inflation to fall sharply next year. Meanwhile, EUR/USD also rebounded from a 20-year low 1.0000 level during the Asia session to close at around 1.005 at the end of the day, the fears of a slowdown in economic growth and the aggregation of Fed accentuate the importance of the oncoming inflation report.

Gold declined with a 0.3% loss on Tuesday, although there is a rebound during the Asia session as the US dollar is mild, the gold is still under bearish pressure ahead of the CPI report announced on Wednesday and closed at $1728 at the end of the day. Meanwhile, WTI dropped nearly 8% on Tuesday, oil is falling sharply during the NY session as the concern that China could enter another round of Covid-19 lockdown.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY heads into the correction phase after reaching a 24-year peak. The corrective pullback seems to be some profiting taking ahead of the US CPI on Wednesday. Technical speaking, USDJPY witnesses some profiting- taking after hitting the upper bound of the bullish channel as well as the immediate resistance of 137.75. However, the outlook of USDJPY remains bullish as it continues to trade within the ascending channel and above the 20 Simple Moving Average. As long as USDJPY stays above the 135.00 mark, the upside momentum is expected to remain unchanged. On the flip side, failure to hold above 135.00 would erode its bullish outlook on the four-hour chart. Further price action eye on the US CPI report.

Resistance: 137.75

Support: 136.27, 135.36, 134.62 

GBPUSD (4-Hour Chart)

GBPUSD extends its recovery on Tuesday, trading above 1.1900 in the second half of the day. The US dollar faces some difficulties to advance the US CPI report. From the technical perspective, GBPUSD stages a modest recovery after hitting the pivotal support of 1.1807. The intraday outlook remains bearish as the pair still trades within the descending channel. The recent recovery might be a correction due to the RSI indicator on the four-hour chart falling into the oversold territory. To claim GBPUSD’s upside momentum, it has to advance above 1.1994. On the contrary, failure to defend the support level of 1.1807 would bring the pair further south.

Resistance: 1.1994, 1.2110, 12203

Support: 1.1807

EURUSD (4-Hour Chart)

EURUSD was once trading as low as 1.0000 but has managed to climb into a positive move during the American trading session ahead of the US inflation data. From a technical point of view, EURUSD maintains its bearish stance as its lower leg has been built; however, the psychological support of 1.0000 would be hard to compromise. The recent advance could be EURUSD’s correction as the RSI indicator has reached the oversold territory, suggesting a pullback. To the upside, EURUSD would need to climb above the midline of the Bollinger Band to claim its bullish stance in the near-term picture.

Resistance: 1.028, 1.0453, 1.0593

Support: 1.0000

Economic Data

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Stocks slumped on Monday, with trades positioning for a high inflation reading and the start of a key earnings season that could provide clues as to whether the economy is heading for a recession. On the trade of the day, the dollar climbed, and a sell-off in mega-caps like Tesla Inc. and Apple Inc. weighed heavily on the equity market. Twitter Inc. plunged 11% as Elon Musk give up his $44 billion deal to buy the company, setting a predictable legal battle with Twitter.

The benchmarks, S&P 500 and Nasdaq 100 both slumped on Monday as investors are waiting to see
if profits are holding up or if companies will cut forecasts significantly amid widespread economic challenges. Nine out of eleven sectors of S&P 500 closed negative in the trade of the day as the COMM SVC and the CONS DISCRET are the worst performing sectors among all groups, losing 2.76% and 2.80% respectively. The S&P 500 fell 1.2% as of 4 p.m. New York time. The Nasdaq 100 fell 2.2% The Dow Jones Industrial Average meanwhile fell 0.5%.

Main Pairs Movement

The US dollar surged on Monday, continuing its rally and reaching fresh highs against most major rivals amid risk-off sentiment. The DXY index was surrounded by bullish momentum for most of the day, refreshing its daily high above 108.2 level in the late American session. The news showed that inflation in China surged by 2.5% YoY in June, disfavoring the market mood. Moreover, a new coronavirus outbreak has been reported in Shanghai, which may result in fresh lockdowns and potential negative effects on the global economy.

GBP/USD tumbled with a 1.12% loss on Monday amid the stronger US dollar across the board. The risk-averse market atmosphere and growing recession fears both exerted bearish pressure on the cable at the start of the week. The GBP/USD pair witnessed heavy selling during the first half of the day, then rebounded slightly to recover some of its daily losses. Meanwhile, EUR/USD remained under bearish pressure and refreshed its fresh 20-year low at 1.003 during the US session. The pair was down almost 1.36% for the day.

Gold declined with a 0.46% loss for the day after touching a daily low below $1732 during the US trading session, as the US dollar continued to find safe-haven demand and edged higher against its most major rivals. Meanwhile, WTI oil extends its pullback and retreated to the $103 area amid fears of slower demand.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY advances aggressively as the US Fed-BOJ monetary policy divergence continues to weigh on the pair, and the greenback remains supportive. Technical speaking, the outlook of USDJPY catches aggressive bids on Monday at the time of writing. On the four-hour chart, bullish momentum remains strong and supportive as the pair keeps up its trade within the bullish channel. More importantly, USDJPY has breached the psychological resistance of the 137.00 mark, hovering around the upper band of the bullish channel. To the upside, a successful breakout of the resistance of 137.75 and the upper band of the channel would lead USDJPY to another rally. However, further upside momentum might be capped as the RSI indicator has reached the overbought territory, suggesting a pullback.

Resistance: 137.75

Support: 136.27, 135.36, 134.62

GBPUSD (4-Hour Chart)

GBPUSD extends further slide toward 1.1867 on Monday at the time of writing amid the risk-averse market atmosphere, boosting the demand for the greenback. From the technical perspective, GBPUSD stays under bearish pressure after failing to break the bearish channel last Friday. The intraday slide has formed a double-top pattern for the pair, suggesting a bearish momentum. On the downside, the breakout of the interim support of 1.1867 would magnify the selling pressure, highlighting the lack of buyers’ interest. According to the technical indicators, GBPUSD is expected to slide further as the RSI indicator has not yet reached the oversold region; in the meantime, the MACD has turned downside, indicating a reverse from bullish to bearish.

Resistance: 1.2063, 1.2178, 1.2272

Support: 1.1876

Gold (4-Hour Chart)

Gold struggles near YTD low as strong greenback buying remains unabated. Gold stays in negative territory slightly below $1,740. Gold remains bearish but somehow gathers strength to yield a fresh downside leg. The support level of $1,732 behaves as a robust pivot to defend the last ground. If $1,732 can hold, then it is expected to see a powerful rebound as the MACD has turned positive, lending some support to bulls; in the meantime, reaching the lower band of the Bollinger Band might also initiate some meaningful recovery.

Resistance: 1766.80, 1788.13, 1805.36

Support: 1732.32

Economic Data

US stock closed flat on Friday after struggling for direction throughout the session as the strong US job report eased recession fears but further supported the case for a 75 bps rate hike by the Fed to fight inflation. Earlier in the North American session, the Nonfarm Payrolls report added 372K jobs to the economy in June, exceeding market estimations of 268K and fueled the Fed to stay aggressive to combat inflation.

Two of the Federal Reserve’s officials also said that they supported raising the interest rate by 75 basis points for the second month in a row. In the Eurozone, the consensus amongst ECB policymakers remained around a 25 bps rate hike. On top of that, the EU’s ongoing energy crisis kept weighing on the shared currency as the economy is likely to face a shortage of energy after prohibiting oil imports from Russia.

The benchmarks, S&P 500 and Nasdaq 100 both edged higher on Friday as market traders remain mixed on the upbeat job report. The S&P 500 was little changed on a daily basis and the Nasdaq 100 advanced with a 0.1% gain for the day. But nine out of eleven sectors stayed in negative territory as the materials and real estate sectors are the worst-performing among all groups, losing 1.00% and 0.55%, respectively. The Dow Jones Industrial Average meanwhile declined with a 0.1% loss on Friday and the MSCI World index rose 1.6%.

Main Pairs Movement

The US dollar edged lower on Friday, losing its upside traction and retreated back to the 106.9 level after the softer risk tone lend support to the safe-haven greenback. The DXY index witnessed heavy bullish momentum and was pushed higher to a daily high above 107.7 level in the early European session, but then started to see fresh selling meanwhile surrendering most of its daily gains. The market focus remained on the Fed’s normalisation process and the next moves regarding interest rates as June’s US Nonfarm Payrolls report exceeded expectations and reaffirmed the economy’s strength.

GBP/USD advanced slightly with a 0.08% gain on Friday amid the weaker US dollar across the board. But investors remain concerned that the UK government’s controversial Northern Ireland Protocol Bill could trigger a trade war with the European Union. The cable remained under bearish pressure and dropped to a daily low below the 1.193 mark, but then regained upside strength to recover all of its daily losses. Meanwhile, EUR/USD rebounded back after dropping to a fresh 20-year low at 1.0071 during the European session. The pair was up almost 0.30% for the day.

Gold advanced with a 0.12% gain for the day after touching a daily high above $1750 during the US trading session, despite the US dollar rising to fresh 20-year highs as US bond yields surged. Meanwhile, WTI oil climbed back toward the $105 area as supply fears amongst traders have spurred a rise in oil prices.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY oscillates amid the US economic data and the news of Japan ex- leader Shinzo Abe’s assassination. Technical speaking, the outlook remains positive on the four-hour chart. The US dollar remains supported by the fundamental backdrop and the technical perspective.

USDJPY got pushed higher with the formation of a higher high. The breakout of the resistance of 135.70 gives USDJPY an upside momentum toward the next resistance of 137.00. As the RSI indicator is still far from overbought, USDJPY is expected to trade higher. On the flip side, USDJPY needs to fall below the bullish trend line and the support of 134.89 in order to lose traction.

Resistance: 135.7, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD has managed to advance in positive territory above the descending channel. The upside movement of the currency pair witnesses risks sentiment, making it harder for the US dollar to preserve its strength despite better-than-expected Nonfarm Payrolls in June.

From the technical perspective, intraday’s upside momentum boosted GBPUSD above the midline of the Bollinger Band; in the meantime, GBPUSD has advanced above the bearish channel. Both suggest that GBPUSD manages to stage a positive rebound in the near- term. The acceptance above 1.2063 would confirm the positive shift. On the flip side, if GBPUSD fails to hold above the bearish channel and fails to breach the immediate resistance, then it could potentially stage back to negative territory. As both MACD and the RSI indicator are showing signs of bulls, GBPUSD is expected to head further north.

Resistance: 1.2063, 1.2178, 1.2272

Support: 1.1876

Gold (4-Hour Chart)

Gold edges slightly higher despite rising US yield and a better- than- expected US economic data.

From the technical aspect, gold clings slightly above the support level of 1732.32, trying to defend the last land before heading further south. The lower-low formation has given gold pressure, attracting some follow-through sellers. Current support would be robust as the RSI has reached the oversold territory and the MACD has slightly turned positive, giving some signs of attracting some dip- buyers. If the support ends up failing to defend, then more selling pressures would come into play.

Resistance: 1766.80, 1788.13, 1805.36

Support: 1732.32

Economic Data

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US stocks rose for three days in a row, as investors parsed economic data that hinted at slower growth, which also prompted some to brush off the hawkish stance reiterated by Fed in June meeting minutes. All eyes need to be on the Fed, officials ‘’agreed” last month that interest rates may need to keep rising for longer to against entrenching inflation.

However, data released Wednesday showed that US job openings dipped slightly in May but remained near a record, and the growth in the US services sector also eased in June to a two-year low. This prompted some traders convinced that Fed’s stance has a little too real market situation.

On the benchmark side, both S&P500 and Nasdaq 100 rose on Wednesday although Fed reiterated the hawkish stance in June meeting minutes. S&P500 was up 0.36% daily and the Nasdaq 100 also advanced with a 0.6% gain for the day. In addition, eight of eleven sectors stayed in positive territory as utilities and info tech sectors are the best among all groups, gaining 1.01% and 0.88%, respectively. It is worth noting that, the energy sector remains bad performance on Wednesday and lose 1.74%. The Dow Jones Industrial Average meanwhile increased by 0.2% and the MSCI world index declined by 0.5% on Wednesday.

Main Pairs Movement

The US dollar continued to rise for three straight days, and the DXY index surged up and cling to a 20-year high of 107.05 after the hawkish stance reiterated by Fed. This is a sign of the market still fears the global recession.

The EUR/USD remained bearish, the pair fell to a new 20-year low of 1.0161 at the last hour of Wednesday. Besides the Fed’s hawkish attitude toward US high inflation, the broad pessimism surrounding economic growth, central bankers’ aggregation, and the energy crisis make a downside pressure.

The GBP/USD was also in a bearish momentum despite a bounce-off on late Wednesday from a two-year low around 1.1925. The Cable pairs are still suffering from UK’s political joined Brexit woes and broad recession fears. However, the market anxiety ahead of the Fed’s stance and softer US economic data seems to have probed the bears of late.

Gold has turned into a consolidation phase after a sheer downside move to $1,732 in the NY session. As Fed’s aggressive attitude infused fresh blood into the US dollar, the precious metal suffered a high downside pressure.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY edges slightly lower but keeps above the 135.00 level ahead of the FOMC meeting. From the technical perspective, the outlook maintains its bullish trend on the four-hour chart as the pair continues to trade within the ascending line. On the downside, falling below the support of 134.89 would bring the pair to the downside in the near- term. On the upside, the divergent monetary policies between the Fed and the BOJ would capitalize on the USD’s gain and undermine the Japanese Yen. As the RSI remains on the midline, further price action is eye on the FOMC meeting.

Resistance: 135.7, 137

Support: 134.89, 134.24, 133.59
 

GBPUSD (4-Hour Chart)

GBPUSD holds above the support level of 1.1876 at the time of writing ahead of the FOMC meeting. The US dollar remains strong and outperforms the British Pound on the back of better-than-expected ISM Service PMI economic data. From the technical aspect, the outlook of GBPUSD remains bearish on the four-hour chart as the pair falls within and below the descending channel, suggesting that GBP is lack attraction. In the meantime, a bearish MACD continues to lend support to bears while the RSI is on the edge of 30 readings. The pivot support of 1.1876 would be viewed as a defending cross-line, whether regaining the buyers’ confidence. If the support cannot sustain, then it is expected to see the currency pair extend further south.

Resistance: 1.2063, 1.2178, 1.2272

Support: 1.1876

Gold (4-Hour Chart)

Gold extends its slump below $1740, a fresh 10- month low ahead of FOMC Minutes. The Dollar Index and the benchmark 10- year US Treasury yield continues to soar, putting additional weight on the precious metal, gold. From the technical perspective, the intraday outlook remains downside as the pivotal support from yesterday fails to defend, now attracting more follow-through sellers. In the meantime, a bearish MACD signal also hints at gold’s further downside toward the next support of $1736.20. However, an oversold RSI might give the selling pressures a break; some dip buyers might start buying at this stage before FOMC Minutes.

Resistance: 1768.69, 1789.66, 1806.60

Support: 1734.80

Economic Data

US stock rebounded slightly after falling as much as 2.2% on Tuesday as fears of a globalized recession take their toll on financial markets. The talks of easing tariffs on China imposed by the former administration failed to appease recession fears as concerns about a potential US recession and stubborn inflation remained, despite the reducing tariffs on imported Chinese goods could impact consumer prices in the US. The release of the FOMC minutes in today’s session will remain in focus, providing a detailed view of Federal Reserve policymakers on supporting the Fed’s 75 basis points interest rate hike. In the Eurozone, German Economy Minister Robert Habeck noted that the energy industry crisis could hurt financial markets as Russia has curbed its gas flows to the country. Market participants expect the European Central Bank to hike rates by 130 bps by year-end.

The benchmarks, S&P 500 and Nasdaq 100 both rose on Tuesday despite the safe-haven US dollar taking advantage of the risk-aversion and risk-off market mood. S&P 500 was up 0.2% daily and the Nasdaq 100 also advanced with a 1.7% gain for the day. But eight out of eleven sectors stayed in negative territory as the energy and utilities sectors are the worst-performing among all groups, losing 4.01% and 3.43%, respectively. The Dow Jones Industrial Average meanwhile declined with a 0.4% loss on Tuesday and the MSCI World index rose 0.3%. Global equity markets remain under pressure as investors rushed to the dollar’s safety recently.

Main Pairs Movement

The US dollar advanced and surpasses the 106.00 level to touch a new cycle high on Tuesday. The US dollar soared over 1.3% due to the fears of a globalized recession, continuing to find demand amid risk-averse scenarios. According to analysts, the risk of a US recession is above 70%.

EUR/USD was surrounded by bearish momentum, The EUR/USD pair fell to a 20-year low of 1.0236, recovering some ground later in the day but still hovering below the 1.0300 thresholds. Economic reports show that EU growth slowed to a 16-month low, while Germany struggles to get gas amid gradually increasing tensions with Russia. German Economy Minister Robert Habeck said that the energy industry crisis could hurt financial markets. He did not rule out intervening gas prices. Russia curbed its gas supplies to the country, Germany, therefore, fears a complete blackout of provision, as Russia will temporarily shut down the NordStream-1 pipeline on July 11 for annual maintenance. By contrast, the risk-off dollar seems more attractive to the Euro. Meanwhile, GBP/USD slumped as well yesterday. The pair was down 1.41% for the day.

The gold price plummeted over 2.4% on Tuesday, and rebounded back slightly after touching a daily low below $1764 in the late European session, now hovering slightly below 1770.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY gains positive traction for the second consecutive day as the risk sentiment favours the US dollar at the time of writing. The outlook of USDJPY consolidates in between 134.89 and 137.00 ahead of the FOMC meeting. However, the divergent monetary policies between the Fed and the BOJ should limit the downside of USDJPY. USDJPY has breached the resistance level of 135.7, suggesting an upside momentum in the near- term. To the upside, if the immediate support can sustain and hold, then it would possibly contest the peak at 137.00. On the flip side, if the support fails to defend, then USDJPY is expected to consolidate.

Resistance: 135.70, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD renews multi-year lows in March 2020. The outlook of GBPUSD remains bearish as the pair continues to trade below the descending trend line; in the meantime, the bearish momentum is supported by the double-top formation. At the time of writing, GBPUSD is contesting the immediate support level of 1.1899. If the pair can recover at this stage, then it could potentially attract some dip-buying buyers, but bears are still in charge. On the downside, if the support cannot hold, then the pair would accelerate further south. At the moment, the selling pressure seems to moderate a bit as the RSI has reached the oversold condition and the MACD has turned upside.

Resistance: 1.208, 1.2192, 1.2283

Support: 1.1899

Gold (4-Hour Chart)

Gold slides sharply below $1,770 following the extra pace and renewed upside momentum of the safe- haven, the US dollar. The intraday decline is supported by multiple factors, including a stronger US dollar and a hawkish Fed expectation ahead of the FOMC meeting. From the technical perspective, gold is facing strong selling pressure, suggesting that gold is in the bearish mode. Dropping below the descending channel has brought further gold south. Breaking the channel has accelerated the bearish momentum toward the support level of $1,765. If the support fails to defend, then gold would confront another fresh selling pressure. In the meantime, the double-top formation has been constructed, meaning that gold is in the situation of bears. The current support level might be able to stop the bears a bit as the RSI indicator has reached the oversold territory. Further price action eyes on the upcoming FOMC meeting.

Resistance: 1791.85, 1818.39, 1821.76

Support: 1765.11

Economic Data

US equity market remained closed yesterday due to the US Independence Day holiday, but the cautious mood ahead of this week’s Monetary Policy Meeting Minutes from the Fed and the European Central Bank has exerted bearish pressure on investors’ sentiment. The futures for the US equity index and European bonds fell as investors worried that a faster pace of monetary tightening from global central banks will slow economic growth. Therefore, the economic fears kept the risk profile weak, which in turn helped the US dollar to remain upside momentum.

On the economic data side, the Producer Price Index from Eurozone rose 0.6% in May and came in weaker than the market’s expectations of 1%, which continues to warrant rate hikes from the European Central Bank. The dismal European data undermined demand for the Euros meanwhile the energy crisis also acted as a headwind for the shared currency amid the Russian invasion of Ukraine. The market focus now shifts to the FOMC minutes of its latest meeting on Wednesday and the Nonfarm Payrolls report on Friday, as market participants expect that the Fed elevated its interest rates by 75 basis points in its June monetary policy meeting.

Main Pairs Movement

A slow beginning to the week, as US markets were closed due to the Fourth of July Holiday. The DXY index was also in the mood of holiday during the first half of Monday and stay steadily around 105.1, and then gained some strength by the end of the day, reaching 105.198, but the action was limited as some traders stayed away from their desks.

GBP/USD was surrounded by bullish momentum at the start of Monday, even reaching a daily high around 1.2154, but then lost its bullish traction and fell to around 1.2105, since Brexit woes undermined demand for the Pound. At the same time, EUR/USD got a rebound from last Friday’s low of around 1.039 to a daily high of around 1.045 at the middie on Monday, but then Dismal European Data undermined demand for shared currency, and EUR/USD closed by 1.0425.

Gold continued the rebound momentum gained from last Friday’s daily low below $1786 and managed to reach above $1812.5, but then fell below $1805 as the expectation of a hike in interest rates makes gold less attractive.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY advances toward near 135.70 at the time of writing. USDJPY turns upside after experiencing a correction. From current levels, weakness below the resistance level of 135.70 would continue to find robust support at 134.89. If the support level is broken, then it would trigger a fresh technical selling, making USDJPY slide further south. On the flip side, if the pair can break through the resistance at 135.70 and further above the ascending trend line, then USDJPY could potentially attract more buyers to lift the pair above the psychological level of 136.00 and 137.00.

Resistance: 1.35.70, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD clings around 1.2100 on Monday. The pair has reversed its direction after reaching near the support level around 1.1934 area. The British Pound looks to regain position as the RSI indicator stays below, suggesting that buyers remain on the sidelines for the time being; in the meantime, the MACD has turned positive, indicating the reversal trend from bearish to bullish. To the upside, GBPUSD is heading toward the next resistance at 1.2227; if the pair can successfully breach the level, then it would continue to head north. On the downside, if the support level of 1.1934 cannot eventually defend the line, then GBPUSD would slide further south.

Resistance: 1.2227, 1.2408, 1.2555

Support: 1.1934

Gold (4-Hour Chart)

Gold struggles to stage a recovery on Monday following last week’s drop. Despite gold attempts to climb above the $1,800 level, it stays under modest bearish pressure, remaining within the descending channel. At the moment, even though the RSI indicator stays below the midline, gold looks to be capped by the midline of the Bollinger Band, having a hard-to-move further north. Gold needs to climb above $1,835 to reclaim bulls in the near- term. On the flip side, if the current support level at $1,784 cannot hold, then gold would accelerate further south.

Resistance: 1835.026, 1866.243

Support: 1784.565

Economic Data

US stock advanced on Friday and recovered some of the ground lost in Thursday’s session, as the late-day rebound might be exacerbated by low volume ahead of Monday’s holiday. The risk of a renewed selloff in equities is still high due to the pessimistic growth outlook, as investors are worried that the tighter monetary expectations in the face of higher inflation will lead to economic growth slowing and a possible recession. On the economic data side, the Institute for Supply Management’s US manufacturing PMI fell to 53 from 56.1 in May, which was the weakest since June 2020 and showed that the manufacturing activity in the US has weakened as new orders contracted. The market focus now shifts to this week’s minutes of the Federal Reserve’s June meeting, as the central bank is expected to raise interest rates by 75 basis points.

The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Friday despite the safe-haven US dollar advanced on recession fears. Nasdaq 100 was up 0.7% daily and the Dow Jones Industrial Average also advanced with a 1.0% gain for the day. All eleven sectors stayed in positive territory as the utilities and consumer discretionary sectors are the best performings among all groups, rising 2.48% and 1.97%, respectively. The S&P 500 climbed the most with a 1.1% gain on Friday and the MSCI World index rose 0.5%. For the week ahead, Nonfarm Payrolls will be the key data that might provide fresh impetus.

Main Pairs Movement

The US dollar advanced on Friday, rebounding from the 104.7 level that touched on Thursday and extending its rally toward the 105 area amid risk-off market sentiment. The DXY index was surrounded by bullish momentum during the first half of the day and reached a daily high near 105.6 level in the early US session, but then lost its bullish traction to surrender some of its daily gains. The safe-haven greenback continued to find demand amid escalating fears about a global recession, as the dismal US manufacturing PMI fueled recession-related concerns.

GBP/USD tumbled with a 0.70% loss on Friday amid the stronger US dollar across the board. The flight to safety increased the appetite for safe-haven assets and weighed on the GBP/USD pair. The cable remained under bearish pressure and dropped to a monthly low below the 1.199 mark, but then regained some upside traction to recover its daily losses. Meanwhile, EUR/USD slumped to the lowest level since June 15th below 1.038 level. The pair was down almost 0.50% for the day.

Gold rebounded back slightly after touching a daily low below $1786 in the late European session, as the US yields collapsed and provided support to the precious metal amid fears of a recession. Meanwhile, WTI oil climbed back to the $109 area despite the escalating recession fears that have overshadowed the supply worries again.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD traded 0.54% lower over the last trading day of the week. The Eurozone HICP, the harmonised index of consumer prices, jumped to 86% in May, coming in higher than the 8.3% expectations. Despite the ECB’s efforts to tame inflation, prices are still growing at a pace that threatens price stability. The U.S. Greenback continues to be on the rise as market sentiment continues to be risk-averse and the U.S. equity market continues to fall further into bear territory. U.S. PMI data came in at 52.7, compared to estimates of 52.4, showing growth in purchasing and still signs of a healthy economy.

On the technical side, EURUSD was able to recover from our previously estimated support level of 1.0382 despite falling below this level briefly. A new level of resistance has formed around the 1.0485 price region. RSI for the pair sits at 41.02, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.0485, 1.05754

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD lost 0.68% on the last trading day of the week. The pair gave up gains from the previous day as demand for the U.S. Greenback resumed. The dollar index, which measures the U.S. Dollar against a basket of other major foreign currencies, gained 0.36% to close the week in the green. The U.S. PMI data, which was released during the American trading session, provided fresh optimism for the U.S. Dollar as the figure came in better than expected.

On the technical side, GBPUSD successfully defended our previously estimated support level of 1.20824, despite the pair trading below that level for a brief period during the late European trading session. RSI for Cable sits at 38.1, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated a further 0.31% for the last trading day of the week. After touching a 24-year high on the 29th, USDJPY has been on a two-day short-term correction. However, as the U.S. reported better than expected PMI figures, demand for the U.S. Greenback returned towards the end of the American trading session. Carry trade opportunities continue to exist between these two currencies and are expected to increase as the better PMI provides more confidence for the Fed to hike interest rates by the next FOMC meeting.

On the technical side, USDJPY retreated from our previously estimated resistance level of 136.57 and successfully defended our estimated support level at 134.6. RSI for USDJPY sits at 58.39, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

US stock markets fell on Thursday as the S&P 500 capped its worst first half of the year in more than 50 years. The Dow Jones Industrial Average slid 0.8% and the tech-heavy Nasdaq Composite dropped 1.3%. And the S&P 500 was down 0.9% at the end of the day. Now, the market seems to be forced to adjust back to reality after the unprecedented pandemic and unprecedented monetary policy.

US natural gas future contract plummeted 16%, the worst performance in more than three years. The plunge came after an inventory report showed a larger–than–expected storage build, thus the market rose the concerned over an oversupplied market.

Cryptocurrency exchange FTX is closing a deal to buy struggling cryptocurrency lender BlockFi for $25 million in a fire sale, well below BlockFi’s last valuation. The deal came after FTX provided a $250 million emergency credit to BlockFi. The fallout for BlockFi, a crypto lending company, happened following the major sell-off and the major plunge of crypto assets. Funds have struggled with liquidity issues as counterparties fail to maintain and meet margin calls.

Main Pairs Movement

WTI price plunged 3.44% on Thursday following the news that OPEC+ decided to stick with the planned oil production hike. The Middle East will increase monthly production to 648,000 barrels per day in August with the original plan.

AUD/USD edged 0.40% higher and closed with 0.69013. The Australian dollar out- weighted against the greenback following the concerns that a more aggressive move by major central banks might pose challenges to global economic growth.

EUR/USD advanced 0.43% and finished at 1.04836 at the end of the day. The advance came as Fed Chairman Jerome Powell clarified that the more significant mistake would be to fail to restore price stability.

Gold remained bearish, dropping 0.58%, to $1,807 on Thursday. During the ECB forum, Jerome Powell mentioned that the US economy is well-positioned while imposing more tightening policies in response to inflation. The factor has held back the bets on gold, deteriorating the demand for the precious metal, gold.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD gained 0.34% over the previous trading day. The U.S. PCE figures came in at 0.3%, below estimates of 0.4%; however, year over year PCE came in at 4.7%, in line with the Fed’s expectations. During Fed Chair Jerome Powell’s speech, he stated that price stability would still be the priority of the Fed, but it would be a mistake if the central bank sacrificed the economy to achieve price stability. On the other hand, ECB president Lagarde’s speech did not shed much light on the central bank’s intentions regarding interest rates shortly. On the economic docket, manufacturing PMI from Germany and the U.S. will be released today during the European trading session and the American trading session, respectively.

On the technical side, EURUSD rebounded from our previously estimated support level of 1.038 and is heading up towards 1.0494, which was previously a support level but has since changed polarity and is acting as a short-term resistance level. RSI for EURUSD sits at 43.69, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD gained 0.48% over the previous trading day. The broad-based U.S. Greenback allowed the British Pound to rise against the Dollar. During Governor Andrew Bailey’s speech at the ECB’s annual forum on central banking, he stated that the U.K. is currently being hit with a large income shock that could hurt the overall U.K. economy. The BoE continues to be stuck between raising interest rates and slowing the economy as the country faces a different situation than the U.S., where the economy still seems to be healthy. PMI figures from the U.S. will be released during the American trading session tomorrow.

On the technical side, GBPUSD has consolidated around our previously estimated support level of 1.2123 and successfully found demand to trade higher. Resistance at 1.2381 remains unchallenged. RSI for Cable sits at 41.17, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated 0.68% over the previous trading day. The retreating Dollar snapped a four-day winning streak for USDJPY. During his speech at the ECB forum, Fed chair Jerome Powell reaffirmed the healthiness of the U.S. economy and reiterated the central bank’s commitment to trimming inflation with interest rate hikes. The near-term decrease of the USDJPY will not be sustained as the Fed and the BoJ continues to adopt diverging monetary policies that will increase the interest rate difference between the two countries.

On the technical side, USDJPY has retreated from our previously estimated resistance level of 136.57, but the pair remains firmly on an upward trajectory. The support level at 134.6 remains unchallenged. RSI for USDJPY sits at 61.13, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data