Daily Market Analysis By zForex

[zForex]

"Asia-Pacific Markets Rise on Softer US Inflation Data, Global Stocks Gain Amid Signs of Inflation Slowdown"​

Asia-Pacific markets experienced gains on Friday as new inflation data from the U.S. turned out to be softer than expected. This development has raised optimism that inflation may decrease without negatively impacting the labor market. Globally, stocks rose throughout the week due to the lower-than-expected U.S. consumer price index and producer price index, signaling a significant deceleration in inflation within the world's largest economy.
In June, the U.S. producer price index increased by a smaller margin than predicted, rising 0.1% year on year. The core PPI, which excludes volatile food and energy prices, also climbed by 0.1%, falling short of expectations.
Christopher Waller, a Governor of the Federal Reserve Board, expressed the belief that two more interest rate hikes are necessary to bring inflation down to the desired level. During a speaking engagement at New York University, he welcomed the recent reading of the consumer price index, which indicated a moderation in the inflation rate. However, he emphasized the importance of sustained improvement before expressing confidence in the deceleration of inflation.
The International Monetary Fund stated that China's growth is slowing due to weakened private investment, declining exports, and reduced domestic demand.
The Reserve Bank of Australia announced on Friday that Michele Bullock, the deputy governor, has been appointed as the new chief of the central bank, as revealed by the country's Treasury.
Investors have also been evaluating data from the U.K. this week. Wage growth in the country has been significant, raising concerns for the Bank of England as it grapples with the highest inflation among the Group of Seven nations. Meanwhile, the economy experienced a 0.1% contraction in May, slightly better than the consensus estimate of a 0.2% contraction.
​

EURUSD

The US Dollar (USD) has continued its downward trend for the seventh consecutive day, driven by expectations of the Federal Reserve (Fed) soon concluding its policy-tightening measures. Investors are now strongly convinced that the US central bank will maintain interest rates at their current level for the remainder of the year, following the anticipated 25 basis points increase in July. This has resulted in a significant drop in US Treasury bond yields and has pushed the USD to a 15-month low. Consequently, this decline is considered a significant factor contributing to the strength of the EUR/USD pair.

In contrast, the minutes of the June meeting held by the European Central Bank (ECB) revealed that policymakers are determined to continue raising interest rates beyond July in order to address inflation and bring it back to the target level. It is worth noting that the ECB's economic projections in June indicated that inflation is expected to remain above the 2% target until the end of 2025. Despite emerging signs of an economic slowdown, this hawkish stance continues to bolster the euro (EUR) and provide additional strength to the EUR/USD pair.

The EUR/USD maintained its bullish momentum, reaching the 1.1245 level, which coincides with the upper parallel of the current bullish channel. The second leg of the movement is currently hovering around 3.70%, slightly higher than the previous leg's 3.50%. After this rapid bullish movement, a correction toward the 1.1100 level appears likely.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1200	1.1150	1.1100	1.1000	1.0920	1.0880

The US Dollar (USD) remains under selling pressure, resulting in a 15-month low, as the market anticipates the Federal Reserve (Fed) concluding its policy tightening cycle. On the other hand, the British Pound (GBP) gains support amid speculation of further interest rate hikes by the Bank of England (BoE) to tackle inflation. This supports the GBP/USD pair's upward trend. Market sentiment indicates that the Fed will keep interest rates steady after an anticipated increase in July, while the BoE may raise rates to control demand and lower inflation. Economic data and consumer sentiment will influence the currency pair, but overall, the GBP/USD pair is set for strong gains and looks to end the week positively for the second consecutive time.
Similar to other major currency pairs, the GBP/USD faced resistance at 1.3150 after surpassing the significant level of 1.3000. A correction towards 1.3000 appears to be more likely. The next long-term resistance level is 1.3210, and additionally, we observe the 200MA on the weekly chart, where a candle closing above it is needed to confirm further upward movement.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2650	1.2540	1.2460

The Japanese Yen received a boost from a couple of developments in Japan. Firstly, there was a media report indicating that the Bank of Japan is likely to revise its inflation forecast for FY2023 to a level above 2% during the meeting scheduled for July 27 and 28. Until now, the Bank has consistently maintained its stance that the Consumer Price Index (CPI) would decline from around September/October this year. However, if this expectation is revised to a level above the 2% target, it would undermine one of the pillars supporting the continuation of ultra-loose monetary policy.​

Additionally, during the session, Bloomberg conducted an interview with Hideo Hayakawa, a former chief economist and director at the Bank of Japan. Hayakawa expressed his anticipation that the Bank of Japan's policy board "will make some kind of adjustment to YCC this month," suggesting that adjusting the yield control by setting the tolerance band for the 10-year yield from 0.5% on either side of zero to 1% is a likely approach.

Shifting the focus to central banks, Federal Reserve Board Governor Christopher Waller addressed his economic and policy outlook during a speech before the Money Marketeers of New York University in the evening, Eastern time. Please refer to the previous posts for his specific remarks, but notably, Waller mentioned that the upcoming September Federal Open Market Committee (FOMC) meeting is significant. However, he also highlighted that if the next two Consumer Price Index (CPI) readings resemble the previous two, the data would suggest a possible halt to certain actions.

The USD/JPY pair has received support at the notable historical level of 138.00 after experiencing six consecutive days of decline. Currently, a corrective movement is underway, with the initial level located at 138.70, followed by 140.25. Additionally, both the 2-year and 10-year yields are undergoing corrections, which appears to be beneficial for the pair as well.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

Despite the release of the soft inflation and Producer Price Index (PPI) report for June, the precious metal has been unable to take advantage of the situation, indicating that household demand remains subdued and the path towards achieving the 2% inflation target remains intact.

Although the US Dollar Index (DXY) has experienced a significant decline, gold prices are struggling to recover. The DXY has dropped below the psychological level of 100.00 and is currently hovering around 99.65. The anticipation of only one interest rate hike announcement from the Federal Reserve (Fed) by the end of the year has caused a sharp decline in the USD Index.

Contrary to investors' expectations, Fed Governor Christopher Waller expressed confidence in the need for two additional interest rate hikes this year to curb inflation and bring it down to 2%. Waller's hawkish comments have contributed to a rise in US Treasury yields, with the yield on 10-year US Treasury bonds reaching approximately 3.77%.

Gold found strong resistance at the 1960 and formed a bearish pattern that may lead to a temporary correction toward the 1940. Gold is still bullish and may continue toward the next resistance of 1970 and followed by the 1980. But a first correction seems needed.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904

DAX40

European shares experienced a slight decline on Friday, although they were still on track to achieve their largest weekly percentage increase in more than three months. This optimistic outlook was fueled by expectations that the Federal Reserve would soon cease its interest rate hikes due to the alleviation of inflationary pressures.
Earlier this week, data regarding consumer and producer prices in the United States sparked speculation that the economy was entering a phase of disinflation, leading to the possibility of the Fed pausing its tightening measures shortly after July.
As the earnings season commences, luxury British retailer Burberry announced a notable 18% growth in sales revenue for the quarter ending on July 1.
The DAX faces a significant challenge of surpassing the 16,400 level. In the short term, the DAX remains bullish due to the prevailing risk-on sentiment in the markets, but Q2 earnings are awaited to confirm whether or not there will be more momentum.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16600	16370	15650	15400	15200

 

[zForex]

Stocks Rise as Earnings Surpass Expectations, Oil Faces Disruptions and Bitcoin Reaches New Highs

US INDICES:

The S&P 500 futures saw a gain of 0.1%, while Nasdaq-100 futures experienced a slight increase of less than 0.1%. JPMorgan Chase saw a rise of over 2% in premarket trading after surpassing expectations with their earnings. The bank capitalized on higher interest rates and increased interest income. Additionally, Wells Fargo also rose over 3% in premarket trading, driven by better-than-expected earnings.
UnitedHealth shares climbed over 2% following the insurance giant's report of better-than-expected earnings and revenue. The company also raised the lower end of its full-year earnings guidance. Similarly, BlackRock experienced a rise of over 1% due to a significantly better-than-expected profit.
According to FactSet, analysts are anticipating a downturn this season, with a projected year-over-year decline of approximately 7% in S&P 500 earnings. If this materializes, it will represent the weakest earnings season since the second quarter of 2020 when S&P 500 profits plummeted by 31.6%.
Traders will also closely monitor the release of June import prices and the preliminary July results from the latest University of Michigan consumer sentiment report.
The breakout of the Nasdaq above the 15,200 level, fueled by improved sentiment, suggests that the next target could be around 15,800. The second-quarter earnings results and the growing confidence in AI as a new revenue source for technology companies and the economy as a whole might further support the Nasdaq's ascent to new highs.
​

USOIL:

On Thursday, several oilfields in Libya were shut down due to a protest by a local tribe following the kidnapping of a former minister. Additionally, Shell temporarily suspended loadings of Nigeria's Forcados crude oil due to a potential leak at a terminal. The disruption in Libya has halted the production of an estimated 370,000 barrels per day (bpd), while the Nigerian outage is expected to result in a loss of 225,000 bpd.
The price of WTI (West Texas Intermediate) has recently broken out above the resistance level at 72, indicating a potential shift in the oil market's direction. This breakout comes after a period of consolidation between 62 and 72 over the past two months. Presently, oil is encountering a resistance level of 76.00, and there is a chance of a correction, leading to a possible pullback towards 74.30.
Furthermore, Russian oil exports have significantly decreased. If this downward trend continues into the following week, it could potentially drive prices higher. Notably, Russian oil exports are expected to be reduced by 500,000 bpd in August.
Supporting the price of oil, the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) released reports on Thursday, predicting a recovery in oil demand during the second half of the year, particularly in China, despite broader macroeconomic challenges.
In addition, Saudi Arabia and Russia, the world's largest oil exporters, have agreed this month to further deepen oil production cuts that have been in place since November last year, providing additional support to crude prices.
Oil reached a level of 77.25, where the 200-day moving average (200MA) acted as a resistance level, similar to the previous occurrence. This suggests that a correction back toward 74.20 is a possibility.
​

Crypto:

While the crypto market is experiencing positive effects from the recently announced outcome of the Ripple-SEC case, resulting in a surge in the Ripple-affiliated XRP token, the leading cryptocurrency Bitcoin has also reached a new price high that has not been witnessed since last year. Bitcoin's price suddenly increased by 4.45%, reaching the $31,636 level, which had not been seen since June 1 of the previous year.
This significant surge in price was triggered not only by Ripple's partial victory over the SEC in court but also by the resumption of XRP trading on major exchanges, including Kraken, Bitstamp, Coinbase, and Crypto.com, one after another.
Currently, BTC reached a new level at 31800. Traders are closely monitoring the weekly chart, particularly looking for a breakout above the 100-day moving average (100MA). In the case of a breakout, it could potentially push the price toward the initial resistance level of 36,000.​

 

[zForex]

"Global Markets Respond to Lower Inflation and Speculations on Federal Reserve's Approach, while Asia-Pacific Markets React to China's GDP Miss"

The global markets experienced a boost from lower-than-expected inflation figures in the United States, alongside growing speculation of a less aggressive approach by the Federal Reserve in the future.
In Asia-Pacific, market performance on Monday was negative as investors analyzed important economic data from China. China's gross domestic product (GDP) for the second quarter grew by 6.3% compared to the previous year, falling short of the 7.3% forecast by analysts surveyed by Reuters.
The second quarter's GDP growth rate of 6.3% signifies a slower pace of expansion in comparison to the 2.2% growth recorded in the first three months of the year.
Additionally, the unemployment rate for young individuals aged 16 to 24 reached a new record of 21.3% in June.
Significantly, China, the world's second-largest economy, reported a second-quarter GDP growth of 6.3%, which was lower than economists' expectations. Furthermore, the People's Bank of China maintained its medium-term loan rates at 2.65% after providing 103 billion yuan ($14.43 billion) of one-year medium-term lending facility loans at that rate.
The upcoming week will witness a rise in earnings announcements, featuring results from Novartis, Ocado, and ASML in Europe, alongside major U.S. companies like Bank of America, Morgan Stanley, Tesla, Netflix, United Airlines, and IBM.
According to the International Monetary Fund, headline inflation appears to have reached its peak among the group of 20 nations. However, core inflation, particularly in advanced economies, remains significantly higher than the targets set by central banks.




EURUSD

The euro has gained significant strength due to the European Central Bank (ECB) expected to continue raising interest rates beyond July, as inflation in the Eurozone remains high. Headline inflation in the region currently stands at 5.5%, while core inflation, which excludes volatile oil and food prices, is at 5.4%. These figures are significantly higher than the desired rate of 2%.

The USD Index is anticipated to show strong movement following the release of the US Retail Sales data. According to consensus forecasts, monthly retail demand is expected to grow at a faster pace of 0.5% compared to the previous release of 0.3%. Retail demand, excluding automobiles, is projected to expand by 0.3%, an improvement from the previous release of 0.1%.

The EUR/USD encountered resistance near the upper boundary of the existing bullish channel at the 1.1250 level. There is a potential for a correction to occur, which could cause the price to move towards the 1.1150 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1200	1.1150	1.1100	1.1000	1.0920	1.0880

GBPUSD

Investors are directing their attention toward the upcoming release of the United Kingdom Consumer Price Index (CPI) data, scheduled for Wednesday at 06:00 GMT. The GBP/USD pair has received some support as investors are optimistic about the possibility of sustained high core inflation. They anticipate that this would compel the Bank of England (BoE) to continue its aggressive policy tightening measures in order to bring inflation back to desired levels.

However, as the central bank of the United Kingdom would have no choice but to raise interest rates further, households will have to face the consequences of increased borrowing costs and the impact of high inflation. Not only will this burden affect big-ticket purchases, but it will also extend to the housing sector. The corporate sector in the UK is expressing concerns, as they believe that the previous surge in business optimism observed during the spring has diminished due to the weight of inflation and rising interest rates.

The GBP/USD is undergoing a correction following its rise to the 1.3140 level, which corresponds to the upper boundary of the current bullish channel. It is more likely that the price will retrace towards the 1.3000 level, which is expected to act as new support.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2650	1.2540	1.2460

USDJPY

There is a lack of economic indicators from Japan that could affect the monetary policy stance of the Bank of Japan, which remains extremely accommodative.

However, the focus will be on economic indicators from China, including Q2 GDP, industrial production, and retail sales, as they will set the tone for market sentiment. So far, the markets have not shown a flight-to-safety response, as expectations of a stimulus package from Beijing have mitigated the impact of weak Chinese data.

If the GDP and industrial production figures turn out to be notably weak, it could raise doubts about Beijing's ability to provide adequate support to its economy.

Additionally, the NY Empire State Manufacturing data for July will be closely monitored, but unless there is a significant decline, it is unlikely to have a notable impact on market risk sentiment.

The USD/JPY pair has received support at the notable historical level of 138.00 after experiencing six consecutive days of decline. Currently, a corrective movement is underway, with the initial level located at 138.70, followed by 140.25. Additionally, both the 2-year and 10-year yields are undergoing corrections, which appears to be beneficial for the pair as well.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

The focus is on the positive US inflation data released on Friday and concerns surrounding China, which are receiving significant attention. These factors, along with the market's anticipation of a 0.25% increase in benchmark interest rates at July's Federal Open Market Committee (FOMC) monetary policy meeting, are exerting downward pressure on the gold price.

It's important to note that the two-week silence period for Fed officials ahead of the FOMC meeting allows the US Dollar to recover and weigh on the gold price recently. Additionally, comments from the International Monetary Fund (IMF) suggest inflation concerns are also impacting the XAU/USD price, despite a lackluster session and the US Dollar's inability to remain strong.

Looking ahead, the XAU/USD traders face a light economic calendar, particularly during the pre-Fed silence period of policymakers. However, the NY Empire State Manufacturing Index for June on Monday and US Retail Sales for the same month on Wednesday will be significant events to monitor for clearer market directions. Overall, risk-related catalysts will play a crucial role in determining the near-term trajectory of the gold price.

Gold found strong resistance at 1960 and formed a bearish pattern that may lead to a temporary correction toward the 1940. Gold is still bullish and may continue toward the next resistance of 1970 and followed by 1980. However, it appears that an initial correction is necessary.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904

DAX40

On Monday, European shares experienced a decline due to the slump in luxury group Richemont, which reported weaker-than-expected organic sales growth. Moreover, concerns arose about the demand from China, the world's second-largest economy, as its economic growth showed lackluster performance.

The personal and household goods index (.SXQP), which includes luxury companies, suffered the most significant sectoral losses, declining by 2.2%.
Adding to the negative sentiment, data indicated that China's economy expanded at a fragile rate in the second quarter, primarily due to weakened demand. This development increases the pressure on policymakers to implement additional stimulus measures.

The DAX faces a significant challenge of surpassing the 16,400 level. In the short term, the DAX remains bullish due to the prevailing risk-on sentiment in the markets, but Q2 earnings are awaited to confirm whether or not there will be more momentum.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16600	16370	15650	15400	15200

 

[zForex]

EURUSD

The Census Bureau is scheduled to release retail sales data in the United States (US) on Tuesday, July 18th. Economists anticipate that the headline Retail Sales figure for June will demonstrate another increase, building on the unexpected rise observed in May. It is worth noting that the Retail Sales data is adjusted for seasonality but does not account for inflation.

The US Retail Sales report has the potential to significantly impact the expectations for the Fed's interest rates, which, in turn, can affect the valuation of the US Dollar. This impact is particularly significant this week, as there is a lack of high-impact US economic data, and the Fed's 'blackout period' has commenced prior to the July 25-26 FOMC meeting.

Economists predict that auto sales will contribute to the overall increase in retail volume last month. Additionally, the rapid growth in sales at bars and restaurants is expected to bolster the headline retail sales figure. However, there is a downside risk posed by slowing fuel sales.

The EUR/USD is currently attempting to either correct or break out beyond the 1.1250 level in order to advance towards the next target of 1.1300.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1200	1.1500	1.1000

Inflation has remained stubbornly high, boosting expectations of higher for longer UK rates. BOE has responded by maintaining its aggressive stance on interest rates, hiking by more than expected in June, taking rates to the highest level since 2008. The market is pricing rates rising above 6% from the current 5%.

Wednesday will see the release of U.K. inflation figures, as the Bank of England prepares for its latest monetary policy meeting on Aug. 1. A second consecutive 50 basis point hike remains a possibility after strong wage growth in the three months to May.
The GBP/USD is continuing the correction toward the 1.3000 support level. The correction is needed before continuing up if the Wednesday data came higher to help the pair reach the 1.3200 level.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2650	1.2540	1.2460

The recent weakness in the risk-barometer pair reflects the cautious optimism prevailing in the markets as concerns over the US-China conflict diminish following Washington's efforts to rebuild relations through frequent visits to Beijing. Moreover, traders of the USD/JPY pair are influenced by mixed concerns regarding the future actions of global central banks, particularly with the impending possibility of a Fed rate hike in July.

It is important to highlight that policymakers at the Bank of Japan (BoJ) continue to advocate for maintaining the accommodative monetary policy, despite market expectations of an eventual shift away from ultra-low interest rates and a moderation of the Yield Curve Control (YCC) policy.
The performance of yields has a significant impact on the USD/JPY pair, and currently, with the ongoing selling of US yields, we are observing increasing pressure on the pair. Breaking the support level at 137.7 is crucial for further downward movement.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

Gold price (XAU/USD) is experiencing positive momentum as traders reevaluate their previous concerns regarding China, leading to a return of the risk-on mood. The weakness in the US Dollar, following unimpressive data and the inability to sustain Friday's recovery, further strengthens both market sentiment and the XAU/USD price. As a result, buyers of gold are preparing for a battle to reclaim the significant $2,000 level.

In addition to recent catalysts indicating China's capability to support economic growth, headlines suggesting improved US-China relations contribute to the market's cautious optimism. Meanwhile, despite the US NY Empire State Manufacturing Index falling short of expectations, which was in contrast to positive consumer-oriented figures from Friday, it failed to boost the US Dollar.

Furthermore, the anticipation of additional stimulus measures from China and the challenges faced by restrictive monetary policies also supports a more robust gold price.

Looking ahead, the upcoming US Retail Sales and Industrial Production data for June will play a crucial role in determining the trajectory of the Federal Reserve's rate hike beyond July and will offer insights into potential movements in the gold price.

Gold is currently hovering around the 1960 area, awaiting a clear direction. Yesterday, there was an attempt to retreat to the 1940 level, which ultimately failed. As yields continue to decline, gold is recovering and a potential breakout above the current resistance level in 1962 could pave the way towards the 1970 and 1980 levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904

European futures are showing little change this morning, following a decline in Asian stocks due to weak Chinese economic data and a lack of stimulus, which have dampened market sentiment. Investors are eagerly awaiting U.S. retail sales figures to gain insights into the Federal Reserve's policy outlook. It's worth noting that the Fed, European Central Bank, and Bank of Japan will conduct policy reviews next week.

Additionally, market participants are closely monitoring the upcoming quarterly results this week, particularly from major U.S. banks such as Bank of America, Morgan Stanley, and Goldman Sachs, as they provide valuable information about the financial sector. Tesla's earnings report later this week is also drawing attention.

The DAX came back toward the 16,200 level. In the short term, the DAX maintains a bullish stance due to the prevalent risk-on sentiment in the markets. However, confirmation of further momentum awaits Q2 earnings results.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16600	16370	15650	15400	15200

 

[zForex]

Slight Declines in S&P 500 and Nasdaq Futures, Strong Earnings Reports, Crude Oil Market Tightens, Bitcoin's Range-Bound Price Action
US INDICES:


S&P 500 futures and Nasdaq-100 futures experienced slight declines. Bank of America announced second-quarter earnings that surpassed expectations, attributed to higher interest rates. Additionally, Bank of N.Y. Mellon also exceeded earnings expectations, resulting in a more than 1% increase in its stock price. On the other hand, PNC Financial reported mixed second-quarter numbers, causing its stock to drop by over 2%.
J.B. Hunt is scheduled to release its earnings report later today. The ongoing earnings season has had a strong start, with approximately 82% of the reported S&P 500 companies surpassing profit estimates, according to FactSet.
As inflation data in recent times supports the notion of a soft-landing scenario for many investors, stocks have continued their rally this year. However, some skepticism remains.
The Nasdaq once again reached 15,720, nearing the resistance level around 15,800, aligning with the upper parallel of the current daily bullish channel. It has now entered the final phase of its climb towards the 16,800 level, last witnessed in November 2022.






USOIL:


After the disruption caused by protests at Libyan oil fields, production has now resumed. However, the market is tightening due to reduced exports from Saudi Arabia and Russia, as reported by the bank. Russian crude shipments have dropped by 25% in the first four weeks of July, while Saudi Arabia has raised the official selling prices for its crude and cut production by 1 million b/d, resulting in a decline of 400,000 b/d in exports during the first half of the month.
The National Bank of Canada indicates a shifting sentiment in favor of crude oil, driven by expected draws in crude and petroleum product inventories, operational and political disruptions in Africa, and a clearer understanding of the impact and timing of production cuts. While the bank anticipates a relatively weaker second quarter, it acknowledges that this sentiment is already reflected in the consensus. Looking ahead to the second half of the year, the National Bank maintains a positive outlook and identifies opportunities for relative outperformance.
WTI crude oil reached a price level of 77.25, encountering resistance from the 200-day moving average (200MA) on the daily chart. Subsequently, there was a correction towards the support level of 74.00. It is important to note that the 74.00 level had previously served as resistance on multiple occasions in the past three months.








Crypto:


While the stock market has been on an upward trend recently, with gains seen in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, the cryptocurrency market has experienced a lack of momentum, failing to keep up with the positive catalysts of late.
In June, Bitcoin witnessed a surge above $30,000 following new applications for spot Bitcoin exchange-traded funds and a favorable outcome in a significant court case involving Ripple and the Securities and Exchange Commission, which provided a boost to the market.
The U.S. Securities and Exchange Commission (SEC) has now officially recognized another proposal for a Bitcoin Exchange-Traded Fund (ETF), signaling a positive outlook for Bitcoin. Valkyrie's Bitcoin ETF is the latest proposal to gain acknowledgment, joining a series of recent applications. Notably, Valkyrie stands out as the only applicant in this round to have chosen a ticker symbol for their ETF: BRRR.
Currently, Bitcoin (BTC) is experiencing a range-bound price action formation, with the resistance level at 31,800 and the support level at 29,900. Traders are paying close attention to the weekly chart, specifically watching for a potential breakout above the 100-day moving average (100MA). A successful breakout above this level has the potential to drive the price toward the initial resistance at 36,000.

 

[zForex]

Japan Surprises with Trade Surplus, China Maintains Rates, Property Sector Sees Respite

Asia-Pacific markets were mixed on Thursday as investors digested a slew of economic data across the region.
Japan’s Nikkei 225 was down 0.97%, while the Topix was 0.5% lower as the country posted a surprise trade surplus of 43 billion yen ($308 million), its first surplus in 23 months.
China kept its one and five-year loan prime rates unchanged, days after China’s second quarter GDP came in below expectations. China’s major state-owned banks were seen selling dollars to buy yuan in the offshore spot market in early trades on Thursday.
China’s efforts to revive growth, from cutting rates to closing out a regulatory crackdown on tech firms, have so far done little to support growth in the world’s second-largest economy. However, some relief surfaced for the property sector as Chinese authorities reportedly considered easing home buying restrictions in major cities, leading to a rise in shares of developers.
Australia’s seasonally adjusted unemployment rate remained unchanged at 3.5% in June, slightly lower than the 3.6% expected by economists polled by Reuters.
European markets are set for a muted open on Thursday as investors assess the implications of some big U.S. corporate results and the start of earnings season at home.
German producer prices rose by 0.1% year on year in June, the federal statistics office said Thursday, slightly exceeding analyst expectations of no annual change.
Today, economic data for the US will be released, including the Initial Jobless Claims and the Philadelphia Fed Manufacturing PMI.​

EURUSD

The German producer prices recorded a year-on-year increase of 0.1% in June, according to the Federal Statistical Office's report on Thursday. This figure slightly exceeded the expectations of analysts, who were anticipating no change in annual prices. Additionally, recent data on CPI for the EU, as well as Germany, indicates that inflation remains persistent, particularly in the core measure, which rose to 5.5% in June from 5.3% in May. As a result, the ECB will likely implement another rate increase in its upcoming meeting.
Yesterday's reports on both building permits and housing starts in the US for June fell below expectations, raising concerns about a possible slowdown in the housing market. Moreover, today's release of the Philadelphia Fed Manufacturing Index and Initial Jobless Claims will provide insights into the current state of the labor market, which appears to be steady, and the manufacturing activity, which seems to be showing signs of slowing down.
The EUR/USD has shown a concentration of price and formed a bearish pattern, signaling a potential correction. The target for this correction is expected to be the 1.1150 level, followed by the 1.1100 level. Additionally, on the daily chart, we can observe 3 Dojis, further confirming the likelihood of a correction.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1200	1.1500	1.1000

GBPUSD

In the UK, the Consumer Price Index (CPI) rose slightly below expectations, indicating softer inflation. This could influence the Bank of England (BoE) to consider a smaller rate hike in the upcoming policy meeting. In the US, Housing Starts declined in June, and Building permits also saw a drop, leading to speculations that the Federal Reserve (Fed) might adopt a more dovish policy stance. Investors are closely watching upcoming data, including Unemployment Claims and Retail Sales in the US, as well as Flash Manufacturing and Services PMI figures from both countries, which will impact the GBP/USD pair's direction.
The GBP/USD is continuing its correction towards the 1.2850 support level. A first rejection of this level has occurred, and a breakout may lead the price toward the next target of 1.2750.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2850	1.2750	1.2650

USDJPY

The Japanese government has recently announced a downward revision of the growth forecasts for the Asian major's Financial Year (FY) 2023-24. According to policymakers in Tokyo, they now anticipate the FY 2023-24 growth to be 1.3%, as opposed to the previously expected 1.5%.
On a different note, Japan's trade figures for June revealed a positive Merchandise Trade Balance Total, despite a decrease in Imports and encouraging figures for Exports.
In addition, Japan's Prime Minister (PM) Fumio Kishida has defended the Bank of Japan (BoJ) against dovish concerns by expressing readiness to create a society where wage hikes become the norm.
It's noteworthy that the US Treasury bond yields reflect mixed concerns about the Federal Reserve (Fed), even with the widely expected July rate hike.
USDJPY is undergoing a correction, similar to other major currency pairs. It has tested the 137.7 level twice, forming a double bottom pattern. The next resistance levels to watch for are approximately 140.225 and 141.50.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

The markets have recently adjusted their expectations, and now it appears that the possibility of further interest rate hikes by the Federal Reserve (Fed) is being priced out. This shift in sentiment follows the expected 25 basis points (bps) increase in July and is a response to a decrease in inflationary pressures. Investors now believe that the Fed is approaching the end of its current policy tightening, which has contributed to a significant decline in US Treasury bond yields and continues to be a challenge for the value of the Greenback. Adding to the situation are concerns about a potential global economic slowdown, deteriorating US-China relations, and geopolitical tensions. These factors are providing additional support to the safe-haven gold price, as investors seek a stable store of value during uncertain times.
Furthermore, there are indications that the European Central Bank (ECB) may signal a victory in its battle against inflation and potentially pause its rate-hiking cycle. This development also seems to be beneficial for the price of gold, as the metal does not yield interest but gains appeal when other safe assets become less attractive due to lower interest rates.
Gold came back towards 1970, then proceeded to move higher towards 1988. However, the price action now suggests a higher probability of a price concentration for a potential correction towards 1964. The bullish trend is also currently testing the upper parallel of the channel.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904

DAX40

European stocks are set to open on a subdued note on Thursday as traders sift through a mixed bag of earnings reports. The focus will be on the Frankfurt-listed shares of prominent U.S. companies, Netflix and Tesla, which have experienced declines of 3.7% and 8.3%, respectively, following their latest quarterly earnings announcements.
Tesla's CEO, Elon Musk, hinted at potential price cuts, which had a negative impact on the company's shares. On the other hand, Netflix reported impressive results, adding 5.9 million new streaming customers between April and June, and surpassing earnings expectations. However, traders remain concerned about the company's revenue and a weaker-than-anticipated Q3 revenue forecast.
Additionally, European investors will closely monitor the semiconductor sector at the market's opening, particularly after Dutch semiconductor equipment manufacturer ASML reported better-than-expected second-quarter earnings on Wednesday and raised its full-year sales outlook.
Overall, the market sentiment is cautious due to the mixed earnings reports, and all eyes are on the performance of these key companies as the trading day begins.
The DAX came back toward the 16,200 level. In the short term, the DAX remains bullish due to the prevailing risk-on sentiment in the markets, Q2 earnings started positive and better than expected which may help the DAX reach the last high at 16400.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16600	16370	15650	15400	15200

 

[zForex]

Nasdaq Rally Pauses, Oil Remains Stable Amidst Supply Concerns, and Crypto Insights from ARK Invest and NYDIG
US INDICES:


On Thursday, both the S&P 500 and Nasdaq futures experienced declines. Netflix Inc. faced its most significant intraday drop since December due to missed sales estimates and a third-quarter revenue projection that fell short of Wall Street's expectations. Similarly, Tesla Inc. also saw a decrease in profitability during the second quarter, indicating a squeeze on the electric-vehicle maker's margins.
The remarkable rally in the tech-heavy Nasdaq, which surged 45% this year, surpassing the S&P 500's 19% increase, seems to have hit a pause. This rally was fueled by enthusiasm over the potential for artificial intelligence.
IBM (IBM.N), a provider of enterprise software, experienced a 0.6% slip after its second-quarter revenue failed to meet Wall Street's expectations. The decline was mainly driven by reduced sales of its mainframe computers as businesses cut back on tech spending.
The U.S.-listed shares of Taiwanese chipmaker TSMC also dropped by -2.2% after warning of a projected 10% sales decrease in 2023.
According to Refinitiv data from Wednesday, overall earnings across various industries are expected to decline by 8.2% for the second quarter.
There are concerns about a potential U.S. recession this year, primarily due to central banks tightening policy and constricting economies until inflation returns to their 2% targets.
The Nasdaq is rebounding from the target of 15,800 and consistently testing the upper boundary of the current bullish channel on a daily basis. The price action of the Nasdaq on the 4-hour chart suggests a potential correction towards the support level at 15,250.

USOIL:


Despite the impact of a stronger US dollar and a bullish inventory report suggesting strong demand, the price of crude oil remained stable. The US dollar's recovery dampened investor sentiment, which was triggered by a bond rally due to lower-than-expected UK inflation.
On the other hand, the US Energy Information Administration reported a decline of 708,000 barrels in US crude stockpiles compared to the previous week. Notably, at the pricing point for WTI in Cushing, inventories fell by 2.9 million barrels, the largest drop since October 2021, as reported by the EIA. Additionally, the implied demand for all oil products also increased during the reported week.
Furthermore, there are noticeable signs of supply cuts from the Organization of the Petroleum Exporting Countries (OPEC), with Russia's crude shipments dropping to a six-month low in the four weeks leading up to July 16.
WTI crude oil is currently holding near the lower boundary of the existing bullish channel. Breaking through the 77-resistance level remains a challenge for WTI as it aims for the next target of 79. Moreover, on a weekly basis, the 200MA is acting as a resistance at the 77 mark.






Crypto:



The U.K. government has rejected a proposal from the U.K. Treasury Committee to regulate crypto retail trading similar to gambling. It firmly disagrees with the Committee's stance.
During the second quarter of 2023, the Grayscale Bitcoin Trust (GBTC) proved to be one of the best performers at Cathie Wood's ARK Invest.
According to ARK's latest quarterly ETF Report, released on July 19, GBTC significantly contributed to the success of the ARK Next Generation Internet exchange-traded fund (ARKW) in Q2.
NYDIG, a prominent crypto trading firm, released a research report suggesting that the introduction of Bitcoin spot-based exchange-traded funds (ETFs) could potentially create $30 billion in new demand for Bitcoin, the world's largest digital asset. CoinDesk reported this information today.
BTC news, analysis, and On-Chain analysis all indicate a forming bullish run.
Technically, Bitcoin (BTC) is experiencing a range-bound price action formation, with the resistance level at 31,800 and the support level at 29,900. Traders are paying close attention to the weekly chart, specifically watching for a potential breakout above the 100-day moving average (100MA). A successful breakout above this level has the potential to drive the price toward the initial resistance at 36,000.

 

[zForex]

US INDICES:
View attachment 24457

Stock futures were higher Friday as traders assessed the latest corporate earnings results, and the Dow Jones Industrial Average tried to stretch its winning streak to 10 sessions. S&P 500 futures gained 0.3%, and Nasdaq-100 futures ticked up 0.5%.
Corporate earnings have been mixed thus far. Seventy-three percent of S&P 500 companies that have already reported exceeding analysts’ expectations, according to FactSet data. However, that beat rate is below a three-year average of 80%, according to The Earnings Scout.
Netflix Inc. and Tesla Inc. climbed in pre-market trading. Both stocks led the Nasdaq 100 Index to sharp losses on Thursday on the back of results that disappointed investors. American Express Co. fell almost 3% in the premarket after missing revenue forecasts.
Regional Banks were higher in premarket trading on Friday, with the SPDR S&P Regional Banking ETF (KRE) up more than 9% since Monday.
The Nasdaq technically started a correction after touching an important resistance level and came back by 2.3% yesterday. Next support is around the 15250 level.





USOIL:
View attachment 24456

The prices have increased by 8.2% since the beginning of the month. This rise can be attributed to several factors, including Saudi Arabia's decision to implement a voluntary export cut of one million barrels per day for July and August, along with Russia's own cuts and tighter quotas for other OPEC+ members. However, these cuts come at a time when developed economies are slowing down due to rising interest rates, which is affecting the demand for oil.
China, as the top importer, has also played a role in keeping prices below the 2023 high of US$83.26 per barrel reached in mid-April. The weak growth in China has been a contributing factor. Nevertheless, the country is taking measures to stimulate its economy, such as introducing support measures for car and electronics purchases. However, it remains uncertain whether these steps will result in immediate increased demand.
Despite the efforts of the two biggest exporters, Saudi Arabia and Russia, there is still limited evidence that the cuts are significantly reducing the excess inventory. For instance, the United States reported a decrease in inventories of only 0.7 million barrels last week, which was less than expected.
In summary, the oil price surge can be attributed to export cuts by major oil-producing countries, slowing growth in developed economies, and weak demand in China. While China is trying to boost its economy through support measures, the impact on immediate demand remains uncertain. Furthermore, there are indications that the cuts made by Saudi Arabia and Russia may not be leading to substantial inventory drawdowns.
WTI crude oil is once again approaching the 77-resistance level, posing a challenge for WTI to sustain its momentum towards the next target of 79. Furthermore, on a weekly basis, the 200MA is acting as a barrier at the 77 mark.

Crypto:
View attachment 24458

Bitcoin and other cryptocurrencies experienced a decline on Friday, with digital assets continuing to perform worse than the stock market. This trend is concerning for the overall sentiment towards cryptocurrencies.
Market data suggests that unpredictable sellers are putting downward pressure on crypto prices, which is different from the stock market, where investor optimism and positive sentiment have been driving stocks higher in recent weeks. Although cryptocurrencies and stocks are distinct, some Bitcoin enthusiasts view the decoupling of token and equity prices as a positive aspect. Nevertheless, both asset types remain sensitive to risks and have shown similar dynamics this year, especially in response to interest rate and recession concerns.
In an unexpected turn of events, Tesla, the electric vehicle and clean energy company, has removed Bitcoin from the source code of its payment page. Surprisingly, Dogecoin remains unaffected by this change. This development has triggered speculation among cryptocurrency enthusiasts, particularly due to Tesla's previous involvement with both cryptocurrencies.
Technically, Bitcoin (BTC) continue experiencing a range-bound price action formation, with the resistance level at 31,800 and the support level at 29,900. Traders are paying close attention to the weekly chart, specifically watching for a potential breakout above the 100-day moving average (100MA). A successful breakout above this level has the potential to drive the price toward the initial resistance at 36,000.

Post automatically merged: Jul 21, 2023

US INDICES:

Stock futures were higher Friday as traders assessed the latest corporate earnings results, and the Dow Jones Industrial Average tried to stretch its winning streak to 10 sessions. S&P 500 futures gained 0.3%, and Nasdaq-100 futures ticked up 0.5%.
Corporate earnings have been mixed thus far. Seventy-three percent of S&P 500 companies that have already reported exceeding analysts’ expectations, according to FactSet data. However, that beat rate is below a three-year average of 80%, according to The Earnings Scout.
Netflix Inc. and Tesla Inc. climbed in pre-market trading. Both stocks led the Nasdaq 100 Index to sharp losses on Thursday on the back of results that disappointed investors. American Express Co. fell almost 3% in the premarket after missing revenue forecasts.
Regional Banks were higher in premarket trading on Friday, with the SPDR S&P Regional Banking ETF (KRE) up more than 9% since Monday.
The Nasdaq technically started a correction after touching an important resistance level and came back by 2.3% yesterday. Next support is around the 15250 level.
USOIL:The prices have increased by 8.2% since the beginning of the month. This rise can be attributed to several factors, including Saudi Arabia's decision to implement a voluntary export cut of one million barrels per day for July and August, along with Russia's own cuts and tighter quotas for other OPEC+ members. However, these cuts come at a time when developed economies are slowing down due to rising interest rates, which is affecting the demand for oil.
China, as the top importer, has also played a role in keeping prices below the 2023 high of US$83.26 per barrel reached in mid-April. The weak growth in China has been a contributing factor. Nevertheless, the country is taking measures to stimulate its economy, such as introducing support measures for car and electronics purchases. However, it remains uncertain whether these steps will result in immediate increased demand.
Despite the efforts of the two biggest exporters, Saudi Arabia and Russia, there is still limited evidence that the cuts are significantly reducing the excess inventory. For instance, the United States reported a decrease in inventories of only 0.7 million barrels last week, which was less than expected.
In summary, the oil price surge can be attributed to export cuts by major oil-producing countries, slowing growth in developed economies, and weak demand in China. While China is trying to boost its economy through support measures, the impact on immediate demand remains uncertain. Furthermore, there are indications that the cuts made by Saudi Arabia and Russia may not be leading to substantial inventory drawdowns.
WTI crude oil is once again approaching the 77-resistance level, posing a challenge for WTI to sustain its momentum towards the next target of 79. Furthermore, on a weekly basis, the 200MA is acting as a barrier at the 77 mark.
Crypto:

Bitcoin and other cryptocurrencies experienced a decline on Friday, with digital assets continuing to perform worse than the stock market. This trend is concerning for the overall sentiment towards cryptocurrencies.
Market data suggests that unpredictable sellers are putting downward pressure on crypto prices, which is different from the stock market, where investor optimism and positive sentiment have been driving stocks higher in recent weeks. Although cryptocurrencies and stocks are distinct, some Bitcoin enthusiasts view the decoupling of token and equity prices as a positive aspect. Nevertheless, both asset types remain sensitive to risks and have shown similar dynamics this year, especially in response to interest rate and recession concerns.
In an unexpected turn of events, Tesla, the electric vehicle and clean energy company, has removed Bitcoin from the source code of its payment page. Surprisingly, Dogecoin remains unaffected by this change. This development has triggered speculation among cryptocurrency enthusiasts, particularly due to Tesla's previous involvement with both cryptocurrencies.
Technically, Bitcoin (BTC) continue experiencing a range-bound price action formation, with the resistance level at 31,800 and the support level at 29,900. Traders are paying close attention to the weekly chart, specifically watching for a potential breakout above the 100-day moving average (100MA). A successful breakout above this level has the potential to drive the price towards the initial resistance at 36,000.

 

[zForex]

EURUSD

The preliminary estimate revealed that the Germany Composite PMI declined to 48.3 in July 2023 from June's 50.6, falling below the expected 50.3. This indicates the first contraction in private sector activity this year and the most significant downturn since November. The decline is attributed to a sharp drop in manufacturing production since May 2020, mainly due to decreasing demand for goods.
Similarly, the HCOB France Composite PMI dropped to 46.6 in July 2023 from June's 47.2, falling short of the projected 47.8. This points to the most substantial contraction in private sector activity since November 2020, with both manufacturing and services output experiencing a decline for the second consecutive month.
As the week progresses, there is an upcoming ECB meeting where the market anticipates a 25 bp hike, potentially raising interest rates to 4.25%. However, it's worth noting that last week, ECB members hinted that after this rate increase, further actions are uncertain or not guaranteed.
The EUR/USD continues the selloff towards the lower parallel of the current bearish channel at the 1.1085 support level. A breakout of this level may take the price to the next target around the 1.1045 support level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1085	1.1046	1.1000

GBPUSD

On Friday, the UK's Office for National Statistics (ONS) released its report indicating that the country's monthly Retail Sales data increased by 0.7% in June, compared to a mere 0.1% rise in May, which exceeded the expected 0.2% growth. However, the annual Retail Sales data contracted by 1.0%, although it was better than the anticipated -1.5% and the previous -2.1%.
Additionally, the monthly headline Consumer Price Index (CPI) showed a 0.1% expansion, falling short of the consensus forecast of 0.4% and lower than the 0.9% figure from the previous period.
As of August 3, investors held divergent views on the Bank of England's (BoE) future interest rate policy. While some market participants expected BoE Governor Andrew Bailey to implement a 50-basis point (bps) interest rate hike, a group of investors leaned towards a more conservative 25-bps rate hike due to the softer inflation data.
In the US, the labor market exhibited resilience as unemployment claims data showed lower-than-anticipated levels recently. Consequently, the market is now pricing in almost a 100% probability of a 25-bp rate hike during the upcoming FED meeting, which would mark the last hike in this tightening cycle.
The GBP/USD found support at the 1.2850 level. A first rejection of this level has occurred, and a breakout may lead the price toward the next target of 1.2750.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2850	1.2750	1.2650

USDJPY

The Bank of Japan is scheduled to hold its upcoming 2-day policy meeting next week. It is widely anticipated that the bank will maintain its current policy settings, with interest rates to be kept at -0.1% and Yield Curve Control (YCC) retained. The YCC aims to flexibly target 10-year yields at 0%, allowing a range of +/- 50 basis points.
During the meeting, the central bank will also release its latest Outlook Report, which includes the Board members' median forecasts for Real GDP and Core CPI. Some press reports have suggested that the Bank of Japan might raise the inflation forecast above the 2% target level at this meeting. If this happens, it could potentially pave the way for further policy normalization.
There has been speculation regarding a possible adjustment to yield curve control. Former BoJ Director Hayakawa expects that the bank might tweak its policy by raising the 10-year yield ceiling to 1.0% this month. However, on Friday, Reuters sources indicated that the Bank of Japan is leaning towards maintaining its current yield control policy during the upcoming meeting.
USDJPY at the 142 level serves as the second resistance level, especially the upper parallel of the current downward channel act as resistance for the current price action also the historical level of 142 is important.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

With the major bond yields of developed countries going down, gold has become more attractive. The tightening cycle is ending as a slowdown in inflation has become clear in the US and EU, leading economies. In such conditions, gold generally becomes more attractive for holding. Additionally, the EU has started signaling worse-than-expected economic activity, as evidenced by PMI from manufacturing and services being in the contraction territory, and this trend may continue downward. A possible recession can affect risk-taking, and Gold is considered a safe haven in times of risk-off sentiment, especially as Q2 earnings results in the US were lower than expected.
Gold found support and stabilized at the $1959 level. Additionally, the RSI in the 2H chart signals a divergence, indicating a possible reversal towards the $1968 level, followed by the $1973 resistance level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1931	1920	1904

DAX 40

Shares in Europe were poised to begin the week with a negative outlook on Monday following the inconclusive results of the Spanish elections. In addition, markets were preparing for central bank meetings, where another round of interest rate hikes was anticipated. Investors also had their attention on corporate earnings.
The outcome of Sunday's vote in Spain didn't provide a clear victory for either the left or right bloc, leaving the eurozone country facing the challenge of lengthy negotiations or the possibility of holding fresh elections to form a government.
Regarding earnings, Vodafone reported a 3.7% growth in quarterly service revenue, driven by a strong performance in Britain and an improvement in the rate of decline in Germany, Italy, and Spain. Dutch operator KPN also released its results, showing a 16% rise in second-quarter net profit. Ryanair was under scrutiny as the airline expressed caution about travel demand for the remainder of the year. Due to Boeing delivery delays, the company had to revise its passenger growth forecast despite achieving quarterly profit levels surpassing pre-pandemic figures.
On a more positive note, Philips raised its targets slightly after posting better-than-expected core earnings. The health technology company attributed this success to improved supply chains, a strong order book, and efficiency measures. The DAX came back toward the 16,200 level. In the short term, the DAX remains bullish due to the prevailing risk-on sentiment in the markets, Q2 earnings started positive and better than expected which may help the Dax reach the last high at 16400.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16800	16600	16370	15650	15400	15200

 

[zForex]

EURUSD

The Eurozone PMIs for June disappointed as both the Manufacturing PMI and the Services PMI came in below expectations, recording figures of 42.7 and 51.1, respectively. The Composite Index also experienced a decline, reaching 48.9, marking its lowest reading since November. Germany and France were hit particularly hard, with their Composite Indexes falling below 50, which adds to concerns about potential recession risks in the region. Despite these indicators reflecting economic weakness, the European Central Bank (ECB) is likely to raise interest rates by 25 basis points on Thursday. The key to watch out for will be the messaging surrounding this decision.
In the United States, market participants adjusted their positions as they awaited the Federal Reserve's decision. The expectation is that the Fed will raise its key rate by 25 basis points on Wednesday. The central bank's communication following this move will be crucial for the Dollar and financial markets alike. In terms of US PMI data, the Services PMI showed a decrease from 54.4 to 52.4 in July, falling short of the expected 54. However, the Manufacturing PMI rebounded from 46.3 to 49, surpassing the market consensus of 46.4.
Today, the market will pay close attention to important economic data from both Europe and the US. From Europe, the Ifo Business Climate Index will be released, while the US will provide insights into CB Consumer Confidence.
The EUR/USD extended its selloff towards the lower parallel of the current bearish channel, reaching the 1.1060 support level, which aligns with the 100MA on the 4H chart. Additionally, the price is nearing the historical level of 1.1045, and a breakout below this point could potentially lead to a decline toward 1.1000.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1085	1.1046	1.1000

GBPUSD

The recent selloff of the USD, caused by a miss in the US CPI report, has been completely reversed due to better-than-expected US economic data. These positive surprises have kept the possibility of a rate hike after the July increase alive. Last week, the US Initial Claims beat expectations and reached record lows, while the US PMIs showed a mixed picture, although the Manufacturing PMI exceeded expectations significantly. The market expects the Fed to raise rates by 25 bps this week and maintain a data-dependent approach. Therefore, if the US continues to receive positive economic data, another rate hike is highly likely.

On the other hand, the UK CPI missed expectations across the board last week, leading to a significant revision in interest rate expectations. Prior to the report, the market had been pricing in a higher chance of a 50-bps hike due to the higher wages data from the previous UK employment report. Now, the market believes there is a higher likelihood that the Bank of England (BoE) will raise rates by 25 bps at the upcoming meeting, and this adjustment has put downward pressure on the GBP.

The GBP/USD has found support at the 1.2800 level, which is now acting as a new support after previously serving as a resistance level. This development is a positive sign for the continuation of the bullish long trend. If the price manages to break out above this level, it is likely to move towards the 1.2700 mark.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2850	1.2750	1.2650

JPYUSD

On Monday, the preliminary S&P Global US Manufacturing PMI data surpassed expectations, coming in at 49, which was higher than the market's anticipated 46.4 and also above the previous reading of 46.3 in June. However, the Services PMI declined from 54.4 to 52.4. As a result, the US S&P Global Composite PMI fell to 52, down from June's 53.2.
In addition to the mixed US PMI figures, the data released last week indicated that inflationary pressures are easing, and the labor market remains tight. These findings have sparked speculation that the Federal Reserve might conclude its tightening monetary policy after the July meeting.
On Friday, the Bank of Japan (BoJ) is set to announce its monetary policy. BoJ Governor Kazuo Ueda dismissed speculation of a Yield Control Curve policy change and asserted that achieving the 2% inflation target would still require additional efforts. This suggests that Japanese policymakers are likely to maintain a dovish policy stance to sustain inflation at a level above 2%. Furthermore, BoJ policymakers prefer to assess more data to ensure wages and inflation continue to rise before considering any policy modifications.
After reaching the 142.00 resistance level the pair is coming back with the next support around the 140.50 level followed by the 139.00 area.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

The Asia-Pacific zone is experiencing a boost in optimism, thanks to China's stimulus measures and interventions by Beijing's central bank. Nonetheless, concerns persist due to mixed reactions to the recently released PMI data and central bank actions, encouraging the XAU/USD bulls.
Fears of a looming recession have resurfaced following the continuous decline in Europe and US PMI figures, indicating a deterioration in economic activity. The falling yields are also contributing to Gold's increasing allure as a safe-haven asset.
In the near term, the direction of the gold price is expected to be influenced by the US CB Consumer Confidence data for July, projected at 112.10 compared to the previous reading of 109.70. However, the primary focus will be on the upcoming monetary policy meetings of the Federal Reserve (Fed) and the European Central Bank (ECB), as market participants keenly await any hints or insights into their future policies.
Gold continued to decline until the 1952 level, which now appears to be a correction. However, the actual short-term trend seems healthy and may continue to decline if the dollar gains more momentum.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

DAX40

On Tuesday, European stock markets exhibited little movement, hovering around the flat line. Investors were cautious as they awaited the US Federal Reserve and European Central Bank meetings scheduled for later in the week, where rate hikes were expected to be announced.
Moreover, traders reacted positively to China's commitment to strengthening its economy through increased policy support.
In terms of corporate performance, Unilever's quarterly sales figures exceeded expectations, providing a positive outlook. However, the markets were dealt a blow when German chemicals giant Bayer reduced its outlook.
Luxury stocks like LVMH and Richemont, which have significant exposure to the Chinese market, saw an increase of more than 1% each.
Remy Cointreau experienced a 5.0% gain after the French spirits group expressed confidence in a sharp sales rebound in the US from the third quarter.
As for the DAX, it remained around the 16,200 level. In the short term, the DAX's momentum remained bullish, and there might be a possible price concentration around the current resistance area of 16,200-16,400, which could indicate the formation of a reversal pattern.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

Germany's IFO Business Climate Index declined to 87.3 in July, missing expectations of 88.0 and down from the previous value of 88.6. Additionally, the Current Economic Assessment for the same month was reported at 91.3, compared to June's 93.7 and the projected 93.0. Furthermore, the IFO Expectations Index, which indicates firms' outlook for the next six months, dropped to 83.5 in July, lower than the previous value of 83.8 and the market forecast of 83.0. Following this mostly negative economic data from Germany, IFO Economist Klaus Wohlrabe commented that the "German GDP is likely to contract in the third quarter."
On the other hand, the US Conference Board (CB) Consumer Confidence surged to 117.0 in July, up from the revised figure of 110.10 in the previous period, surpassing market expectations of 112.10. The survey also revealed a slight decrease in one-year consumer inflation expectations to 5.7%, while the Present Situation Index and Consumer Expectations Index rose to 160.0 and 88.3, respectively, for the same month.
Today's FED meeting, which the market has priced with almost 100% certainty to result in a 25bp hike, may provide insight into the Fed members' future projections, specifically whether they plan to pause at the current interest rate levels or implement another rate hike later this year. Markets are confident that this potential hike could be the final one in the current tightening cycle.
The EUR/USD has found support at the 1.1040 level, which coincides with the lower boundary of the current bearish channel. An upward correction is now underway, and the next target for the pair could be the median line at the 1.1100 level. In case of a sudden breakout, the pair may move toward the 200MA support level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1400	1.1300	1.1250	1.1085	1.1046	1.1000

GBPUSD

The data released earlier this week revealed that economic activity in the United Kingdom was weaker than expected. The Manufacturing PMI for July declined to 45.0 from June's figure of 46.5, falling short of the anticipated 46.1. This marks the 12th consecutive month of contraction in the manufacturing sector. Additionally, the preliminary Services PMI for July dropped to 51.5 from the previous reading of 53.0, missing the expected 53.7.
In June, the Bank of England (BoE) took the markets by surprise when it raised its Bank Rate by 50 basis points (bps) to 5.00%. This prompted investors to quickly factor in a terminal rate of 6.50%. The BoE's aggressive rate hikes, the most significant in three decades, have raised concerns about their potential impact on the UK's economy and put pressure on the pound sterling.
Nonetheless, according to the latest Reuters poll, 42 out of 62 economists predict that the Bank Rate will see a 25-bps increase to 5.25% during the upcoming BoE meeting scheduled for August 3. In contrast, only 20 economists predicted a half-point hike.
The GBP/USD has found support at the 1.2800 level, which is now acting as new support after previously serving as a resistance level. This development is a positive sign for the continuation of the bullish long trend. If the price manages to break out above this level, it is likely to move towards the 1.2980 mark.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3310	1.3200	1.3000	1.2800	1.2750	1.2650

JPYUSD

The International Monetary Fund (IMF) has issued a warning about the possibility of higher inflation in Japan and has called on the Bank of Japan (BoJ) to exit its easy-money policy. However, BoJ Governor Kazuo Ueda reiterated on Wednesday that the central bank will maintain its accommodative monetary stance and assured that the long-term yield rate remains stable due to the yield curve control (YCC) policy.
Meanwhile, the Federal Reserve (Fed) is expected to raise interest rates by 25 basis points. Nevertheless, investors have gained some confidence that the US central bank may adopt a more dovish stance in response to a potential downturn in economic activity. As a result, the focus will be on the accompanying policy statement and the press conference by Fed Chair Jerome Powell.
Investors will closely watch for clues about the future path of rate hikes, which will significantly impact the dynamics of the USD price and could provide significant momentum to the USD/JPY pair.
After reaching the 142.00 resistance level the pair is coming back with the next support is around 140.50, followed by the 139.00 area.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00

XAUUSD

The price of gold is attempting to recover as investors come to terms with the Federal Reserve's (Fed) plan to raise interest rates by 25 basis points, bringing the rate to the range of 5.25% to 5.50%. This has led to increased demand for the precious metal as market participants hope that the rate hike in July will be the final one for this year, and the Fed might pause its rate-hiking cycle for a longer duration.
Furthermore, concerns about a global recession have eased due to the positive Consumer Confidence in the United States, along with expectations that the Fed will soon announce the peak of interest rates. These factors have put pressure on the US Dollar Index (DXY), causing it to retreat. Investors believe that Fed Chair Jerome Powell will not take an overly aggressive stance on handling sticky inflation.
Following the Fed's policy decision on Wednesday, there is anticipation around the release of US GDP numbers for the second quarter on Thursday, which is keeping investors on edge.
Gold, after finding support around the 1954 level, underwent a correction and is currently facing resistance in 1970, coinciding with the upper parallel of the downtrend. If there's a breakout above the current level, the first resistance will likely be encountered around 2074, followed by the 2080 level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

DAX40

European shares experienced a decline on Wednesday as investors assessed a range of corporate earnings, and there was a prevailing sense of caution in the markets ahead of the Federal Reserve's upcoming monetary policy decision.
Notably, Deutsche Bank faced a setback, with its shares slipping nearly 1% following a 27% decrease in second-quarter profit due to a significant drop in investment banking revenue.
Similarly, the French luxury group LVMH had an impact on the personal and household goods sector, witnessing a decline of 3.6% following the release of its half-yearly results.
In contrast, British aero-engineer Rolls-Royce witnessed a substantial surge of over 24%, claiming the top position in the index. This impressive gain, the largest since August 2021, was attributed to a trading update that raised its full-year operating profit forecast by approximately 45%.
Furthermore, French glass packaging producer Verallia emerged as the second-biggest gainer, enjoying a rise of over 10% in response to better-than-expected H1 results and an optimistic guidance hike.
DAX is coming back from the 16200 level. There is a possible price concentration around the current resistance area of 16,200-16,400, which could indicate the formation of a reversal pattern.
​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

The European Central Bank (ECB) raised key rates by 25 basis points as expected in the July policy meeting. However, ECB President Christine Lagarde's expression of concerns about the near-term economic outlook and inflation uncertainty had a dovish impact on the euro. On the other hand, positive macroeconomic data from the US strengthened the US Dollar, resulting in a sharp decline in EUR/USD.
The US economy grew at an annual rate of 2.4% in the second quarter, exceeding market expectations of 1.8%. Additionally, Durable Goods Orders rose more than expected in June, and weekly Initial Jobless Claims declined.
ECB policymakers Boštjan Vasle and Madis Muller made contrasting statements, with Vasle mentioning the possibility of either hiking or pausing rates in September, while Muller stated that future ECB decisions were no longer obvious. However, these statements failed to support the euro.
Later in the day, the US will release the Personal Consumption Expenditures (PCE) Price Index data for June, with a forecasted monthly rise of 0.2%. Despite a decline in the Core PCE Prices in the second quarter, a soft monthly PCE inflation reading is not expected to be surprising at this point.
The EUR/USD selloff continued after the ECB meeting, and now the price is testing the last support level along the downward parallel of the bullish long channel. A potential recovery from this level may help the EUR/USD maintain a bullish outlook in the long term. However, if the price breaks below the current support level, it could lead to a further decline toward the next support level at 1.0850, opening new possibilities for the currency pair.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1210	1.1180	1.1120	1.1085	1.1046	1.1000

GBPUSD

Market sentiment has turned negative, and the United Kingdom is experiencing a decline in resilience amid an aggressively restrictive monetary policy environment. The GBP/USD pair is facing significant challenges as UK authorities express concerns about deepening recession fears resulting from consistent interest rate hikes by the central bank. The housing sector, factory activities, and retail orders in the UK have come under pressure due to the heavy burden of higher inflation and soaring interest rates.
The higher inflation and restrictive interest rate policy are putting a strain on United Kingdom households as their real income is being sharply squeezed. Britain's housing sector, retailers, and factories are facing turbulent times due to rising borrowing costs and uncertain forward demand. Despite these restrictive factors, the Bank of England (BoE) is preparing to raise interest rates further in an effort to achieve price stability.
The GBP/USD fell due to the dollar's performance and is now approaching the next support level around the 1.2700 area. As for EUR/USD, the bullish long channel may face a challenging shift in sentiment, potentially leading to a retracement toward the levels seen in May and June.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650

JPYUSD

The US Gross Domestic Product (GDP) unexpectedly expanded at a higher rate of 2.4% compared to the previous quarter's 2.0%. Durable Goods Orders data for June also rose significantly by 4.7% surpassing expectations. Weekly jobless claims for July 21 remained below expectations, indicating a strong US economic outlook. The Federal Reserve may announce one more interest rate hike in September due to tight labor market conditions and the economy's resilience.
The Bank of Japan (BOJ) decided to maintain its benchmark policy rate at -0.1%. Additionally, the central bank announced its intention to allow 10-year government bond yields to fluctuate within a range of approximately plus or minus 0.5%. However, the BOJ plans to implement yield curve control with greater flexibility, viewing the upper and lower bounds of the range as references rather than strict limits during market operations.
USDJPY retraced towards the support area around the 138-137 level and rebounded while the dollar was still strong. The bearish channel has been tested twice around the 138-137 support area. A breakout may push the price toward the 135.00 support level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

Gold price rebounded slightly on Friday amid concerns of a potential recession and worsening US-China relations, supporting XAU/USD. However, the metal's upside is limited due to expectations of more interest rate hikes by major central banks. The recent hawkish outlook from the Federal Reserve and strong economic data from the US contribute to this sentiment.
The ongoing uncertainty and geopolitical risks may prevent aggressive bearish bets on gold for now. Nevertheless, the metal could face modest losses for the first time in four weeks as market focus shifts to next week's crucial US macro data.
Traders are closely watching the US Core PCE Price Index release for clues about the Fed's future policy moves, which could impact the USD and influence gold's direction.
Yields are coming back higher after yesterday’s US data and this also putting pressure on gold to the downside.
The gold selloff took the price down to the confluence point of the 1942 area, where we have a strong support historical level and the 200MA (200-day moving average) also resides. A rebound from this level is more likely than a continuation down, especially considering the possibility that the yields on the US10Y may retreat after yesterday's run. The likelihood of a breakout below the 1942 area is less probable to occur.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

European shares declined on Friday, retreating from their multi-month highs achieved in the previous session. The pullback was influenced by a combination of factors, including a mixed batch of earnings reports and an increase in bond yields following the Bank of Japan's adjustments to its monetary policy.
The Bank of Japan (BoJ) decided to make its yield curve control policy more flexible by loosening its defense of a long-term interest rate cap. Consequently, Japanese government bond yields rose, and this move had a ripple effect on European government bond yields, leading to similar increases.
Capgemini, a French IT consulting group, experienced a notable decline of 7.5% in its share price in the context of corporate earnings. This decline came after the company announced its plan to invest a substantial amount of 2 billion euros ($2.19 billion) in artificial intelligence (AI) over the next three years.
On the other hand, French drugmaker Sanofi experienced a more modest decline of 2.5% despite raising its earnings forecast, indicating that the positive news was not enough to outweigh other market influences.
Meanwhile, luxury goods manufacturer Hermes witnessed a 3.8% increase in its share price, driven by accelerated sales in the second quarter, particularly for their iconic Birkin bags.
Additionally, the Pan-European stock and derivatives exchange, Euronext, experienced a notable gain of 5.2% after announcing the launch of a 200-million-euro ($219.88 million) share buyback program.
DAX touched the last resistance level of 16,400 for the third time. There is a possible price consolidation around the current resistance area of 16,200-16,400, which could indicate the formation of a reversal. Additionally, the RSI confirms a divergence on the weekly chart. Until we break the 16,400 level, this reading will continue to be the actual narrative possibility .​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

Asia-Pacific Markets Rise Amidst China's Fourth Consecutive Month of Factory Contraction; Central Banks Adjust Policies in Response to Economic Challenges

On Monday, Asia-Pacific markets saw gains despite China's factory activity remaining in contraction territory for the fourth consecutive month in July. The official manufacturing purchasing managers index (PMI) was 49.3, slightly higher than June's figure of 49.0, according to the National Bureau of Statistics. Additionally, the PMI for non-manufacturing activity came in at 51.5, indicating a slower rate of expansion compared to June's 53.2.
In Japan, the central bank made adjustments to its yield curve control. They allowed 10-year Japanese government bond yields to fluctuate within a range of approximately plus and minus 0.5 percentage points from its 0% target. Furthermore, the bank offered to purchase 10-year JGBs at 1% through fixed-rate operations, expanding its tolerance by 50 basis points. These measures were taken to address concerns about the prolonged impact of monetary easing on financial markets and the real economy. BOJ Governor Kazuo Ueda clarified that it is not a move towards policy normalization but rather a measure to enhance the sustainability of yield curve control. The bank also kept its ultra-loose interest rate at -0.1% and raised its median inflation forecast for fiscal 2023 to 2.5%.
Today, preliminary Eurozone inflation data will be released, and it is expected to show a further decline from June's 5.5%. This may provide some relief for policymakers. The European Central Bank's Christine Lagarde indicated last week that the bank was open-minded about the possibility of raising rates in September as inflation shows signs of easing.
The Bank of England is widely anticipated to raise interest rates by at least 25 basis points during its upcoming policy meeting on Thursday. This would mark the 14th consecutive increase, driven by the persistence of high U.K. inflation, which saw a slight drop to 7.9% in June.​

EURUSD

The European Central Bank (ECB) raised key rates by 25 basis points as expected in the July policy meeting. However, ECB President Christine Lagarde expressed concerns about the near-term economic outlook and the uncertainty surrounding inflation. Her dovish tone weighed on the euro, while positive macroeconomic data from the US boosted the US Dollar, causing a sharp decline in EUR/USD.
The US economy grew at an annual rate of 2.4% in the second quarter, exceeding market expectations of 1.8%. Additionally, Durable Goods Orders increased more than expected in June, and weekly Initial Jobless Claims declined.
PCE data came close to what’s forecasted, not making that much impact but signaling that inflation may become sticky on some levels.
Today the data for CPI and GDP from the EU will have an impact on the EUR/USD and projections on inflation developments and the probability of recession in the EU.
The EUR/USD price is testing the last support level along the downward parallel of the bullish long channel. A potential recovery from this level may help the EUR/USD maintain a bullish outlook in the long term. However, if the price breaks below the current support level, it could lead to a further decline toward the next support level at 1.0850, opening new possibilities for the currency pair.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1210	1.1180	1.1120	1.1085	1.1046	1.1000

GBPUSD
The GBP/USD experienced a sharp decline due to the overall strength of the US Dollar. This was triggered by investors reevaluating the Federal Reserve's policy outlook following the release of robust macroeconomic data.
In the second quarter, the US Real Gross Domestic Product (GDP) expanded at an annual rate of 2.4%, surpassing market expectations of 1.8%. Additionally, there were positive developments with weekly Initial Jobless Claims decreasing to 221,000 and Durable Goods Orders increasing by 4.7% monthly in June, far exceeding analysts' estimate of 1%.
As a result of the 25-basis points rate hike on Wednesday, there is growing uncertainty in the markets about whether the Fed has reached its terminal rate. This uncertainty has propelled the US Dollar to outperform other currencies as we head into the weekend.
The GBP/USD is currently recovering from the 1.2750 level, but for any discussion of a new positive trend in GBPUSD, a breakout above the key 1.3000 round number is necessary. Meanwhile, the EUR/USD's bullish long channel could face a challenging shift in sentiment, potentially resulting in a retracement back towards the levels witnessed in May and June.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650

USDJPY

The BOJ adjusted its yield curve control. They allowed 10-year Japanese government bond yields to fluctuate within a range of approximately plus and minus 0.5 percentage points from its 0% target. Furthermore, the bank offered to purchase 10-year JGBs at 1% through fixed-rate operations, expanding its tolerance by 50 basis points. These measures were taken to address concerns about the prolonged impact of monetary easing on financial markets and the real economy. BOJ Governor Kazuo Ueda clarified that it is not a move towards policy normalization but rather a measure to enhance the sustainability of yield curve control. The bank also kept its ultra-loose interest rate at -0.1% and raised its median inflation forecast for fiscal 2023 to 2.5%.
USDJPY made a reversal and broke the 142.00 level with the US yields that are going beyond 4% for the 10Y. The next target will be the 144.00 level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

The gold price (XAU/USD) remained relatively stable but slightly lower as investors prepared for important US employment and activity data this week. Despite printing the first weekly loss in four, the yellow metal's recovery on Friday was not enough to impress. The positive US growth numbers, combined with the Federal Reserve's readiness for further rate hikes, exerted downward pressure on the gold price last week. However, the softer readings of the Fed's preferred inflation gauge, the US Core Personal Consumption Expenditure (PCE) Price Index for June, provided some support to the XAU/USD price.
Lately, the market sentiment has been mixed, even with China's stimulus measures and Japan's bond buying. This has allowed the US Dollar bulls to regain strength, which in turn, put further pressure on the gold price as investors brace for this week's crucial US employment and PMI data.
The gold price found support at the 142.00 level and recovered toward the 1964 resistance level. The yield improvement is going up and is affecting the gold price down.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

DAX40

European shares slightly declined on Monday as investors awaited data on Eurozone inflation for July, which is expected to show a decrease. This could potentially lead to the European Central Bank keeping interest rates steady in September. Heineken faced a 4.8% slide after lowering its 2023 profit growth forecast due to a slowdown in Vietnam impacting first-half earnings more than anticipated. Diageo and Anheuser-Busch InBev also fell over 1%. The flash reading of euro area inflation, scheduled for 0900 GMT, is anticipated to reveal a decline to 5.3% in July from 5.5% compared to the previous year. Despite raising rates for the ninth consecutive time, the ECB may still consider a pause in September as core inflation remains persistent. Meanwhile, an index of Eurozone banks showed a slight uptick of 0.2% after the European Banking Authority's annual stress test results revealed that three out of 70 banks in the European Union failed to meet binding capital requirements.
DAX surprisingly broke the 16,400-resistance level, fueled by hopes that the ECB may hold interest rates at their current levels. This is particularly relevant given the actual economic data, which suggests a possible recession if the tightening cycle continues to rise.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

Eurozone HICP in July rose by 5.5% YoY, and headline CPI increased by 5.3%. Q2 Eurozone GDP grew by 0.3% QoQ and 0.6% YoY. German Retail Sales in June rose by 1.6% YoY, beating expectations. The European Central Bank raised interest rates to 4.25% but hinted at a possible pause in September due to easing inflationary pressures. In the US, the PCE Price Index fell to 3% in June, and the Core PCE Price Index dropped to 4.1% YoY. The US Dollar strengthened to 102.00 on Tuesday, despite softer US inflation data. Market participants will focus on global Manufacturing PMI and Germany's Unemployment rate. The US Nonfarm Payrolls report on Friday is expected to show 180,000 new jobs and a 3.6% employment rate.
The EUR/USD, after yesterday's correction, encountered resistance at the 1.1045 level and is currently continuing the selloff, now in the downtrend of the long bullish channel. The DXY is also touching the resistance area at 102. On a daily basis, the 100MA serves as the next target for EURUSD at 1.0900.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1140	1.1090	1.1050	1.0950	1.0900	1.0850

GBPUSD

The US Dollar has strengthened due to prospects of tighter policies by the Federal Reserve, supported by a strong US GDP report. Worries about a downturn in China also contribute to the USD's safe-haven appeal. However, optimism over more Chinese stimulus and expectations of the Fed ending its rate hike cycle might cap the USD's gains. On the other hand, expectations of more interest rate hikes by the Bank of England could support the British Pound. Market participants are also looking at upcoming economic data and key policy meetings for further trading opportunities.
The GBP/USD moved without direction at the beginning of this week. The next support is around the down parallel of the long bullish trend at the 1.2750 level. The resistance level is at 1.2900.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650

USDJPY

The Japanese Yen is being impacted by the Bank of Japan's policy shift. The BoJ Governor has granted more flexibility to the Yield Curve Control (YCC), maintaining interest rates while making bond-buying operations easier. The central bank also conveyed a strong message about possibly moving away from its long ultra-dovish policy.

Investors are anticipating the United States Manufacturing PMI for July, which will be reported by the Institute of Supply Management (ISM). The economic data is projected to continue its eight-month contracting trend, influenced by higher interest rates set by the Federal Reserve (Fed). US factory activities are expected to reach 46.5, surpassing the previous release of 46.0.

USDJPY broke the 142.00 resistance level and is now at the median level of the long bullish channel at 143.00. Meanwhile, the yields on Japanese bonds continue to rise.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

In July, the Chinese Caixin Manufacturing PMI fell to 49.2, the lowest level since January, impacting precious metals due to China's status as a major gold consumer. The Manufacturing PMI slightly improved to 49.3 but remained below 50, indicating contraction. Meanwhile, the NBS Services PMI declined from 53.2 to 51.5.

In the United States, evidence of easing underlying price pressures may prompt the Fed to soften its hawkish stance, potentially limiting the US Dollar's strength and supporting the gold price. The PCE Price Index decreased to 3% in June, while the Core PCE Price Index was at 4.1% annually.
Trade tensions between the US and China over technology access may add pressure to the gold price. China announced export restrictions on certain drones and equipment to the US.

Market participants are awaiting various US economic data, including the ISM Manufacturing PMI, JOLTS Job Openings, ADP Private Employment, Weekly Jobless Claims, Unit Labor Cost, and the Nonfarm Payrolls (NFP) report, which could influence USD price dynamics and create short-term trading opportunities around gold. The Sino-US relationship remains a focal point in the market. The gold came back after finding resistance at the mean line at the 1972.5 and the next support is at the 1948 level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

DAX40

European stocks slipped on Tuesday as weak factory activity data from Asia and some disappointing earnings stalled a rally in markets that had pushed several regional indexes to multi-year highs recently.
Asia's factory activity shrank in July, private surveys showed, a sign slowing global growth and weakness in China's economy was taking a toll on the region's fragile recovery. Eurozone factory surveys are due later in the day. Among companies that reported, DHL Group DHL fell 3% after the freight forwarder reported a slump in quarterly earnings as high inflation, the war in Ukraine and the ongoing energy crisis weighed on consumer demand and freight rates.
The main news in Europe is from earnings, with oil giant BP boosting its dividend despite a 70% fall in profit and HSBC launching a $2 billion buyback after profit beat forecasts.
DAX signaling a possible comeback as economic activity and economic data don’t show positive results and the possibility of a recession is growing even if yesterday's GDP in Europe was positive for the last quarter. The last support level is around 16220.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

On Tuesday, the U.S. government's top credit rating was downgraded by Fitch to AA+ from AAA. This decision angered the White House and surprised investors since the debt ceiling crisis had been resolved two months prior. Fitch cited fiscal deterioration over the next three years and concerns about repeated last-minute debt ceiling negotiations jeopardizing the government's ability to meet its financial obligations.
The latest Eurozone PMI report indicates minimal change, with the headline staying at 42.7 and Germany's at 38.8. However, there is positive news regarding Germany's unemployment rate, which fell to 5.6% in July. Despite this improvement, the interest rate market suggests that the likelihood of another rate hike from the European Central Bank (ECB) remains below 40%.
The EUR/USD found support around 1.0950 after the DXY also inversely touched the upper parallel of the long downtrend. A possible correction may occur, taking the EUR/USD back toward the 1.1046 resistance level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1140	1.1090	1.1050	1.0950	1.0900	1.0850

GBPUSD

The recent gloomy prints of the UK's inflation data have created challenges for the Bank of England (BoE) hawks in their efforts to control high inflation amidst sluggish economic activities and workforce issues. Additionally, the British Pound (GBP) is facing difficulties due to the ruling Tory Party's latest disappointment, having lost some key seats in the by-elections.
The market's cautious sentiment before the upcoming BoE Monetary Policy Meeting, scheduled for release on Thursday, is posing difficulties for pair traders as they grapple with mixed feelings. Even though the UK central bank is expected to announce a 0.25% rate hike, uncertainties arise if the "Old Lady," as the BoE is informally referred to, decides to pause the rate increase, or adopts a dovish stance. In such a scenario, the EUR/GBP will likely experience further upside movement.
The GBP/USD found support at the 1.2750 level, showing a possible comeback toward 1.2800, as the dollar appears weak today.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650

USDJPY

The Bank of Japan clarified that its recent policy adjustment does not indicate the beginning of a tightening cycle. Deputy Governor Shinichi Ichida emphasized that the flexible threshold for tolerance on long-term bond yields is a necessary modification to maintain its ultra-easy monetary policy position. The decision aims to continue with monetary easing while responding to economic risks both positive and negative, given the high uncertainties for economic activity and prices both domestically and internationally. Ichida stated that they are not considering an exit from monetary easing at this time.
USDJPY price action on the Hourly chart shows a double top pattern, signaling a possible reversal. The next possible support level will be around 142.00, especially with a weak dollar today.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

Market sentiment remains cautious after Fitch downgraded the US Long-Term Foreign-Currency Issuer Default Rating from AAA to AA+. The downgrade is primarily due to expected fiscal deterioration and a high government debt burden over the next three years.
US Treasury Secretary Janet Yellen disagrees with Fitch's decision, calling it "arbitrary and based on outdated data," adding to concerns about the US debt ceiling crisis and potential impact on the Greenback. Gold, being a safe-haven asset, may benefit from this situation.
Tensions between the US and China, with recent restrictions on drone exports, could also put pressure on the US Dollar. Furthermore, expectations of rate hikes by major central banks might limit the USD's upside and support the gold price.
Market participants are eagerly awaiting key economic indicators such as the US ADP Employment Change, weekly Jobless Claims, Unit Labor Cost, and the highly anticipated US Nonfarm Payrolls (NFP) data. Traders will also closely monitor US-China relations for possible influences on the gold price.
Gold found support at the 200MA, and everything depends on the US10Y performance. The first resistance is at the 1956 level, followed by 1965. If the actual support breaks, the price will likely move towards 1931.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1931	1920

DAX40

On Wednesday, European shares experienced a significant decline, reaching almost two-week lows. The losses were led by technology and auto stocks, as investors worldwide opted for safer assets following a surprise downgrade of the U.S. credit rating by Fitch.
U.S. futures fell by more than half a percent, and bond prices increased after Fitch downgraded the U.S. debt rating on Tuesday. The agency cited concerns about fiscal deterioration over the next three years and repeated last-minute debt ceiling negotiations that could jeopardize the government's ability to meet its financial obligations.
Regarding individual stocks, Siemens Healthineers, a U.S.-German medical device maker, saw a 5.4% drop in its quarterly operating profit due to declining demand for COVID-19 tests and delivery delays at Varian, a cancer treatment specialist.
Hugo Boss, a German fashion house, also faced a 4.1% decline in its stock price, despite raising its full-year outlook.
DAX make a gap down impacted by the Fitch news and the next support could be the 15800.
​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

The US government's top credit rating was downgraded by Fitch to AA+ from AAA. This decision angered the White House and surprised investors since the debt ceiling crisis had been resolved two months prior. Fitch cited fiscal deterioration over the next three years and concerns about repeated last-minute debt ceiling negotiations jeopardizing the government's ability to meet its financial obligations.
Private payrolls data that showed US companies added 324,000 workers last month, beating the consensus forecast of 190,000. Investors also reacted to news that the Treasury will issue $103 billion of securities next week, slightly more than forecast, and fresh on the heels of Fitch Ratings’ downgrade of the US.
Regarding the Eurozone PMI, the latest report indicates minimal change, with the headline staying at 42.7, and Germany's at 38.8. However, there was positive news in Germany's unemployment rate, which fell to 5.6% in July. Despite this, the interest rate market indicates that the likelihood of another rate hike from the European Central Bank (ECB) remains below 40%.
The EUR/USD continues to experience a selloff as the dollar benefits from positive economic data. The current support level is around 1.0900, followed by the 1.0850 level, which holds historical significance. Additionally, the 100MA on the 1-day chart may act as support for the time being.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1140	1.1090	1.1050	1.0950	1.0900	1.0850

GBPUSD

The Pound Sterling (GBP) is primed for intense volatility, as the Bank of England (BoE) is widely expected to raise interest rates at its fourteenth straight meeting today.
The Bank of England (BOE) is considering a 25-basis point hike after last month's inflation rate showed some improvement, sitting at 7.9%, down from 8.7% in May. Despite the BOE's divergent stance from other central banks, high inflation levels and mixed labor and wage data may cause market apprehension about any unexpected moves similar to the half-point curve ball thrown at their previous meeting. The British economy has shown resilience, managing to avoid a recession for the time being. Traders will also keep a close eye on future guidance.
The GBP/USD at the support level of 1.2650 support area waiting for the BOE today event for direction. Any breakout may take the price down toward the next support at 1.2600.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2800	1.2750	1.2650

USDJPY

Bank of Japan (BoJ) Governor Kazuo Ueda indicated that the tolerance band for the benchmark 10-year Japanese Government Bonds (JGB) will widen from 0.5% to 1.0%. The move pushed JGB yields to their highest level since 2014. The 10-year JGB rose to 0.65% on Thursday.
The Bank of Japan intervened in the market for the second time this week to slow the rise in benchmark sovereign bond yields. This move reflects the bank's determination to control sharp fluctuations in rates while allowing them some room to increase. The buying operation had immediate effects on the currency market, weakening the yen, and causing mild choppiness in the Tokyo stock market, which remained lower.
USDJPY found resistance at the 144.00 level and a correction is happening now, but it may be temporary as the next big target is the 145.00 level, which represents the lowest point from where the authorities declared the possibility of an intervention.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
145.00	144.00	142.00	138.70	137.70	135.50

XAUUSD

The ADP National Employment report on Wednesday showed that private-sector employers in the United States (US) added 324K jobs in July, exceeding the anticipated 189K. This indicates continued labor market resilience, potentially shielding the economy from a recession and supporting the Fed's hawkish stance. The expectations are keeping the US Treasury bond yields elevated, leading to the possibility of a further near-term move up for the USD and suggesting a downside for the gold price. Investors have already digested the Fitch downgrade of the US government's credit rating to AA+ from AAA late Tuesday.
Policymakers' defense of US Treasury bonds and hopes for upbeat US economic growth are influencing gold sellers ahead of mid-tier US data related to employment and activities in July. Key data points include US ISM Services PMI for July and second-quarter readings of Nonfarm Productivity and Unit Labor Costs, which are crucial for determining Friday's US Nonfarm Payrolls (NFP) and US Dollar movements.
Additionally, China's positive Caixin Manufacturing PMI is providing support to the XAU/USD price, requiring strong negatives from Beijing to keep the gold bears hopeful.
Gold continues the selloff and finds support at the 1932 level. The negative correlation with the US10Y is high. For any breakout of the actual support level, we find the 1920 followed by the 1900 support levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1982	1970	1960	1940	1932	1920

DAX40

European shares experienced their third consecutive decline on Thursday, mainly influenced by elevated U.S. bond yields and disappointing earnings reports, dampening sentiment before the Bank of England's interest rate decision.
The German DAX index suffered the most significant losses, particularly due to Infineon's 9% drop after the chipmaker predicted a decrease in fourth-quarter revenue amid a mixed picture in the semiconductor market.
London Stock Exchange Group's shares fell 3.5% following the announcement of its first-half numbers.
However, there were some positive developments as well. Shares of Societe Generale, France's third-largest listed bank, surged 3%, and ING Groep, the largest Dutch bank, rose 1.4% after reporting better-than-expected quarterly earnings.
Anheuser-Busch InBev saw a nearly 2% climb after the world's largest brewer reported higher-than-expected second-quarter earnings and maintained its 2023 forecast, supported by China's gradual post-COVID recovery and strength elsewhere.
Globally, stocks faced pressure as U.S. bond yields reached nine-month peaks following robust private jobs data and Washington's announcement regarding the refunding of maturing debt.
DAX continues the selloff and the support level of 15800 is important followed by the 15500.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

Germany's June exports and imports were below expectations, with imports dropping by 3.4% and exports rising only by 0.1%. Both figures contributed to negative annual rates. On Friday, Germany will report factory orders. In the Eurozone, the Producer Price Index (PPI) declined by 0.4% in June, surpassing the expected slide of 0.2%, and the annual rate reached -3.4%. Eurozone Retail Sales data for June is also due to be released.
Regarding the US data released on Thursday, initial Jobless Claims rose to 227,000 for the week ending July 29, as expected. Q2 Unit Labor Costs rose at a rate of 1.6%, which is below the expected 2.6%, and Q1 was revised from 4.2% to 3.3%. On the positive side, factory orders rose by 2.3% in June, aligning with expectations. However, the ISM Services PMI declined from 53.9 to 52.7, falling short of the estimated 53. The market's reaction to these numbers was limited, as the focus is set on Friday's nonfarm payrolls, which are expected to show an increase of 200,000.
The EUR/USD is currently at the 100MA on the Daily chart, finding support while waiting for today's nonfarm payroll data. The next support, if the selloff continues, will be at the historical level of 1.0850. Conversely, if a correction happens, then the next resistance level will be at 1.1000.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The Bank of England has increased its key interest rate by 25 points to 5.25%, as widely anticipated. The hike was supported by eight out of nine members, with two members advocating for a 50-basis point increase.
According to the Bank's updated forecasts, the rate is expected to reach over 6%, a significant increase from the "just over 4%" projected in the May Inflation Report. This response comes as both the market and the central bank address persistent inflation.
Despite the rate hike, the labor market remains tight, and wage growth has stayed at 7.7% from three months to May. However, wage increases have not been sufficient to counter the acceleration in price growth over the past two years, failing to bring inflation back to the target level. Consequently, the Bank of England must continue its tight monetary policy stance, as it had warned in its statement.
The GBP/USD found support at the 1.2650 level waiting for today's data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

JPYUSD

The Bank of Japan (BoJ) has raised concerns about its exit from the record low-interest rate and Yield Curve Control (YCC) policy due to its two unscheduled bond-buying programs and the defense of the easy-money policy. In the US, July nonfarm payrolls are anticipated to increase by 200,000, while unemployment is expected to remain at 3.6% and average hourly earnings are projected to rise by 0.3% m/m and 4.2% y/y. A strong ADP employment report on Wednesday showed a surge of 324,000 private sector jobs in July. Today's NFP data will be crucial for the currency pair, with data surpassing 200,000 being favorable for the dollar and US yields, leading to an increase in the price. Conversely, if the data falls below expectations, it may have an inverse effect.
USDJPY's price action on the Hourly chart indicates a potential double top pattern, suggesting a likely reversal. The next potential support level is expected to be around 142.00. If a breakout occurs to the downside, the price could move towards 141.50, whereas an upward breakout would encounter the next resistance at 144.00.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

According to the latest data from the US on Thursday, Initial Jobless Claims rose to 227,000 for the week ending on July 29, which aligned with the market consensus. Additionally, the ISM Service PMI for July declined to 52.7 from the previous 53.9, falling short of expectations set at 53. Moreover, unit labor costs for Q2 increased by 1.6%, lower than the anticipated 2.6%.
Gold traders will closely monitor the US wage inflation and employment release on Friday. If the report shows stronger-than-expected figures, it could potentially prompt the Federal Reserve (Fed) to raise interest rates further throughout the year. This scenario would benefit the US Dollar (Greenback) but could create headwinds for XAU/USD. It's essential to note that gold tends to be sensitive to rising interest rates as it increases the opportunity cost of holding non-yielding bullion.
Gold reached historically important support in 1930 and has been hovering around this level, waiting for today's important US labor market data to determine its direction. If it breaks below the current support, it could head toward the 1920 support level. The 200MA (200-day moving average) serves as the primary resistance level to monitor.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European stocks stabilized on Friday, recovering from a three-day decline, as a strong outlook from retail giant Amazon and other companies outweighed concerns over global economic growth. The Pan-European STOXX 600 index rose 0.1% by 0723 GMT, though it was still on track for its worst weekly performance in nearly a month.
On Wall Street, futures ticked higher due to Amazon's strong forecast, even as Apple's outlook remained pessimistic ahead of the US payrolls data.
In Europe, French lender Credit Agricole saw a 4.2% increase in its shares, fueled by positive quarterly earnings, driven by robust insurance and consumer finance results. Similarly, Italy's state-owned bank, Monte dei Paschi di Siena, surged 4.8% after reporting earnings that exceeded expectations for the second quarter.
On the downside, media shares were dragged down by WPP, the world's largest advertising group, which fell 7.5% after downgrading its full-year like-for-like growth forecast.
Additionally, Vonovia, Germany's largest real estate group, faced a 1.6% decline as it reported a €2 billion ($2.19 billion) second-quarter loss and wrote down the value of its properties by €3 billion.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

German industrial production dropped by 1.5% in June, surpassing the predicted 0.5% decline, according to data from the federal statistics office. The manufacturing sector in Europe's largest economy is facing challenges amid a downturn. It's expected that the German economy will contract again in the second half of 2023 following a winter recession that ended in the second quarter.

US employment data showed steady JOLTS Job Openings at around 9.6 million in June, with the private sector adding 324K new jobs in July according to the ADP survey. Challenger Job Cuts declined to 23.7K in the same month, and Initial Jobless Claims stood at 227K in the week ending July 28. Preliminary estimates indicated a 3.7% rise in Q2 Nonfarm Productivity and a 1.6% increase in Unit Labor Costs.

In the July Nonfarm Payrolls (NFP) report, the unemployment rate decreased to 3.5% with a participation rate of 62.6%. The US added 187K new jobs in the month, and average hourly earnings rose 4.4% YoY, higher than expected. The US Dollar slightly declined, but the job growth suggests a cooling sector while a shrinking unemployment rate may lead the Federal Reserve (Fed) to maintain its monetary tightening policy.

The EUR/USD corrected towards 1.1040 after Friday's movement and encountered a resistance level. It is now resuming its downward trend, respecting the down channel. The next support levels are 1.0920 and 1.0850. The 100MA on the daily chart is also playing support at the actual levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The Bank of England's decision to increase interest rates has raised concerns about a deepening recession. As a result, the GBP/USD pair has experienced a notable decline due to the potential impact of higher interest rates on the UK's economic outlook. The previously robust labor market is now showing signs of weakening, with companies slowing down their hiring process amid the gloomy economic prospects.

The BoE's aggressive rate-tightening cycle is also affecting the UK's housing sector and strong labor market. However, this move is aimed at stabilizing inflation at 2%. Andrew Bailey, the head of the Bank of England, expresses confidence that inflation will ease to 5% by October, as the central bank plans to maintain "sufficiently restrictive" interest rates for an extended period.

The GBP/USD found support at the 1.2650 level waiting for today's data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The Bank of Japan maintained its negative interest rate policy and stressed the importance of continuing monetary easing to reach its 2% inflation target. During its recent meeting, the bank pledged to adopt a more flexible approach to yield curve control, using upper and lower bounds as references instead of strict limits. However, the bank also acknowledged the potential adverse impact of capping 10-year Japanese government bond yields at 0.5% on bond and financial markets. Nevertheless, it remains committed to supporting wage hikes through continued monetary easing.

The US employment report shows softer-than-expected nonfarm payrolls (NFP) at 187K (vs. 185K prior and 200K forecasted), with an unemployment rate of 3.5% (lower than the expected 3.6%). Average Hourly Earnings reprinted 0.4% MoM and 4.4% YoY. Fed Governor Michelle Bowman's hawkish comments triggered USD/JPY rebound, suggesting potential future rate increases if inflation progress stalls. Atlanta Fed President Raphael Bostic expects restrictive monetary policy until 2024, while Chicago Fed President Austan Goolsbee suggests considering rate-holding duration.

USDJPY came back on Friday towards the 141.50 support level but bounced back up bullishly as the dollar is strong. The next target will be to reach 144.00.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

Friday's underwhelming release of the US Nonfarm Payrolls (NFP) data, combined with mixed signals from the Federal Reserve, caused the US Dollar to retreat from its multi-day high. As a result, the gold price managed to rebound from a support line that had been in place for several days. However, the tone shifted over the weekend due to hawkish comments made by Fed Governor Michelle Bowman, coupled with concerns about China's geopolitical situation, which put downward pressure on XAU/USD.

Additionally, the gold market's consolidation before the expected increase in demand from India, a significant customer for XAU/USD, is also contributing to keeping metal prices down in anticipation of important data and events from the US.

Looking ahead, XAU/USD traders should closely monitor the US Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) for July on Friday to get clearer guidance. If the inflation data turns out to be positive, gold sellers may break the crucial support line established since October 2022, leading to potential disadvantages for the bullish sentiment.

Gold reached the historically important support in 1930 and has been hovering around this level, waiting for today's important US labor market data to determine its direction. If it breaks below the current support, it could head towards the 1920 support level. The 200MA (200-day moving average) serves as the primary resistance level to monitoring.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

In July, German industrial production experienced a 1.5% decline from the previous month, surpassing market expectations for a milder drop. This decline highlights the impact of higher interest rates on European manufacturing, especially after concerning PMI figures. Notably, Siemens Energy saw a significant drop of 5.8%, reaching the bottom of STOXX 600, due to issues at its wind turbine unit that are projected to cost 2.2 billion euros ($2.4 billion). Deutsche Boerse also slipped 1.6% following a downgrade from "buy" to "neutral" by UBS. On a positive note, PostNL rose 5.6% as the Dutch postal firm raised its 2023 operating profit guidance. Additionally, OHB experienced a significant jump of 33% after announcing a voluntary public tender offer by US investment company KKR for its outstanding shares. As expectations grow that the Fed and the European Central Bank are approaching the end of their tightening cycle, investors will closely watch inflation data from Germany, China, and the United States this week.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.
​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

In Germany, the annual inflation rate for July 2023 was officially confirmed at 6.2%. This figure was slightly lower than the 6.4% observed in the previous month and remained close to the 14-month low of 6.1% recorded in May. These numbers indicated a gradual cooling of inflationary pressures within the country. However, the rate continued to significantly surpass the European Central Bank's target of 2.0 percent. Notably, the overall inflation for goods decelerated to 7.0% from 7.3%, primarily due to softer increases in the cost of food, as well as services. The inflation eased slightly (5.2% vs 5.3%).
In the July Nonfarm Payrolls (NFP) report, the Unemployment Rate decreased to 3.5% with a Participation Rate of 62.6%. The US added 187K new jobs in the month, and Average Hourly Earnings rose 4.4% YoY, higher than expected. The US Dollar slightly declined, but the job growth suggests a cooling sector while a shrinking unemployment rate may lead the Federal Reserve (Fed) to maintain its monetary tightening policy.
The EUR/USD is hovering around the 1.1000 resistance level. It is now resuming its downward trend, respecting the down channel. The next support levels are 1.0920 and 1.0850. The 100MA on the daily chart is also playing support at the actual levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The potential for further appreciation of the pound sterling (GBP) appears limited due to the Bank of England (BoE) raising interest rates. This move is putting additional strain on various sectors in the United Kingdom, such as housing, employment, and manufacturing. The GBP/USD pair is facing downward pressure because BoE policymakers are indicating the possibility of more tightening measures to bring inflation back to the 2% target.
BoE's Pill expresses confidence that the UK's inflation will ease to 5% within the current year, and the anticipated rate will be reached in the first half of 2025. However, there is a risk that as the British economy strives for 2% inflation, it might enter a recession. Moving ahead, the focus will be on the Q2 Gross Domestic Product (GDP) data.
The GBP/USD found support at the 1.2650 level waiting for GDP data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

Japan experienced a 4.2% year-on-year decrease in household spending during June, a sharper drop compared to the 4% decline recorded in May. This marked the fourth consecutive month of decline, as per official data. Among household spending categories, food remained the largest expense, while the most significant reduction was observed in spending on furniture and household utensils, which decreased by 17.6% year-on-year. Also, most officials from BOJ stressed the need to maintain the current monetary policy in place. At the same time, one member suggested that inflation would remain at 2% “in a sustainable and stable manner seems to have clearly come in sight.
USDJPY came back on Friday towards the 141.50 support level but bounced back up bullishly as the dollar is strong. The next target will be to reach 144.00.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

The US Dollar found support in the hawkish remarks made by US Federal Reserve (Fed) Governor Michelle Bowman, along with the rise in US Treasury bond yields. Speaking at an event in Atlanta on Monday, Bowman mentioned, "I will be monitoring evidence of a consistent and meaningful decrease in inflation as I assess the need for potential further increases in the federal funds rate and the duration that the federal funds rate should remain at a suitably restrictive level."
Based on the CME Group's FedWatch Tool, approximately 86.5% of market participants anticipate that the central bank will refrain from raising interest rates in September. Investors still hold optimism for a final Fed rate hike within the year, pending the release of the Consumer Price Index (CPI) data from the United States on Thursday to validate any expectations of a forthcoming Fed rate increase. The renewed demand for the US Dollar caused a decline in the price of gold, pushing it toward multi-month lows.
Although the US10Y yield is decreasing, which could potentially benefit gold, at present, the dollar holds a more favorable position.
Gold reached historically significant support in 1930 and has been hovering around this level, waiting for today's important US labor market data to determine its direction. If it breaks below the current support, it could head toward the 1920 support level. The 200MA (200-day moving average) serves as the primary resistance level to monitoring.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

Dax40

European stocks saw a decline on Tuesday due to pressure on Italian banks following the approval of a 40% windfall tax by the cabinet. Additionally, there were negative impacts from Germany's sticky inflation data and weak trade numbers from China, which dampened risk sentiment.
Italian banks like Intesa Sanpaolo (ISP) and UniCredit (UCG) experienced over a 5% decrease, prompted by Deputy Prime Minister Matteo Salvini's announcement that the new levy on banks' excess profits would fund various initiatives, including reducing the tax burden, implementing tax cuts, and offering financial aid to first-home mortgage holders.
Italy's FTSE MIB (FTSEMIB), which heavily relies on banking, slid by 1.4%, while European banks (.SX7P) suffered a 1.8% drop in response to Moody's credit rating cuts for several smaller to mid-sized U.S. banks. Moody's also indicated potential downgrades for major US lenders.
Germany's DAX index (DAX) experienced a 0.4% decline after data revealed that inflation had eased to 6.5% in July, aligning with economists' predictions.
China-linked mining and automotive companies (.SXPP and .SXAP) saw a decrease as imports and exports in the second-largest global economy fell significantly in July, putting pressure on Beijing to consider additional stimulus to sustain growth prospects.
Global miner Glencore's shares (GLEN) slumped by nearly 3% after reporting a 50% reduction in earnings for the first half of the year.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[zForex]

EURUSD

The German Harmonized Index of Consumer Price (HICP) matched the market consensus at 6.5%, while the Eurozone Sentix Investor Confidence improved from -22.5 in July to -18.9 in August, aligning with the expected -23.4. Moody's downgraded credit ratings for small to mid-sized US banks, warning of possible cuts to larger institutions due to increased recession risk from higher interest rates. This pressure urges adjustments in finance and real estate after the pandemic. Additionally, sluggish economic rebound and subdued global demand reflect in US trade data. With mostly dovish comments from Fed officials, attention shifts to the upcoming US inflation report as the central bank watches price data until the September policy meeting.
The EUR/USD price action indicates a double bottom, suggesting uncertainty regarding the current level and a clustering of prices at this point. The upcoming support levels are situated at 1.0920 and 1.0850. Furthermore, the 100MA on the daily chart is providing support at the present levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The potential for further appreciation of the pound sterling (GBP) appears limited due to the Bank of England (BoE) raising interest rates. This move is putting additional strain on various sectors in the United Kingdom, such as housing, employment, and manufacturing. The GBP/USD pair is facing downward pressure because BoE policymakers are indicating the possibility of more tightening measures to bring inflation back to the 2% target.
The UK manufacturing sector in June will face close examination. The performance of British factories and the preliminary GDP for the April-June quarter will be closely monitored due to the strict policy environment. Observers are curious about whether the economy can steer clear of a recession. In the meantime, reports from the BoE Pill and the National Institute of Economic & Social Research (NIESR) suggest that UK PM Rishi Sunak will indeed deliver on his commitment to reduce inflation to 5% by the close of 2023.
The GBP/USD found support at the 1.2650 level waiting for GDP data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The improvement in China's factory-gate inflation, along with positive news from the Biden Administration, has eased market pessimism and given a break to buyers of the yen pair. Previously, negative factors like Italy's surprise tax on bank profits, downgrades of US banks, UK recession fears, and China's economic slowdown weighed on sentiment, affecting USD/JPY. Additionally, concerns about US and Japanese Treasury bond yields, tensions between Japan, China, and the US, as well as the Bank of Japan's easy-money policy impact the USD/JPY pair. The ongoing low bond yields and the weakened US Dollar Index contribute to these dynamics. Looking ahead, the pair might consolidate gains ahead of key economic data releases.
USDJPY is influenced by the ongoing dollar correction, with the median line on the extended bullish trend serving as noticeable resistance, particularly evident on the daily chart.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

The improvement in China's Producer Price Index (PPI), which measures factory-gate inflation, along with positive news from the Biden Administration reported by Bloomberg, has helped counter the market's previous pessimism. Despite the downbeat China Consumer Price Index (CPI), these factors have contributed to a more positive outlook.
However, Italy's unexpected imposition of a tax on bank windfall profits and the global rating agencies' downward revision of US banks and financial institutions negatively impacted sentiment on Tuesday. This led to a decrease in the gold price, pushing it closer to the lowest point for the month. Additionally, concerns about a potential UK recession and China's slowing economic growth, along with geopolitical tensions between Beijing, Japan, and the US, have further contributed to the overall sentiment.
Looking ahead, the absence of significant data or events might lead gold traders to consolidate their weekly losses before the crucial US Consumer Price Index (CPI) data is released on Thursday. Depending on whether the US inflation data suggests a reduction in price pressure, there is a possibility that the XAU/USD (gold to US dollar) pair could see an extension of its recent rebound.
Gold continues to decline, following a bearish trend where the price is trading above the median line. The median line has been acting as a support level for the past three instances of lower lows in price movements.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European shares rose on Wednesday, with Italian lenders rebounding from sharp losses in the previous session after the government eased its stance on a new banking levy.
Eurozone bank stocks (SX7E) rebounded by 1.4% following a 3.5% decline the previous day. This uptick was due to Italy's decision to limit the new tax to 0.1% of total bank assets, in contrast to the initial surprise announcement of a 40% windfall tax that had triggered a sell-off.
Italian financial institutions like Intesa Sanpaolo (ISP), Banco BPM (BAMI), and UniCredit (UCG) experienced gains ranging from 1.7% to 2.5%.
Investors seemed to overlook data indicating deflation in China's consumer sector and continued declines in factory-gate prices for July. Despite these indicators, the world's second-largest economy struggled to reignite demand.
Regarding specific stocks, Delivery Hero (DHER) saw a 5.8% increase as the German online food delivery company raised its full-year revenue projection.
Novo Nordisk (NOVO_B) inched up by 0.5%, extending its momentum from Tuesday when the Danish pharmaceutical company's shares reached a record high. This surge followed news that its obesity drug reduced the risk of heart disease.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200