Daily Market Analysis By FXOpen

The EUR/USD Rate Set a 16-Week High
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According to the EUR/USD chart, the euro to dollar exchange rate yesterday surpassed the peak from early June, rising above 1.092 – the last time the price was at this level was on March 21.

Bullish sentiments in the market were supported by:

→ Approaching Thursday's meeting of the European Central Bank – it is expected that interest rates will remain unchanged. However, attention will be focused on comments from its president Christine Lagarde regarding the timing of the next interest rate cut.

→ Expectations of rate cuts by the Federal Reserve in September. As Reuters reports, Powell stated yesterday that economic indicators in the US for the second quarter "to some extent bolster the confidence" that inflation is returning to the target level in a sustainable manner.

As we mentioned in our analytical review of the EUR/USD chart on July 1:

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Insiders Are Selling Shares of Large Companies
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Yesterday, the S&P 500 stock index (US SPX 500 mini on FXOpen) set another historical high, closing near the 5650 level.

However, similar records are not observed on the charts of rally leaders from the first half of 2024 – NVDA's price is 8.6% below its historical high, MSFT is 3.1% lower, and GOOGL is 2.6% below its record.

And this isn't the only cause for concern. Insider sales, as indicated by reports to the SEC, could add to anxieties. For instance:

→ Bezos sold over $900 million worth of AMZN shares;

→ Nvidia board member Mark Stevens continues to sell NVDA shares, as does company CEO Jensen Huang.

According to Goldman Sachs, fund managers have increased their long positions in US stock index futures to record levels.

And according to a July survey of fund managers conducted by Bank Of America:

→ Market sentiment remains bullish amid expectations of a Fed rate cut and a soft landing for the economy;

→ Geopolitics now pose the biggest risk to markets, followed by inflation.

If professional market participants foresee further growth in the stock index, it might not be driven by shares of large companies.

On June 27, we discussed the bullish "cup and handle" pattern near the $190 level on the AMZN price chart. Since then, bulls have shown the ability to push the price towards the psychological level of $200, but they have not managed to sustain this success.

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The Nikkei Index Has Risen To a Two-Month High
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As we reported on 26th June, analysing the Nikkei 225 chart (Japan 225 on FXOpen):

→ The price is in a significant upward trend (shown by the blue channel);

→ The price may continue to rise along the median line.

Since then, the Nikkei 225 index (Japan 225 on FXOpen) has increased by more than 6%, reaching a yearly high on 10th July above 42,500 points. The price particularly surged on 9-10 July, breaking resistance at 41,160 (formed from the previous peak at the end of March).

However, the bears made a strong comeback afterwards, pushing the price back to the 41,160 level. Thus:

→ Completely offsetting the gains from 9-10 July;

→ Forming a bearish engulfing pattern spanning 4 candles;

→ Prompting consideration that the breakout above 41,160 was false (a trap for bulls).

According to Reuters, bearish drivers included technology stocks such as Tokyo Electron, which saw a more than 6% decline in one day, following sell-offs in US technology stocks (as reported on 12th July).

Sentiment in the Japanese stock market is also influenced by risks of interventions by the Bank of Japan to support the yen.

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Analysis of USD/JPY: Was There an Intervention?
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Yesterday’s news of slowing inflation in the US sharply weakened the dollar, anticipating the Federal Reserve’s monetary easing. In the first 15 minutes after the data release:

→ EUR/USD rose by approximately 0.45% to the psychological level of 1.09;

→ GBP/USD increased by approximately 0.55%, reaching a 2024 high.

Conversely, USD/JPY fell, with a more aggressive movement. As the chart shows, the dollar weakened against the yen by about 1.8% in the first 15 minutes after the release. This suggests that amidst the US news, the Bank of Japan intervened to support its currency, which hadn’t fallen below 160 yen per USD since June 26.

Reuters reports that Tokyo’s chief currency diplomat, Masato Kanda, stated on Friday that authorities would take necessary measures in the currency market but declined to comment on whether they had intervened.

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The Nasdaq 100 Index Fell Despite Positive Inflation News
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Yesterday, Consumer Price Index (CPI) values were published, indicating a slowdown in the rate of inflation in the USA. According to ForexFactory:

→ CPI month-on-month: actual = -0.1%, forecast = 0.1%, previous month = 0.0%;

→ CPI year-on-year: actual = 3.0%, forecast = 3.1%, previous month = 3.3%.

The data confirming the slowdown in inflation raised expectations that the Federal Reserve might lower interest rates as early as September. But why did the Nasdaq 100 (US Tech 100 mini on FXOpen) drop then? Yesterday, the tech stock index fell by over 2.1%, marking its worst day since early May.

The reason lies in rotation. Investors seem to have shifted their focus from the highly inflated tech stocks since the start of 2024 to other sectors. Approximately 400 companies in the S&P 500 index (US SPX 500 mini on FXOpen) showed growth. Meanwhile, the Dow Jones Industrial Average (Wall Street 30 mini on FXOpen) closed in the green yesterday.

Bloomberg reports that Kelly Cox from Ritholtz Wealth Management believes this day could be a turning point for the markets. It also serves as a good reminder of the importance of diversification.

One of the drivers of yesterday's decline was NVDA shares, which fell by more than 5% in a day (we wrote about the bearish behaviour of Nvidia’s price and volumes just the day before).

What’s next?

The equal-weighted version of the S&P 500, where stocks like Nvidia have the same weight as Dollar Tree Inc., rose yesterday. This version of the index is less sensitive to the influence of large tech companies, making a case for the rally expanding to other stocks.

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Market Analysis: GBP/USD Eyes 1.3000 While EUR/GBP Struggles
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GBP/USD is gaining pace above the 1.2900 resistance. EUR/GBP declined and is now consolidating losses above the 0.8400 region.

Important Takeaways for GBP/USD and EUR/GBP Analysis Today

• The British Pound is attempting a fresh increase above 1.2950.
  
• There is a key bullish trend line forming with support near 1.2910 on the hourly chart of GBP/USD at FXOpen.
  
• EUR/GBP is trading in a bearish zone below the 0.8440 pivot level.
  
• There was a break above a connecting bearish trend line with resistance near 0.8425 on the hourly chart at FXOpen.
  

GBP/USD Technical Analysis
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On the hourly chart of GBP/USD at FXOpen, the pair remained well-bid above the 1.2750 level. The British Pound started a decent increase above the 1.2850 zone against the US Dollar.

The bulls were able to push the pair above the 50-hour simple moving average and 1.2900. The pair even climbed above 1.2925 and traded as high as 1.2949. Recently, there was a minor decline below the 23.6% Fib retracement level of the upward move from the 1.2775 swing low to the 1.2949 high, but the bulls were active above 1.29700.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

PepsiCo Stock Rebounds from Yearly Low Ahead of Earnings Report
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The PepsiCo stock chart indicates:

→ Yesterday, the price dropped below $161, setting a new low for 2024.

→ However, by the end of the trading day, the price rose above $163.3, closing near the day's high.

This bullish intraday behaviour might suggest positive sentiment emerging ahead of today's earnings report.

According to Dow Jones Newswires:

→ PepsiCo's management anticipates organic revenue growth of 4% and an 8% increase in earnings per share in 2024.

→ The consensus among analysts tracked by FactSet is a 3% rise in sales and a 7% increase in earnings.

PepsiCo's stock has fallen by 9% over the past two months. Investors are concerned that demand might suffer due to rising prices from inflation and the growing popularity of weight-loss drugs, which could curb people's cravings for snacks and sugary drinks.

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GBP/USD Hits Four-Month High Following GDP Growth News
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day, the UK Office for National Statistics published data showing an increase in GDP.

According to Forex Factory:

→ A month ago, GDP was at 0.0% month-on-month;

→ This month, analysts had forecasted growth of 0.2%;

→ Actual growth reached 0.4%.

This news should be welcomed by the Labour Party, which has come into power with ambitious plans for economic development.

On the other hand, how will the Bank of England respond? The GDP growth might provide an argument for maintaining high interest rates for a longer period to ensure that fears of a new inflationary surge do not materialise.

As Bloomberg reports, markets currently assess the likelihood of a rate cut at the next Bank of England meeting on 1 August at just under 50%.

Financial markets reacted with a rise in the sterling's value against other currencies. The GBP/USD rate is at its highest level since early March.
Will the Growth Continue?

The GBP/USD chart shows that the price is in a rally, having risen by 1.7% since the beginning of July.

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Markets Awaiting US Inflation Data: What is the Probability of Trend Reversals?
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The major currency pairs are in a holding pattern following the release of the latest US labour market data and Jerome Powell's testimony before Congress. The Fed Chair noted that the Federal Reserve has made "significant progress" in its mission to combat inflation, but emphasized the need for "more good data" before lowering interest rates. Judging by the movements of the major currency pairs, the market appears sceptical of the Fed Chair's statements:

• The AUD/USD pair has refreshed the May highs of the current year and strengthened above 0.6700.
  
• The USD/CAD pair is trading near strategic support at 1.3610.
  
• The GBP/USD pair is approaching the March highs near 1.2900.
  

As we can see, the US dollar is slowly but surely losing ground in many directions, but by the end of the week, existing trends could either slow down or change direction dramatically.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Market Analysis: EUR/USD Jumps, USD/JPY Bulls Seem Unstoppable
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EUR/USD is climbing higher above the 1.0800 level. USD/JPY surged above the 160.00 and 161.40 resistance levels.

Important Takeaways for EUR/USD and USD/JPY Analysis Today

• The Euro started a decent increase above the 1.0780 pivot level.
  
• There is a key bullish trend line forming with support near 1.0820 on the hourly chart of EUR/USD at FXOpen.
  
• USD/JPY climbed higher above the 160.50 and 161.40 levels.
  
• There is a connecting bullish trend line forming with support near 161.55 on the hourly chart at FXOpen.
  

EUR/USD Technical Analysis
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On the hourly chart of EUR/USD at FXOpen, the pair started a fresh increase from the 1.0710 zone. The Euro cleared a few key hurdles near 1.0780 to move into a positive zone against the US Dollar.

The pair settled above the 1.0800 level and the 50-hour simple moving average. A high was formed at 1.0845 and the pair is now consolidating gains. There was a test of the 23.6% Fib retracement level of the upward move from the 1.0710 swing low to the 1.0845 high.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Analysts Raise NVDA Forecasts, Stock Price Rises
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According to FactSet, in July, seven reputable analysts have raised their target prices for NVDA stock. KeyBanc analyst John Vinh, for instance, increased his target from $130 to $180 (approximately 33% above the current price).

Following these target increases, Nvidia's stock has risen, closing above the psychological level of $130 yesterday for the first time since June 20. Consequently, NVDA's price has increased by more than 160% since the start of the year.

Will Nvidia's rally continue?

The NVDA chart data raises doubts about the stock's ability to confidently set new historical highs as it did in the first half of the year.
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Analysis of NZD/USD: The "kiwi" sharply fell after the central bank's decision
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The Reserve Bank of New Zealand (RBNZ) kept the interest rate unchanged at 5.5% on Wednesday.

The decision to maintain the interest rate was anticipated. However, market participants noted a shift in the tone of the RBNZ's official statements. In May, the bank indicated that the tight policy would continue as long as necessary, but now it is open to easing the restrictive monetary policy if inflation slows down.

As a result, market participants are now considering the possibility of a nearer-term rate cut, which led to a decline in the New Zealand dollar relative to other currencies.

Specifically, against the US dollar, the "kiwi" fell by approximately 0.75%.

Will the decline continue as the situation develops?

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American Currency Adjusts Ahead of Jerome Powell’s Speech
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A rather weak employment report, published late last week, contributed to the weakening of the American dollar. According to the published data:

• The unemployment rate in June increased to 4.1% (experts’ forecast: 4.0%);
  
• The actual number of new jobs was slightly higher than analysts predicted (206K vs 191K).
  

According to Bloomberg Economics experts, the US labour market is starting to slow down significantly, which could prompt the Federal Reserve to cut rates as early as the September meeting. It is quite possible that more clues about the Fed’s future monetary policy will be provided to market participants by the end of the week, as important press conferences and macroeconomic data releases are expected in the upcoming trading sessions.

USD/JPY
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Technical analysis of the USD/JPY pair indicates the possibility of a continued downward correction, as a "bearish engulfing" pattern has formed on the daily timeframe. The pattern can be considered partially worked out, as the price has decreased by more than 100 pips and has almost tested the significant support at 160.00 since it formed on the chart.

The price behaviour in the 160.30-159.80 range will demonstrate the sellers' strength. If the price consolidates below this range, the downward movement may resume with renewed vigour. Conversely, if the pair rises above 162.00, it could lead to the start of a new upward impulse.

The following events could impact the pair's price:

• Today at 17:00 (GMT +3): Speech by Federal Reserve Chairman Jerome Powell;
  
• Today at 17:00 (GMT +3): Speech by US Treasury Secretary Janet Yellen.
  

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XAU/USD Analysis: Gold Price Falls from Six-Week High
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As shown by the XAU/USD chart, on Friday, 5 July, the price of gold rose above the $2390 level for the first time since 22 May. According to Reuters, this increase occurred following the release of key US employment data, which indicated a softening labour market, raising expectations of a Federal Reserve interest rate cut in September.

However, yesterday, Monday, the gold price fell to $2360 per ounce – the level from which Friday's ascent began. This suggests that the bulls were unable to maintain control over the market, which indicates a bearish sign.
Could the Gold Price Decline in the Coming Days?

From a technical analysis perspective of the XAU/USD chart:

• The gold market has clear support around the $2300 area. Each time the price fell below this level in June (as indicated by arrows), it quickly rebounded upwards, demonstrating sustained demand.
  
• Price action since April provides enough reference points to establish a descending channel (shown in red). The recent bearish reversal returned the price within this channel, reinforcing resistance from its upper boundary.
  
• There is also reason to believe that the bullish breakout of local resistance (shown in black) might be false.
  

Therefore, signs of seller activity in the $2380-2400 range suggest that the gold price could continue to decline towards the important support at $2300.

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Brent Crude Oil Price Hits the Highest Level Since 1 May
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Analysing the oil price on 19th June, we wrote that:

→ Amidst increasing demand for oil during the holiday season, Goldman Sachs analysts suggested that by the end of summer, the Brent price could rise to $86 per barrel with an upper limit around $90.

→ The price could reach the upper boundary of a narrowing triangle that originated in 2022-2023 – technically, this is a significant resistance level.

As the Brent crude oil price chart (XBR/USD) shows, the price has reached the upper boundary of the triangle since then. How will events unfold from here?

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The EUR/GBP rate fluctuates under the influence of political factors
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On 10th June, we wrote that the EUR/GBP rate fell to a 21-month low after the European Parliament elections. Political fundamental factors continue to influence this pair.

As Reuters reports:

→ The euro is down on Monday amid unexpectedly strong results for the left-wing forces in the French elections, which has created new uncertainty regarding the country’s financial outlook.

→ The pound sterling has risen to a 3.5-week high against the US dollar, as the British currency strengthens following the Labour Party’s decisive victory in last week’s elections, ending 14 years of Conservative rule.

Therefore, it is not surprising that a bearish gap formed on the EUR/GBP chart at the start of the week – however, bulls managed to recoup the decline during the Asian session. How will events unfold from here?

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FTSE 100 Index Behaves Bullishly Amid Elections
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On Friday, the FTSE 100 index rose by 0.4% to 8273 points, continuing its 0.9% rise on Thursday. According to Trading Economics, the centre-left Labour Party, as expected, won the parliamentary elections and secured a majority, ousting the Conservative Party after 14 years in power.

The Labour Party emphasised the importance of economic stability in its decisions and committed to strict budgetary spending rules.

Prime Minister Sunak conceded defeat, and the UK stock market positively received the official election results. As shown by the chart, the FTSE 100 index (UK 100 on FXOpen) has risen by approximately 1.9% from the July 2nd low.

However, the situation remains unfavourable for the bulls.

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GOOG Stock Sets Historic Record
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As the chart shows, the GOOG stock price yesterday surpassed the June 27th high and set a historic record at $185.88.

What contributed to this?
→ Overall bullish sentiment in the US stock market. Incidentally, the S&P 500 index (US SPX 500 mini on FXOpen) also set a historic record yesterday;
→ Positive market expectations ahead of the second-quarter earnings report from Alphabet (Google's parent company);
→ Benzinga reports positive prospects, particularly highlighting the development of YouTube and language models.

Out of 38 analysts surveyed by TipRanks, 32 recommend buying Google stock. The average price forecast is $199 in 12 months.

But why then is Alphabet CEO Sundar Pichai selling over $4 million worth of company shares? According to the Form 4 filed with the SEC, Sundar sold a total of 22,500 shares.

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US Dollar Consolidates Ahead of Nonfarm Payrolls: Possible Scenarios
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In anticipation of the release of one of the most important reports, the NonFarm Payrolls, the US currency has suffered losses across almost all fronts. Earlier this week, the EUR/USD currency pair tested and settled above 1.0800, GBP/USD traded above 1.2700, and USD/CAD fell back to 1.3610.

Today, we might see either continued corrective pullbacks or a resumption of medium-term trends if the employment data deviates from expectations. So, what should we expect?

• Experts forecast a decline in average earnings to 0.3% (if the figure comes in at last month's level or higher, it could strengthen the US currency).
  
• The number of new jobs in June is expected to be 194K (if the figure is significantly higher or lower than the forecast, it could cause volatility in major currency pairs).
  

USD/CAD

Dollar buyers in the USD/CAD pair failed to overcome resistance at 1.3750. A rebound from this level led to the formation of a "bearish engulfing" pattern on the daily timeframe. According to the technical analysis of USD/CAD, the price has approached the lower boundary of the medium-term flat corridor at 1.3610. If the price consolidates below this level in the coming trading sessions, the downward movement could continue towards 1.3520-1.3480. A rebound from 1.3610 could lead to a retest of 1.3700-1.3660.
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Market Analysis: Gold and Oil Prices Soar, More Gains Ahead?
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Gold price started a fresh increase above the $2,342 resistance level. Crude oil prices are gaining bullish momentum and might soon test $85.00.

Important Takeaways for Gold and Oil Prices Analysis Today

• Gold price started a steady increase from the $2,320 zone against the US Dollar.
  
• A connecting bullish trend line is forming with support near $2,355 on the hourly chart of gold at FXOpen.
  
• Crude oil prices extended gains above the $82.00 and $83.00 resistance levels.
  
• There is a key bullish trend line forming with support at $82.75 on the hourly chart of XTI/USD at FXOpen.
  

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price found support near the $2,320 zone. The price formed a base and started a fresh increase above the $2,330 level.

There was a decent move above the 50-hour simple moving average and $2,335. The bulls pushed the price above the $2,355 resistance zone. Finally, the bears appeared near $2,365. A high was formed near $2,364.89 and the price is now consolidating gains.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Market Analysis: AUD/USD and NZD/USD Set for Steady Gains
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AUD/USD is correcting gains from the 0.6735 zone. NZD/USD is showing positive signs and might attempt a fresh increase above 0.6120.

Important Takeaways for AUD USD and NZD USD Analysis Today

• The Aussie Dollar started a downside correction from 0.6735 against the US Dollar.
  
• There is a key bullish trend line forming with support at 0.6700 on the hourly chart of AUD/USD at FXOpen.
  
• NZD/USD is gaining pace above the 0.6100 support zone.
  
• There is a major bullish trend line forming with support at 0.6100 on the hourly chart of NZD/USD at FXOpen.
  

AUD/USD Technical Analysis
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On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from the 0.6635 support. The Aussie Dollar was able to clear the 0.6680 resistance to move into a positive zone against the US Dollar.

There was a close above the 0.6700 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6735 zone. A high was formed near 0.6733 and the pair is now correcting gains.

There was a move below the 0.6720 level. The pair declined below the 23.6% Fib retracement level of the upward move from the 0.6634 swing low to the 0.6733 high. On the downside, initial support is near a key bullish trend line at 0.6700.

The next major support is near the 50% Fib retracement level of the upward move from the 0.6634 swing low to the 0.6733 high at 0.6680.

If there is a downside break below the 0.6680 support, the pair could extend its decline toward the 0.6660 level. Any more losses might signal a move toward 0.6635.

On the upside, the AUD/USD chart indicates that the pair is now facing resistance near 0.6720. The first major resistance might be 0.6735. An upside break above the 0.6735 resistance might send the pair further higher.

The next major resistance is near the 0.6760 level. Any more gains could clear the path for a move toward the 0.6800 resistance zone.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

USD/CAD Breaks Key Support
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On 25 June, we noted that the USD/CAD price had approached a crucial support level—the lower boundary of a converging triangle, which indicated a relative balance of supply and demand in the market during May.

Since then, the price has bounced twice from this level (as indicated by the arrow).

Today, as the USD/CAD chart shows, the exchange rate is breaking through this key support, indicating a disruption in balance.

This has been influenced by the weakness of the USD. According to Reuters, the US dollar has declined relative to other currencies due to weaker-than-expected US economic data released on Wednesday. These included a weak ISM Services PMI report and the ADP Non-Farm Employment Change report, which might suggest an economic slowdown.

How might the Canadian dollar's exchange rate change relative to the US dollar?

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

S&P 500: Mid-Year Prospects Analysis
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As shown by the daily chart of the S&P 500 (US SPX 500 mini on FXOpen):

→ Since the beginning of 2023, the price has been moving in an upward blue channel. To date, the increase has been over 42%;

→ Since the start of 2024, the price has formed a steeper upward channel (shown in orange). In the first half of the year, the growth has exceeded 14%.

How realistic is it for bullish sentiment to persist? And what might the index quotations be by the end of 2024?

Yahoo Finance reports a decidedly bearish outlook for the S&P 500 (US SPX 500 mini on FXOpen) at the end of 2024, held by Marko Kolanovic, the chief strategist at JPMorgan Chase & Co. He cites the following factors:

→ Economic slowdown;

→ Downward revision of company profits;

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TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.