Categories
Forex Market Analysis

July 2 – Daily Update on S&P500 & Gold – NFP Week Begins

On the first day of the 3rd quarter, the financial markets remained heavily volatile in the wake of trade war sentiments. For instance, gold slid more than 1% to its lowest ahead of the U.S. holiday, as the dollar recovered. Whereas, the indices inducing SPX, DAX and Nikkei plunged due to ongoing U.S.-European Union trade war. In addition to this, the July 6 trade war tensions have helped the risk sentiment to stay off.  

 

Later this week, we have another series of high impact economic events coming out of the market. Let’s take a quick look.

 

Top Economic Events to Trade

AUD – Building Approvals m/m – 1:30 (GMT)

AUD – RBA Rate Statement – 4:30 (GMT)

AUD – Cash Rate – 4:30 (GMT)

GBP – Construction PMI – 8:30 (GMT)

 

Gold – XAU/USD – Daily Outlook

The precious metal gold is trading at 1242, down 11.60 points and 0.92% on Monday. One of the main reasons behind the bearish trend is the stronger dollar.

 

The greenback continued its ascent as traders boosted their bets that the U.S. administration would prove better in a trade war as compared to some of its trading rivals. The U.S. tariffs on $34 billion worth of Chinese imported goods are due for July 6.


 

Support     Resistance 

1240.83    1247.17

1238.87    1249.13

1235.7    1252.3

Key Trading Level:    1244

         

SPX  – S&P500-  Technical Outlook

SPX is trading bullish at 2727, up 5.75 points and 0.21%. On the 4- hour chart, the bullish trendline is extending a support near 2679. While the resistance predominates at 2732 and 2745 today. The main trend is up as per the daily swing chart. But, momentum is trending lower. A trade through 2679.25 will convert the main trend (bullish) into the bearish bias.

 

Overall, the main trading range of SPX is 2595 to 2796. The index is currently testing the upper or 50% level of this range at 2795.75.



 

Support     Resistance 

2705.72    2719.32

2701.52    2723.52

2694.72    2730.32

Key Trading Level:    2712.52
Categories
Forex Market Analysis

How the US-China Trade War “On Hold” Affected the Market

 

 


News Commentary


 

US Secretary of the Treasury Steven Mnuchin said the US trade war with China is “on hold”. Investors now hope that this particular pause will be more remarkable than previous attempts to rebalance trade tensions.

The statement also said “consensus on taking effective measures to substantially reduce” US trade deficit in goods with China. And, China agreed to “significantly increase purchase” of US goods and services.

That automatically affected the Yen as risk appetite has returned, which made the Japanese currency lose its bright future as a safe haven.

On the other side, the Australian & New Zealand Dollars found their momentum as traders return to desire more risks.

The National Australia Bank pushed back their forecast of an RBA rate increase within 2018. Their next move’s expectation is now relocated from November to May 2019. That change put them back in line with market pricing.

RBA chief economist Alan Oster announced that the “change reflects the fact there is no sign yet of stronger wages growth, and unemployment has been stuck around 5.5% for the best part of a year.” Also, he explained that once the tightening cycle begins “further rate increases will be very gradual”. And after the first May 2019 increase, the next one will be “not until November 2019”.

 

 


Chart Analysis


 

US INDEX

On the daily chart, the price has bounced from the resistance of 93.6 with a pin bar.

A BAT harmonic pattern boosts the continuation of the bearish momentum. Divergence on RSI assured this possible downfall.

The price is expected to fall as a retracement to the support 92.6.


 

 

AUD/JPY

On the daily chart, as we expected, the price reached the resistance zone at 84-84.35 and continued by shaping a head & shoulders reversal pattern.

If the price could break this zone to activate the pattern, it may reach the second area at 85.45-85.95