Fundamental Analysis
Market Summary
Wall Street rallied in the last session as investors anticipate earnings reports from mega-caps including Alphabet and Tesla, due later today. Mitigated U.S. political uncertainty and renewed confidence in the U.S. economy, especially if Donald Trump is re-elected in the upcoming presidential election, have bolstered the equity market’s upward momentum.
In the forex market, the dollar index (DXY) remained relatively quiet, failing to break its next resistance level at 104.45, and is awaiting a catalyst for a breakout. Meanwhile, currencies from Oceania, including the Aussie and Kiwi, have weakened significantly. Market anticipation of rate cuts from their respective central banks and concerns over China’s lacklustre economic performance have weighed heavily on both currencies.
In the commodity market, gold slid to its lowest level in a week before climbing back above $2,400, while oil prices continued to trade within a bearish trajectory. Traders are also looking ahead to the eurozone and UK PMI readings, due tomorrow, to gauge the strength of the Sterling and the euro, both of which have lacked a catalyst in recent sessions.
Current rate hike bets on 31st July Fed interest rate decision:
Source: CME Fedwatch Tool
0 bps (93.3%) VS -25 bps (6.7%)
Market Overview
Economic Calendar
(MT4 System Time)
DOLLAR_INDX, H4
The Dollar Index, which trades against a basket of six major currencies, remained flat as investors digested the news of Biden’s withdrawal and awaited several crucial economic events. The upcoming week promises to be eventful, with key economic indicators set to be released. The focus will be on the preliminary GDP data for the second quarter, with many economists expecting an uptick. Additionally, the Personal Consumption Expenditures (PCE) data, a preferred inflation gauge for the Fed, will be released on Friday.
The dollar index is trading higher while currently testing the resistance level. However, MACD has illustrated diminishing bullish momentum, while RSI is at 51, suggesting the index might experience technical correction since the RSI retreated sharply from overbought territory.
Resistance level: 103.90, 104.40
Support level: 104.05, 102.80
