Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
Currencies, stocks, commodities: trade ideas for July 5-9
The OPEC meeting and the US Nonfarm Payrolls rocked the market last week. The market is torn between optimism about the global economic recovery and concerns about the new coronavirus strains. How will this impact various financial assets in the days ahead?
Events to watch on July 5-9
- Notice that US markets will be closed on Monday, July 5, due to the Independence Day holiday. Check the changes in the trading schedule: the holiday will affect not only US stocks, but also US30, US500, US100, WTI, BRN, XAU/USD, and XAG/USD.
- G20 finance ministers and central bankers will meet in person in Venice on Thursday and Friday. The meeting will offer them a chance to give an assessment of the global economic rebound. The major risk to the latter is still the relapses in the pandemic.
Check the economic calendar for more news.
Trade ideas for July 5-9
All major currency pairs — EUR/USD, GBP/USD, USD/JPY, and others — are testing important technical levels. The upcoming events will show if the prices are able to enter new areas. The minutes of the Federal Reserve’s June meeting will come out on Wednesday, and traders will be eager to see whether the USD rises as it did after the meeting itself. The heads of the ECB and the BoE will speak on Friday.
Nonfarm Payrolls (NFP) in the US rose by 850,000 in June, better than the market expectation of 700,000. Unemployment rate went up to 5.9%, compared to analysts' estimate of 5.7%, and the Average Hourly Earnings increased by 0.3% on a monthly basis as expected. All in all, the figures are fine, but the USD weakened after the release, probably as traders tok profit on the previous longs.
Pay attention to the bearish engulfing pattern on the D1 chart USD/JPY: a correction to 110.65/30 is now likely. EUR/USD has managed to close above 1.1850 but an advance above 1.1875 and 1.1920 is needed to open the way higher.
AUD/USD awaits the Reserve Bank of Australia’s decision on Tuesday. The pair was stopped on the upside by the 100-month MA at 0.7715 and is vulnerable to a slide to 0.7270 and lower. In Australia, half of the population went into lockdown last week.
S&P 500 has once again visited record highs. Individual stocks are also offering interesting setups. For example, Nike kept soaring after a strong sales report: although there may be corrections to the downside, the future looks bright. Johnson & Johnson claimed its vaccine neutralizes the fast-spreading Delta virus variant, and the outlook for the firm shifted. A break above $166.50 will open the way up to $170.00.
Oil & metals
Gold and oil are still investors’ favorites. The precious metal remains a buy on the dips, while oil will continue reacting to the news and showing intraday volatility. The recovery can take XAU/USD to the $1813/1824 area. The level of $1750 will remain strong strong.
The overall uptrend for XBR/USD will remain in place as long as Brent is trading above $71 a barrel. Although Russia and Saudi Arabia were eager to increase output, the United Arab Emirates on Friday blocked an OPEC+ deal demanding better terms for itself. The talks will likely resume on Monday. If the nations fail to reach a deal, the crude price may be squeezed higher in the short term. Then there will be a risk of price war as every producer will want to get more money from the market.
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Last week was super intense! Geopolitical turbulence made the Russian ruble the most volatile currency. Gold rose and fell by more than 8000 points each time.
The US Bureau of Economic Analysis will publish Core Personal Consumption Expenditures (PCE) on May 27 at 15:30 GMT+3.
The United States will publish the Preliminary GDP on Thursday, May 26, at 15:30 GMT+3.
The Reserve Bank of New Zealand will publish a monetary policy report and make an update on the interest rate on May 25, at 05:00 GMT+3.