The market takes breath after the long rally. What opportunities do traders have today?
Forex today: China’s President calmed markets
- Risk appetite returned to markets after the speech of China’s President Xi Jinping at the Boao Forum for Asia. The President calmed investors with the opening economy, better IP protection, dialog as a solution of disputes and so on. As a result, safe haven investment securities as Japanese yen, Swiss franc, and gold fell. On the contrary, the US dollar and stocks climbed.
- The US dollar index is trading near 89.50. The rise is not big as the greenback needs more support. Tomorrow investors will look at the CPI, Core CPI data (15:30 MT time) and Fed’s minutes (21:00 MT time). If the actual data is greater than forecast, the US dollar has chances to move further.
- The USD/JPY pair is trading slightly above 107 again. The resistance still lies at 107.35. If the pair breaks this level, the next resistance is at 107.80 that is the upper boundary of the consolidation range of 104.65-107.80.
- The Australian dollar found a support in the Jinping’s speech and moved higher. The AUD/UD pair broke the resistance at 0.7715. The next resistance is at 0.7745. However, the moving averages are signaling about the downtrend: 50 MA crossed the 200 MA upside down. The support is at 0.7678.
- NZIER Business Confidence managed to support the kiwi today. Although the figure appeared to be negative, it is higher than the previous one (-11 vs -12). The New Zealand dollar is about to reach the March highs at 0.7343. If the NZD/USD pair breaks that level, the next resistance is at 0.7395. However, no important data for the New Zealand dollar is anticipated in next few days, so the kiwi needs support from other sources.
- GBP and EUR are appreciating against the USD. However, the rise of the single currency is on the edge, the pair is trading near 1.2320. The resistance is at 1.2346.
- Stocks rose based on the risk-on sentiment of the market. However, such events as Chief Executive Officer of Facebook Mark Zuckerberg testimony at two Congressional hearings Tuesday and Wednesday and investigation of Russian meddling in the U.S. election should be taken into consideration. For example, S&P 500 Index lost two-thirds of its advance based on the news about the FBI’s raid at the office of Mr. Trump’s lawyer, Mr. Cohen.
- Gold lost some points. The yellow metal reached the resistance at 1,340 and turned around. Trade wars tensions will continue to put pressure on gold. According to current market sentiments, the escalation of trade wars is not anticipated this year, so the greenback has chances to recover modestly. As the US dollar and gold are correlated, the rise of the greenback will pull gold down. The support lies at 1,330.
- Oil is continuing to increase as trade wars worries eased. WTI is trading above $64 a barrel, Brent is climbing to $70 a barrel. Tomorrow’s crude oil inventories figures (17:30 MT time) may push oil further or lead to its fall.
That is all for today. Follow markets news with us!
The United States will publish a weekly update on unemployment claims on July 9, at 15:30 MT time.
The market sentiment deteriorated amid increasing virus cases in the USA and Australia. Investors prefer safe-haven assets like gold, the US dollar and the Japanese yen.
Risk-on is back on the market. Riskier currencies and stocks are in favor. Gold is rising too as investors try to hedge.
Riskier currencies and stocks are in favor of investors. Surprisingly, gold rallies too. Let’s have a closer look.
Congratulations! Gold has just opened a new era... or, rather, reopened...