Geopolitical News Influence Markets
Russian-Ukrainian conflict is influencing every economic aspect…
Inflation concerns led tech stocks down and gold up
Latest news
- Stocks especially tech ones dropped on Tuesday as increasing commodity prices raised concerns over inflation. Higher inflation may push up interest rates, pressing down stock valuations. Bloomberg said that a measure of inflation expectations hit the highest mark since 2006.
- The US inflation report will be out already this Wednesday. It’s widely expected to reveal a strong gain. Investors are trying to predict whether the inflation increase pushes the Fed to tighten the policy sooner than expected.
- Gold is often viewed as a hedge against inflation, that’s why it’s trading now near the three-month high. Gold showed the largest weekly increase since November on Friday after a surprisingly poor NFP.
- Oil fell as traders monitored the worsening fallout from the closure of the largest US oil-products pipeline.
Tech analysis
EUR/USD has broken through the upper trend line at 1.2130. It retraced to this line, but it should be just a natural short sell-off ahead of the further rally up. On the way up, the pair will meet resistance levels at 1.2175 – the recent high and 1.2250 – the high of February 25. However, if the sentiment changes, the pair may fall to the 100-day moving average of 1.2050 and the one-week low of 1.2000.
Gold is getting closer to the upper trend line of the descending channel, which coincides with the 200-day moving average of $1850. If it manages to break it, the way up to the highs of late January of $1875 will be open. In the opposite scenario, the move below the $1825 support will press the metal further down to $1813 – the intraday low of May 6.
GBP/USD has broken through the psychological mark of 1.4000 since political risks eased in the UK. It looks like the pair is overbought: the price went above the upper line of Bollinger Bands and the RSI indicator flattened just below the 70.00 level. On the smaller timeframes, GBP/USD has already reversed down. Therefore, it may retest 1.4000 again.
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The US NFP: What’s New?
The US Bureau of Labor Statistics will announce average hourly earnings, nonfarm employment change (NFP), and the unemployment rate on July 8, at 15:30 MT time.
What Are FOMC Insights?
The Federal Open Market Committee, a committee within the Federal Reserve, will reveal a detailed record of the central bank’s last meeting on July 6 at 21:00 MT.
Will Australian Cash Rate Change?
The Reserve Bank of Australia will announce its cash rate and make a statement about future rate policy on Tuesday, July 5, at 07:30 MT.
