We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
Main market movements on July 29
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
- The day has started with the data from Australia. The Australian consumer price index slumped by 1.9%. In fact, it was less than the expected 2% contraction. The aussie keeps rallying after the short sell-off after the CPI report.
- The US CB consumer confidence came out worse than expected yesterday. It was 92.6, while the forecast was 94.0. Actually, it’s a survey of 3 000 households which asks respondents to assess current economic conditions. This indicator is quite important, and thus tends to create market volatility. The US dollar continues its 4-month downward trend.
- The US president Donald Trump announced some optimistic news on the upcoming vaccine. The third phase is in the process now. All the vaccine trials are expected to end in the late autumn. However, coronavirus cases are still rising.
The pair is moving to the upside. The move above the yesterday high at 1.1766 will push the price higher to the 61.8% Fibonacci level at 1.1820. However, if EUR/USD breaks down the yesterday low at 1.1715, it may fall down to the key support at 1.1700. Follow the Fed’s statement today at 21:00 MT time, it will have a huge impact on the market.
The main focus of attention is gold these days. Bank of America set the 18-month target price at $3 000. JP Morgan’s prospects are bullish on gold in the short term too. Goldman Sachs forecasts XAU/USD to jump to $2 300. On the chart we see that the price is approaching the recent high at $1 965. If it breaks it through, it can surge to the all-time high at $1 980. Support levels are at $1 930 and $1 885.
The Australian dollar is close to the key resistance at 0.7185. The move above this level will drive the price to the 200-week moving average at 0.7257. On the flip side, if the aussie breaks down the low of July 23 at 0.7100, it may fall lower to the next support at 0.7000.
The stock index has bounced from the support line. It should continue its zig-zag movement and rise further until it reaches the resistance at 3 270. If the price breaks through this level, it may soar to the next resistance at 3 225. Support levels are 3 190 and 3 135.
- The US Pending home sales will be released at 17:00 MT time. The forecast is 15.6%. If the actual numbers are greater than expected, the USD will rise, otherwise – fall.
- The US crude oil inventories will be published half an hour later.
- The FOMC will make a statement at 21:00 MT time and held a press conference half an hour later. Don’t miss out! It will make the whole market volatile.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.