Today, two events will shake the US dollar. First, at 16:45 GMT+2, Markit, a statistical company, will release the US Flash Services PMI. Moreover, at 21:00 GMT+2, the Federal Reserve will release its meeting minutes.
Trade ideas for August 2-6
The Nonfarm Payrolls will be the most important event of the week as it may impact the Fed’s future policy. All traders will wait for it eagerly. To predict the outcome of NFP, we recommend following such US indicators this week as ISM Manufacturing & Services PMI and the ADP report. They tend to give an early outlook on the US labor market, that’s why most analysts make their forecasts for NFP based on them.
The last week was one of the toughest for the US dollar so far this year. The Federal Reserve claimed that the current US economic progress is not good enough for paring back the stimulus. Those comments negatively impacted the US dollar and sent it to the one-month low. Besides, the US revealed a set of poor economic indicators: GDP growth, jobless claims, and home sales. As a result, the USD weakened, allowing EUR/USD and XAU/USD (gold) to rally. If the momentum sustains, EUR/USD may move to the psychological mark of 1.2000.
The stock market is of interest to all these days. The Fed’s dovish policy continues to support stocks and stock indices near record highs. Meanwhile, the largest Chinese companies and stock indexes dropped as China pressed its big-cap companies with strict regulations. Moreover, the earning season continues! US companies are revealing their earnings results for the second quarter. Pay closer attention to General Motors as it should grow in the long-term due to Biden’s infrastructure plan. GM will release its Q2 data on August 4 before the US stock market opens. If the release is positive, GM may surge to $60.00.
Oil & metals
Oil prices are moving up driven by the global economic recovery. Last week’s US crude oil inventories declined, signaling the increasing demand for crude oil. Brent oil (XBR/USD) is just below $75.00. If it manages to break it, the way to $76.00 will be clear.
The following information is not investment advice. Remember that trading is risky. Manage your funds carefully and remember that you can use Take Profit and Stop Loss orders to maximize your gains and limit your losses.
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