What drives the market on July 1?

What drives the market on July 1?

The market sentiment is mixed. Let’s look at most interesting movements on the market today.

Fundamental factors

  • The Fed’s chairman Jerome Powell claimed yesterday that the US economy entered the new phase of economic recovery sooner than expected. Encouraging US data proved that the USA is moving forward to the V-shaped recovery. US consumer confidence showed yesterday the largest increase since late 2011. However, there are still challenges ahead as the labor market is still well-below pre-crisis levels. More than 20 million Americans remain unemployed. "All levels of government" should impose stimulus measures "for as long as needed" to support the economy rebound, Powell claimed. Stocks gained.
  • The Canadian GDP came better than the forecast. The indicator shrank by 11.6%, while analysts anticipated the 12.5% contraction. CAD rose.
  • Virus infection are still rising in some US states. Alarming data indicated that coronavirus cases in 14 states in the USA more than doubled in June.
  • Investors worry about a new national security law for Hong Kong. China imposed strict punishment measures up to life in prison for the sedition and collusion with foreign forces. Sino-American tensions escalated. Gold climbed up.

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Technical tips

Gold

XAU/USD is heading towards the key psychological mark at $1,800. Just few inches left. Support levels are at $1,760 and $1,720.

XAUUSDDaily.png

S&P 500

The stock index rose on the optimistic speech of Jerome Powell. The price crossed the resistance at 3,075 and took a breath after that. Most analysts anticipate that the stock rally will continue further. Anyway, if risk-off factors outweigh, look for support levels at the 200-day moving average at 3,025 and then at 3,000.

S&P500Daily.png

USD/CAD

The encouraging Canadian GDP pushed USD/CAD down. The pair met the support at the 100-day moving average at 1.3565. The risk-on market sentiment may push it even lower. If it breaks it down, it will clear the way towards the next support at 1.3495. Resistant levels are at 1.3605 and 1.3685.

USDCADH4.png

Upcoming events:

ADP non-farm payrolls will be released at 15:15 MT time. If the data turns out better than expected, the market sentiment will improve. Follow the report!

Check the economic calendar

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Similar

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The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now. 

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On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies. 

Latest news

Increased Volatility is Coming
Increased Volatility is Coming

The Reserve Bank of Australia (RBA) will make a statement and release a Cash Rate on February 7, 05:30 GMT+2. It's among the primary tools the RBA uses to communicate with investors about monetary policy.

Market Crash Incoming?
Market Crash Incoming?

This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.

What Currency Will Overperform?
What Currency Will Overperform?

S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.

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