• Prior CHF 5.81 billion; revised to CHF 5.79 billion

The Swiss trade surplus expanded in June as exports were seen down by 2.5% while imports slumped by 5.3% on the month.

This article was written by Justin Low at www.forexlive.com.

IC Markets Europe Fundamental Forecast | 18 July 2024

What happened in the Asia session?

Australia released its labour force report for the month of June where a whopping 50.2K jobs were added to the economy versus the estimate of 19.9K while the unemployment rate edged higher from 4.0% to 4.1%, in line with market expectations. It was a positive report that served as a bullish catalyst for the Aussie as it reversed sharply from 0.6715 to surge as high as 0.6742 this morning.

What does it mean for the Europe & US sessions?

After spiking from 8.4K to 50.4K in May, the claimant count is now expected to rise by 23.4K in June. After averaging around 10K claims since June 2023, this surge in claims points to a potential softening of the labour market. Should claims print higher than its estimate once again while accompanied by a rising unemployment rate, the Pound will likely come under heavy selling pressure before the start of the European trading hours.

Following the first rate cut in June, the ECB is expected to hold the main refinancing rate steady at 4.25% today. Inflation in the Euro Area has moderated lower since last September but the pace of easing has slowed over the last couple of months while the Composite PMI activity pulled back as well. ECB President Christine Lagarde will be conducting her press conference after the release of the statement where her remarks will certainly have a major impact on the direction of the Euro later today.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

After four weeks of elevated figures, unemployment claims in the U.S. dropped to 222K last week which was well below the forecast of 236K. The current 4-week average stands at 233K while this week’s estimate of 229K points to claims picking up once more. Should we see higher-than-anticipated figures later today, it could signal some weakness in the labour market and potentially put the dollar under pressure once more.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

After four weeks of elevated figures, unemployment claims in the U.S. dropped to 222K last week which was well below the forecast of 236K. The current 4-week average stands at 233K while this week’s estimate of 229K points to claims picking up once more. Should we see higher-than-anticipated figures later today, it could signal some weakness in the labour market and potentially put the dollar under pressure – a move that would boost gold prices once more.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Labour Force Report (1:30 am GMT)

What can we expect from AUD today?

Australia released its labour force report for the month of June where a whopping 50.2K jobs were added to the economy versus the estimate of 19.9K while the unemployment rate edged higher from 4.0% to 4.1%, in line with market expectations. It was a positive report that served as a bullish catalyst for the Aussie as it reversed sharply from 0.6715 to surge as high as 0.6742 this morning.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi rose within a whisker of the 0.6100-threshold before reversing to slide lower yesterday. This currency pair was trading around 0.6075 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6035

Resistance: 0.6090

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

After the Bank of Japan’s (BoJ) intervention measures last Thursday and Friday, the yen has strengthened causing USD/JPY to fall hard and briefly tumble under the 155.50-level yesterday. This currency pair has since retraced higher and was trading around 156.40 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 155.30

Resistance: 157.70

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

ECB Monetary Policy Statement (12:15 pm GMT)

ECB Press Conference (12:45 pm GMT)

What can we expect from EUR today?

Following the first rate cut in June, the ECB is expected to hold the main refinancing rate steady at 4.25% today. Inflation in the Euro Area has moderated lower since last September but the pace of easing has slowed over the last couple of months while the Composite PMI activity pulled back as well. ECB President Christine Lagarde will be conducting her press conference after the release of the statement where her remarks will certainly have a major impact on the direction of the Euro later today.

Central Bank Notes:

• The Governing Council today decided to lower the three key ECB interest rates by 25 basis points after nine months of holding rates steady.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 4.25%, 4.50% and 3.75% respectively, with effect from 12 June 2024.
• Since September 2023, inflation has fallen by more than 2.5% and the inflation outlook has improved markedly while underlying inflation has also eased, reinforcing the signs that price pressures have weakened, and inflation expectations have declined at all horizons.
• At the same time, despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year – the latest Eurosystem staff projections for both headline and core inflation have been revised up for 2024 and 2025 compared with the March projections.
• Projections now show headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026 while economic growth is expected to pick up to 0.9% in 2024, 1.4% in 2025 and 1.6% in 2026.
• The Council also confirmed that it will reduce the Eurosystem’s holdings of securities under the pandemic emergency purchase programme (PEPP) by €7.5 billion per month on average over the second half of the year.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 18 July 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Weak demand for the greenback drove USD/CHF towards 0.8800 overnight. This currency pair touched a low of 0.8820 before retracing slightly higher towards 0.8850 as Asian markets came online and could drift lower as the day progresses – these are the support and resistance levels for today.

Support: 0.8820

Resistance: 0.8890

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Labour Force Report (6:00 am GMT)

What can we expect from GBP today?

After spiking from 8.4K to 50.4K in May, the claimant count is now expected to rise by 23.4K in June. After averaging around 10K claims since June 2023, this surge in claims points to a potential softening of the labour market. Should claims print higher than its estimate once again while accompanied by a rising unemployment rate, the Pound will likely come under heavy selling pressure before the start of the European trading hours.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Demand for the Loonie was weak yesterday as USD/CAD momentarily climbed above the threshold of 1.3700. This currency pair retreated away from this threshold at the beginning of the Asia session to hover around 1.3675 – these are the support and resistance levels for today.

Support: 1.3660

Resistance: 1.3710

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75% while continuing its policy of balance sheet normalization.
• Canada’s economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR but consumption growth was solid at about 3%, and business investment and housing activity also increased.
• Inflation remains above the 2% target and shelter price inflation is high but total CPI inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing.
• CPI inflation has eased from 3.4% in December to 2.7% in April while the preferred measures of core inflation have come down from about 3.5% last December to about 2.75% in April and the 3-month rate of core inflation slowed from about 3.5% in December to under 2% in March and April.
• In the labour market, businesses are continuing to hire workers as employment has been growing, but at a slower pace than the working-age population while elevated wage pressures look to be moderating gradually.
• The Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 24 July 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following the higher-than-anticipated draw in the API stockpiles, the EIA crude oil inventories experienced a similar outcome as well with nearly 4.9M barrels of crude being taken from storage compared to the estimate of a 0.9M-drawdown. In addition, stronger U.S. industrial production activity and the higher probability of the first interest rate cut by the Federal Reserve lifted prices. WTI oil surged 2.5% overnight as it surged above $82 per barrel overnight and continues to climb strongly this morning.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Europe Fundamental Forecast | 18 July 2024 first appeared on IC Markets | Official Blog.

Euro traders are preparing for more moves in the single currency in the sessions ahead as the European Central Bank updates the market on its latest rate decision. The market is fully expecting for the central bank to keep rates on hold and will be looking at the statement and press conference clear direction in the way ahead for rates. The ECB has been very clear in recent months that it is going to be heavily data dependant moving forward and most traders consider that given recent data updates including a tight labour market and persistent wage inflation that the next move will come in consequent meetings, but not today.

The Euro is currently sitting at multi-month highs, but this has had more to do with the dollar’s weakness than the Euro’s strength, but traders are still expecting to volatility after the rate call. Short term resistance on the Hourly charts is now sitting just above current levels near 1.0970 and a more hawkish than expected ECB could push the pair through these levels and then look to challenge the late December high at 1.1137, especially given that this would lead to a continuation of the recent trend. Conversely, more dovish rhetoric would lead to pull backs in the pair, with support sitting around 1.0867 on the 200-day moving average.

Resistance 2: 1.1137 – December 2023 High

Resistance 1: 1.0970 – Short-Term Trendline Resistance

Support 1: 1.0867 – 200-Day Moving Average

Support 2: 1.0665 – Short-Term Trendline Support and June Low

The post Trade the Euro on the European Central Bank Rate Decision Today first appeared on IC Markets | Official Blog.

There were some interesting moves in markets yesterday and they were very much all over the place. It’s been a tough week to try and paint a coherent picture to say the least. The dollar weakened at the balance, with USD/JPY continuing to steal the spotlight for the most part.

Meanwhile, tech shares endured a stinker with investors opting for a rotation play into the Dow – which closed at a fresh record high. The Nasdaq fell by nearly 3% in its worst showing since December 2022. Ouch. Then, we had gold which soared to a high of $2,483 only to stumble back late on in the day. That said, the precious metal is still keeping poised in the hunt of the $2,500 mark next.

The summer doldrums definitely aren’t playing out this time around. And that is keeping things interesting as we might just be breaking a pattern here in markets.

Going back to the dollar, it remains vulnerable with EUR/USD targeting the March highs and GBP/USD eyeing a firmer break above the 1.3000 mark. Both pairs will be in focus today with the ECB and UK jobs report on the agenda.

The ECB will be the main highlight but it is likely one that will generate very little market impact, if not none at all. Policymakers have made it clear that they will not do anything this month and will wait on September for the next rate cut. As such, this is very much a placeholder meeting as they prepare for the summer break.

0600 GMT – UK June payrolls change0600 GMT – UK May ILO unemployment rate, employment change0600 GMT – UK May average weekly earnings0600 GMT – Switzerland June trade balance1215 GMT – ECB July monetary policy decision1245 GMT – ECB president Lagarde press conference

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.

The pair fell by roughly 1.3% yesterday, which was the steepest fall since Japan intervened in the market last Thursday. Before that, you’d have to look back to the start of May when Japan stepped in once again at the time. That speaks to the significance of the decline yesterday.

Still, it wasn’t one that had the typical trademarks of Japan intervening. Or at least in my view, the price action was not as clear cut as it was on Thursday and Friday last week.

Adding to that, there are a couple of other factors that might be of impact too. For one, we are seeing USD/JPY break below its key trendline support for the year as seen above from the white line.

Then, there’s the rotation play in Wall Street where the Dow is now outperforming as tech shares stumbled hard. Is it a broadening of gains after the narrow hot streak among the supposed Magnificent Seven? Or perhaps we’re seeing some response to the recent political happenings? It’s a tough one to pin on just one particular factor, at least for now.

Going back to USD/JPY, the pair remains pressured even with the slight bounce from earlier today.

The break of the key trendline above is putting sellers in a good position, with the 100-day moving average (red line) at 155.10 being eyed. The low earlier failed to test that but dip buying sentiment is rather fragile, so it wouldn’t take much for price to stumble once again. For now, sellers are in near-term control.

This article was written by Justin Low at www.forexlive.com.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation towards 1st resistance.

Pivot: 2419.00
Supporting reasons: Identified as an overlap resistance level, specifically at the 78.60% Fibonacci Retracement and 161.80% Fibonacci Extension, indicating Fibonacci confluence and a significant area where previous declines have found resistance.

1st support: 2392.15
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 2450.34
Supporting reasons: Identified as a swing high resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 1.0914
Supporting reasons: Identified as a pullback support level, indicating a potential area where buyers could enter the market after a retracement.

1st support: 1.0858
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 1.0955
Supporting reasons: Identified as an overlap resistance level, specifically at the 161.80% Fibonacci Extension, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 171.42
Supporting reasons: Identified as an overlap resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 169.94
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 173.52
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/GBP:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 0.8431
Supporting reasons: Identified as a pullback resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 0.8387
Supporting reasons: Identified as a multi-swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8461
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 1.2992
Supporting reasons: Identified as an overlap support level, specifically at the 23.60% Fibonacci Retracement, indicating a potential area where buyers could enter the market after a retracement.

1st support: 1.2932
Supporting reasons: Identified as an overlap support level, specifically at the 38.20% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 1.3064
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 204.09
Supporting reasons: Identified as an overlap resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 201.42
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 206.11
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CHF:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 0.8827
Supporting reasons: Identified as a multi-swing low support level, indicating a significant area where previous declines have found support.

1st support: 0.8729
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8891
Supporting reasons: Identified as a pullback resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/JPY:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 157.16
Supporting reasons: Identified as a pullback resistance level, specifically at the 50% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 155.32
Supporting reasons: Identified as a swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 158.26
Supporting reasons: Identified as a pullback resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CAD:

Potential Direction: Bullish
Overall momentum of the chart: Neutral

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot:1.3663
Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement level, suggesting a potential area where buying interests could pick up to stage a minor rebound.

1st support: 1.3634
Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, suggesting a potential area that could halt further downward movement.

1st resistance: 1.3699
Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to drop towards the 1st support.

Pivot: 0.6752
Supporting reasons: Identified as an overlap resistance that aligns with a 50% Fibonacci retracement level, indicating a potential zone where selling pressures could intensify.

1st support: 0.6701
Supporting reasons: Identified as an overlap support that aligns close to a 50% Fibonacci retracement level, suggesting a potential area where price could find strong support.

1st resistance: 0.6792
Supporting reasons: Identified as a pullback resistance, indicating a significant area that could halt further upward movement.

NZD/USD

Potential Direction: Bearish
Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6092
Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, indicating a potential area where selling pressures could intensify.

1st support: 0.6037
Supporting reasons: Identified as an overlap support, suggesting a significant area that could halt further downward momentum.

1st resistance: 0.6125
Supporting reasons: Identified as a pullback resistance, indicating a significant area that could halt further upward movement.

US30 (DJIA):

Potential Direction: Bearish

Overall Momentum of the Chart: Bullish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 41,378.74
Supporting reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension level, indicating a potential area where selling pressures could intensify.

1st Support: 40,922.42

Supporting Reasons: Identified as a pullback support, suggesting a significant area where price could find strong support.

1st Resistance: 41,761.15

Supporting Reasons: Identified as a resistance that aligns with a 161.8% Fibonacci extension level, indicating a significant area that could halt further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall Momentum of the Chart: Neutral

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 18,426.80
Supporting reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st Support: 18,227.20

Supporting Reasons: Identified as a swing-low support, indicating a significant area where price could find strong support.

1st Resistance: 18,576.00

Supporting Reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement level, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Bullish

Price is falling towards the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 5,575.74
Supporting reasons: Identified as a pullback support that aligns with a 23.6% Fibonacci retracement level, indicating a potential area where buying interests could pick up to resume the uptrend. The presence of the bullish Ichimoku cloud and the uptrend channel adds further significance to the bullish momentum.

1st support: 5,520.06

Supporting reasons: Identified as an overlap support that aligns with a 38.2% Fibonacci retracement level, indicating a potential area where price could find strong support. 

1st resistance: 5,669.89

Supporting reasons: Identified as a pullback resistance that aligns close to the all-time high, suggesting a critical area that could halt further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 66,971.73

Supporting reasons: Identified as a pullback resistance that aligns with a 127.2% Fibonacci extension level, indicating a potential area where selling pressures could intensify.

1st support: 62,395.17

Supporting reasons: Identified as an overlap support, indicating a significant area that could halt further downward movement.

1st resistance: 70,045.45

Supporting reasons: Identified as a pullback resistance that aligns with a 161.8% Fibonacci extension level, indicating a potential barrier that could halt further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price could rise towards the pivot and potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 3,533.10

Supporting reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, indicating a potential area where selling pressures could intensify.

1st Support: 3,343.77

Supporting Reasons: Identified as an overlap support that aligns with a 23.6% Fibonacci retracement level, indicating a significant area that could halt further downward movement.

1st Resistance: 3,717.11

Supporting Reasons: Identified as an overlap resistance that aligns with a 78.6% Fibonacci retracement level, indicating a historical barrier where selling pressures could intensify.

WTI/USD (Oil):

Potential Direction: Bearish

Overall Momentum of the Chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 83.77

Supporting Reasons: Identified as a pullback resistance that aligns close to a 78.6 Fibonacci retracement level, indicating a potential area where selling pressures could intensify.

1st Support: 80.68

Supporting Reasons: Identified as an overlap support that aligns close to a 38.2% Fibonacci retracement level, indicating a significant area where price could find strong support.

1st Resistance: 84.78

Supporting Reasons: Identified as a pullback resistance, indicating a potential barrier that could halt further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish continuation towards 1st resistance.

Pivot: 2449.62
Supporting reasons: Identified as an overlap support level, indicating a significant area where previous declines have found support.

1st support: 2415.35
Supporting reasons: Identified as a pullback support level, specifically at the 38.20% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 2483.22
Supporting reasons: Identified as a multi-swing high resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

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The post Thursday 18th July 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

• Federal Reserve speakers on Thursday include Logan, Daly, Bowman
• Canada – Trudeau holds meeting with Mark Carney to join government
• Chinese Communist Party news conference called for July 19 – Third Plenum briefing
• Bank of England speaker Thursday on financial stability
• Australian data: Q2 business survey shows conditions eased and forward indicators softened
• Australian June unemployment rate 4.1% (vs. 4.0% expected)
• PBOC sets USD/ CNY central rate at 7.1285 (vs. estimate at 7.2587)
• Former Bank of Japan Exec Director says Bank of Japan unlikely to raise rates this month
• Some USD/JPY option expiries to be aware of for 10am NY time today
• Japan data – June exports +5.4% y/y (expected 6.4%) & imports +3.2% y/y (expected 9.3%)
• European Central Bank monetary policy decision due today – on hold widely expected
• Bank of America’s global fund manager survey – most expect first Fed rate cut in September
• US President Biden has Covid
• JP Morgan on oil – wary of diminished incentivization driving a spike to US $100 / barrel
• Goldman Sachs – Global hedge funds reducing exposure to US stocks for 5 days in a row
• ICYMI – Fed’s Beige Book eyes growth slowing, consumers tightening belts
• UBS expect the Federal Reserve to cut in September, say get into attractive yield now
• Forexlive Americas FX news wrap: Nasdaq suffers worst drop since 2022. USD/JPY pressured
• Trade ideas thread – Thursday, 18 July, insightful charts, technical analysis, ideas

USD/JPY
was sold off in the Tokyo morning to lows under 155.50. There were no
fresh obvious catalysts to trigger the moves, although we did have
trade data for June published (not generally a market-mover). The
drop was attributed to an underlying fear of further Bank of Japan
intervention, the potential for a rate hike at the July meeting or at
least larger trimming of bond buys than is expected, and a run on
stops under the round number 156.00. There was some talk of
intervention but volumes remained light, arguing against
intervention. I also noted that an intervention effort would seem to
be not the way the BOJ is operating right now:

• the
  BoJ recently slammed yen crosses after US data, at a time when
  USD/JPY was already falling
• the
  BoJ tends not to intervene in times of deep and thick liquidity, like
  with Tokyo markets fully operating

From
Australia today we had the latest employment report. It was another
solid report, jobs added were more than double the central estimate.
The unemployment rate ticked up by 0.1%, with an increase in
participation also. The jobless rate remains not too far from
five-decade lows. AUD/USD popped a few points higher after the data
and managed to sustain the small rise as I post.

Apart
from the yen major FX was subdued.

This article was written by Eamonn Sheridan at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 18 July 2024

What happened in the U.S. session?

Industrial production expanded strongly in June as it rose 0.6% MoM, higher than the estimate of 0.3%, as segments such as mining and utilities led the charge. After a somewhat weak industrial activity in the fourth quarter of 2023, production has picked up in recent months.

Meanwhile at an event hosted by the Federal Reserve Bank of Kansas City, Federal Reserve Governor Christopher Waller stated that the central bank is inching closer to its first interest rate cut while the economy was on track for a rare “soft landing”, barring any drastic changes to inflation and the labour market. “So, while I don’t believe we have reached our final destination, I do believe we are getting closer to the time when a cut in the policy rate is warranted”, said Governor Waller.

The dollar index (DXY) touched an overnight low of 103.65 before retracing slightly higher towards 103.90 by the end of this session.

What does it mean for the Asia Session?

Australia will release its labour force report for the month of June where 19.9K jobs are anticipated to be added to the economy while the unemployment rate is expected to edge higher from 4.0% to 4.1% in June. Should the report indicate a robust set of job gains and steady unemployment, it could function as a potential bullish catalyst for the Aussie this morning.

The Dollar Index (DXY)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from DXY today?

After four weeks of elevated figures, unemployment claims in the U.S. dropped to 222K last week which was well below the forecast of 236K. The current 4-week average stands at 233K while this week’s estimate of 229K points to claims picking up once more. Should we see higher-than-anticipated figures later today, it could signal some weakness in the labour market and potentially put the dollar under pressure once more.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bullish

Gold (XAU)

Key news events today

Unemployment Claims (12:30 pm GMT)

What can we expect from Gold today?

After four weeks of elevated figures, unemployment claims in the U.S. dropped to 222K last week which was well below the forecast of 236K. The current 4-week average stands at 233K while this week’s estimate of 229K points to claims picking up once more. Should we see higher-than-anticipated figures later today, it could signal some weakness in the labour market and potentially put the dollar under pressure – a move that would boost gold prices once more.

Next 24 Hours Bias

Weak Bullish

The Australian Dollar (AUD)

Key news events today

Labour Force Report (1:30 am GMT)

What can we expect from AUD today?

Australia will release its labour force report for the month of June where 19.9K jobs are anticipated to be added to the economy while the unemployment rate is expected to edge higher from 4.0% to 4.1% in June. Should the report indicate a robust set of job gains and steady unemployment, it could function as a potential bullish catalyst for the Aussie this morning.

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

The Kiwi rose within a whisker of the 0.6100-threshold before reversing to slide lower yesterday. This currency pair was trading around 0.6075 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6035

Resistance: 0.6090

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

No major news events.

What can we expect from JPY today?

After the Bank of Japan’s (BoJ) intervention measures last Thursday and Friday, the yen has strengthened causing USD/JPY to fall hard and briefly tumble under the 155.50-level yesterday. This currency pair has since retraced higher and was trading around 156.40 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 155.30

Resistance: 157.70

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bullish

The Euro (EUR)

Key news events today

ECB Monetary Policy Statement (12:15 pm GMT)

ECB Press Conference (12:45 pm GMT)

What can we expect from EUR today?

Following the first rate cut in June, the ECB is expected to hold the main refinancing rate steady at 4.25% today. Inflation in the Euro Area has moderated lower since last September but the pace of easing has slowed over the last couple of months while the Composite PMI activity pulled back as well. ECB President Christine Lagarde will be conducting her press conference after the release of the statement where her remarks will certainly have a major impact on the direction of the Euro later today.

Central Bank Notes:

• The Governing Council today decided to lower the three key ECB interest rates by 25 basis points after nine months of holding rates steady.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be decreased to 4.25%, 4.50% and 3.75% respectively, with effect from 12 June 2024.
• Since September 2023, inflation has fallen by more than 2.5% and the inflation outlook has improved markedly while underlying inflation has also eased, reinforcing the signs that price pressures have weakened, and inflation expectations have declined at all horizons.
• At the same time, despite the progress over recent quarters, domestic price pressures remain strong as wage growth is elevated, and inflation is likely to stay above target well into next year – the latest Eurosystem staff projections for both headline and core inflation have been revised up for 2024 and 2025 compared with the March projections.
• Projections now show headline inflation averaging 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026 while economic growth is expected to pick up to 0.9% in 2024, 1.4% in 2025 and 1.6% in 2026.
• The Council also confirmed that it will reduce the Eurosystem’s holdings of securities under the pandemic emergency purchase programme (PEPP) by €7.5 billion per month on average over the second half of the year.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 18 July 2024.

Next 24 Hours Bias

Weak Bearish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Weak demand for the greenback drove USD/CHF towards 0.8800 overnight. This currency pair touched a low of 0.8820 before retracing slightly higher towards 0.8850 as Asian markets came online and could drift lower as the day progresses – these are the support and resistance levels for today.

Support: 0.8820

Resistance: 0.8890

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bullish

The Pound (GBP)

Key news events today

Labour Force Report (6:00 am GMT)

What can we expect from GBP today?

After spiking from 8.4K to 50.4K in May, the claimant count is now expected to rise by 23.4K in June. After averaging around 10K claims since June 2023, this surge in claims points to a potential softening of the labour market. Should claims print higher than its estimate once again while accompanied by a rising unemployment rate, the Pound will likely come under heavy selling pressure before the start of the European trading hours.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Weak Bearish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Demand for the Loonie was weak yesterday as USD/CAD momentarily climbed above the threshold of 1.3700. This currency pair retreated away from this threshold at the beginning of the Asia session to hover around 1.3675 – these are the support and resistance levels for today.

Support: 1.3660

Resistance: 1.3710

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.75% while continuing its policy of balance sheet normalization.
• Canada’s economic growth resumed in the first quarter of 2024 after stalling in the second half of last year. At 1.7%, first-quarter GDP growth was slower than forecast in the MPR but consumption growth was solid at about 3%, and business investment and housing activity also increased.
• Inflation remains above the 2% target and shelter price inflation is high but total CPI inflation has declined consistently over the course of this year, and indicators of underlying inflation increasingly point to a sustained easing.
• CPI inflation has eased from 3.4% in December to 2.7% in April while the preferred measures of core inflation have come down from about 3.5% last December to about 2.75% in April and the 3-month rate of core inflation slowed from about 3.5% in December to under 2% in March and April.
• In the labour market, businesses are continuing to hire workers as employment has been growing, but at a slower pace than the working-age population while elevated wage pressures look to be moderating gradually.
• The Governing Council is closely watching the evolution of core inflation and remains particularly focused on the balance between demand and supply in the economy, inflation expectations, wage growth, and corporate pricing behaviour.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 24 July 2024.

Next 24 Hours Bias

Weak Bullish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Following the higher-than-anticipated draw in the API stockpiles, the EIA crude oil inventories experienced a similar outcome as well with nearly 4.9M barrels of crude being taken from storage compared to the estimate of a 0.9M-drawdown. In addition, stronger U.S. industrial production activity and the higher probability of the first interest rate cut by the Federal Reserve lifted prices. WTI oil surged 2.5% overnight as it surged above $82 per barrel overnight and continues to climb strongly this morning.

Next 24 Hours Bias

Medium Bullish

The post IC Markets Asia Fundamental Forecast | 18 July 2024 first appeared on IC Markets | Official Blog.

The background to this is here:

• Canadian finance minister could walk the plank. Mark Carney could be tapped

Canadian media, Globe and Mail (gated) are reporting that Prime Minister Justin Trudeau has urged Mark Carney to join his Liberal government.

Four unnamed sources were quoted, so it appears to be getting closer.

This article was written by Eamonn Sheridan at www.forexlive.com.

Chinese Communist Party Central Committee will condiuct the press conference:

• Scheduled for July 19 (I don’t have a time yet)
• it’s a briefing on the third plenum held this week

We may get some info on moves to support the economy. Perhaps.

This article was written by Eamonn Sheridan at www.forexlive.com.

US Tech Stocks Smashed – Nasdaq Down 2.8%

Markets experienced a hard day yesterday in the US as tech stocks took their worst beating since 2020 after a report advised that the US could increase curbs on exports of semiconductors to China and Donald Trump talked about charging Taiwan for defense. The S&P and Nasdaq both took a big hit on the day, closing down 1.40% and 2.77% respectively while the Dow up 0.59% at another record high. US treasury yields continued to edge lower, the 10-year losing 2 basis points to 4.146% and the 2-year off 1.6 basis points to 4.430% and the dollar took another hit losing 0.52% on the index with the UsdJpy notably taking a near 2% dive on the day. Oil prices jumped as US stockpiles decreased much more than expected, Brent up 1.6% to $85.08 and WTI gaining 2.6% to $82.85 a barrel and Gold dropped off after hitting another record level during trading to eventually close the day down 0.6% at $2,455 an ounce.

Yen Intervention Pushing the Currency Higher

Japanese authorities are likely to be congratulating themselves on a job well done with the Yen at much more elevated levels than just a few days ago. There is no doubt that there has been a lot of Yen bought by the Bank of Japan, but the timing on this occasion has worked well with a change in the underlying fundamentals, especially against the US dollar. Weaker data prints out of the US, a significant drop in US yields and a jump in Federal Reserve rate cut expectations have all contributed to a near 4% drop in the UsdJpy in the 7 days. Geopolitical concerns, which have heightened considerably in the last few days have also aided the move as haven trades do tend to see moves in the Yen. The pair dropped over 3 big figures in the last day and traders are now expecting more volatility and trading opportunities in the sessions ahead with the bias definitely having moved to more downside potential.

Another Big Trading Day Ahead for Investors

Investors are expecting another busy day ahead in financial markets today after a tumultuous day on Wall Street. The focus will be on Australian markets early in the APAC day with the highly anticipated employment numbers due out from Canberra in the morning, expectation is for a 20k increase in jobs last month and for the unemployment rate to tick up to 4.1%. The European session is set to be a busy one for traders with employment data out from the UK early in the day before the focus moves across the channel for the ECB rate call and press conference. The US session is set to be another hectic one with more focus likely on the newswires and any political updates as well as the usual weekly unemployment claims data and the Philly Fed Manufacturing Index number later in the day.

The post General Market Analysis 18/07/2024 first appeared on IC Markets | Official Blog.

Business conditions +5 index

• prior +10
• trading conditions and profitability both fell 6pts
• employment index fell 3pts
• forward orders fell 4pts to -6

Business confidence -1

• prior-2

NAB comments:

• “Consistent with our monthly business survey, today’s release shows business conditions eased in Q2 as slow economic growth and soft consumer demand weighed on firms,”

• “At +5, conditions are still slightly above the long-run average for the quarterly survey which dates back to 1989, but nonetheless have now come down some way from their recent highs. Confidence also remained weak.”
• “There was further softening in the forward indicators in the business survey this quarter,”
• “Expectations for future business conditions have weakened, which suggests businesses are becoming more worried about the outlook for the economy even as we have so far managed to avoid a recession.”

More:

• labour costs +1.2% (unchanged from Q1)
• purchase costs +0.9% (from 1.1% in Q1)
• “The story on cost pressures and prices is mixed in this survey,”
• “There appears to be ongoing improvement in materials cost growth which is very welcome, but labour cost growth is still elevated. Labour availability was a significant constraint for 30% of firms and wage costs remain a top concern.”
• “That said there has also been some gradual further easing in price growth, suggesting the slowing demand environment is putting downward pressure on firms’ ability to pass on costs to consumers,”
• “Pressure on margins is also now among the top issues weighing on business confidence.”

Earlier:

• Australian June unemployment rate 4.1% (vs. 4.0% expected)

AUD update:

This article was written by Eamonn Sheridan at www.forexlive.com.