US stock rebounded through trade on Thursday, as Wall Street jumped on hopes Fed can stick the soft economic landing. Two of the Federal Reserve’s most hawkish policymakers pushed back against fears of a recession as monetary settings tighten. Governor Christopher Waller and St. Louis Fed President James Bullard supported the need for restrictive policy to curb price pressures but argued the US can still avoid a contraction.

The possibility of $220 billion of infrastructure stimulus in China also helped ease escalating recession concerns and injected a dash of optimism. Meanwhile, elevated commodity prices including metals and oil and potentially shoring up the Chinese growth outlook.

The benchmarks, S&P 500 and Nasdaq 100 both rose on Thursday. S&P 500 futures fell 0.1% as of 7:12 a.m. in Tokyo. The S&P 500 is up 1.5% daily. Nasdaq 100 futures fell 0.2% The Nasdaq 100 advanced with a 2.16% gain for the day. Ten out of eleven sectors went positive as market sentiment improved. The energy sector outperformed, S&P 500 ENERGY INDEX is the best among all groups.
Meanwhile, Nikkei 225 futures rose 0.4%, S&P/ASX 200 futures climbed 0.7%, Hang Seng futures increased 1.2%

Main Pairs Movement

The US dollar snapped a four-day winning streak to a more than one-month high, closing slightly low at -0.03%, as improved risk sentiment forced the USD off recent highs. Commodity currencies led gains through trade on Thursday. The CAD, NOK, NZD and AUD all moved higher.

The AUD/USD rebounded through trade on Thursday, bouncing from lows approaching 0.6750. Reports said that China is considering introducing a $220 billion bond program designed to fund infrastructure investment through H2 helped ease escalating recession concerns, elevating commodity prices, therefore making the AUDUSD pair more attractive.

The GBP/USD was in a bullish momentum and soared over 0.81%. The pound rose after Boris Johnson announced his intention to resign as British prime minister, easing the political chaos in the UK.

Meanwhile, EUR/USD slumped slightly yesterday. The pair was down 0.22% for the day. European gas futures rose another 6% overnight, marking the highest level since March. Further elevation in energy costs and decline in consumers’ purchasing power is pushing Europe toward recession and a cycle of stagflation.

Technical Analysis

AUDUSD (4-Hour Chart)

AUDUSD edges higher at the time of writing, showing resilience near 0.6762; however, the descending trend line continues to cap the recovery from a two-year low. On the four-hour chart, the latest recovery might be corrective as the bearish trend line has acted as a strong resistance according to experience. AUDUSD needs to advance above the bearish trend line to reclaim its bullish momentum in the near term. With the combination of factors, a bullish double-bottom formation, a bullish MACD, and a non-overbought RSI indicator might be able to lift the currency pair higher. On the flip side, if the immediate support of 0.6762 fails to defend, then the pair is expected to see an acceleration toward the south.

Resistance: 0.6926, 0.7028, 0.7110

Support: 0.6762

GBPUSD (4-Hour Chart)

GBPUSD has reversed its direction, climbing above 1.2000 amid the news that British Prime Minister Boris Johnson is planning to announce his resignation. Technical speaking, the mood of GBPUSD turns upside in the near- term despite still falling within the bearish channel. Both the MACD and the RSI indicator have shown some signals that bullish traders are reflecting the positive impact. The acceptance of 1.2163 would bring GBPUSD back to positive territory. On the flip side, if GBPUSD cannot continue its upside momentum, falling below the bearish channel and the support of 1.1876, then GBPUSD would move further south.

Resistance: 1.2063, 1.2178, 1.2272

Support: 1.1876

Gold (4-Hour Chart)

Gold hovers above $1732, attempting to recover from yesterday’s slump. From the technical aspect, the outlook of gold remains bearish on the four-hour chart as it continues to fall below the bearish trend; in the meantime, an inverted flag has signalled a continuation of bearish momentum. At this stage, gold might attract some dip- buyers as the RSI has reached the oversold territory, suggesting a potential rebound. However, the bearish momentum is still in charge as the bearish MACD continues to lend support to bears.

Resistance: 1766.80, 1788.13, 1805.36

Support: 1732.32

Economic Data

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US stocks rose for three days in a row, as investors parsed economic data that hinted at slower growth, which also prompted some to brush off the hawkish stance reiterated by Fed in June meeting minutes. All eyes need to be on the Fed, officials ‘’agreed” last month that interest rates may need to keep rising for longer to against entrenching inflation.

However, data released Wednesday showed that US job openings dipped slightly in May but remained near a record, and the growth in the US services sector also eased in June to a two-year low. This prompted some traders convinced that Fed’s stance has a little too real market situation.

On the benchmark side, both S&P500 and Nasdaq 100 rose on Wednesday although Fed reiterated the hawkish stance in June meeting minutes. S&P500 was up 0.36% daily and the Nasdaq 100 also advanced with a 0.6% gain for the day. In addition, eight of eleven sectors stayed in positive territory as utilities and info tech sectors are the best among all groups, gaining 1.01% and 0.88%, respectively. It is worth noting that, the energy sector remains bad performance on Wednesday and lose 1.74%. The Dow Jones Industrial Average meanwhile increased by 0.2% and the MSCI world index declined by 0.5% on Wednesday.

Main Pairs Movement

The US dollar continued to rise for three straight days, and the DXY index surged up and cling to a 20-year high of 107.05 after the hawkish stance reiterated by Fed. This is a sign of the market still fears the global recession.

The EUR/USD remained bearish, the pair fell to a new 20-year low of 1.0161 at the last hour of Wednesday. Besides the Fed’s hawkish attitude toward US high inflation, the broad pessimism surrounding economic growth, central bankers’ aggregation, and the energy crisis make a downside pressure.

The GBP/USD was also in a bearish momentum despite a bounce-off on late Wednesday from a two-year low around 1.1925. The Cable pairs are still suffering from UK’s political joined Brexit woes and broad recession fears. However, the market anxiety ahead of the Fed’s stance and softer US economic data seems to have probed the bears of late.

Gold has turned into a consolidation phase after a sheer downside move to $1,732 in the NY session. As Fed’s aggressive attitude infused fresh blood into the US dollar, the precious metal suffered a high downside pressure.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY edges slightly lower but keeps above the 135.00 level ahead of the FOMC meeting. From the technical perspective, the outlook maintains its bullish trend on the four-hour chart as the pair continues to trade within the ascending line. On the downside, falling below the support of 134.89 would bring the pair to the downside in the near- term. On the upside, the divergent monetary policies between the Fed and the BOJ would capitalize on the USD’s gain and undermine the Japanese Yen. As the RSI remains on the midline, further price action is eye on the FOMC meeting.

Resistance: 135.7, 137

Support: 134.89, 134.24, 133.59
 

GBPUSD (4-Hour Chart)

GBPUSD holds above the support level of 1.1876 at the time of writing ahead of the FOMC meeting. The US dollar remains strong and outperforms the British Pound on the back of better-than-expected ISM Service PMI economic data. From the technical aspect, the outlook of GBPUSD remains bearish on the four-hour chart as the pair falls within and below the descending channel, suggesting that GBP is lack attraction. In the meantime, a bearish MACD continues to lend support to bears while the RSI is on the edge of 30 readings. The pivot support of 1.1876 would be viewed as a defending cross-line, whether regaining the buyers’ confidence. If the support cannot sustain, then it is expected to see the currency pair extend further south.

Resistance: 1.2063, 1.2178, 1.2272

Support: 1.1876

Gold (4-Hour Chart)

Gold extends its slump below $1740, a fresh 10- month low ahead of FOMC Minutes. The Dollar Index and the benchmark 10- year US Treasury yield continues to soar, putting additional weight on the precious metal, gold. From the technical perspective, the intraday outlook remains downside as the pivotal support from yesterday fails to defend, now attracting more follow-through sellers. In the meantime, a bearish MACD signal also hints at gold’s further downside toward the next support of $1736.20. However, an oversold RSI might give the selling pressures a break; some dip buyers might start buying at this stage before FOMC Minutes.

Resistance: 1768.69, 1789.66, 1806.60

Support: 1734.80

Economic Data

US stock rebounded slightly after falling as much as 2.2% on Tuesday as fears of a globalized recession take their toll on financial markets. The talks of easing tariffs on China imposed by the former administration failed to appease recession fears as concerns about a potential US recession and stubborn inflation remained, despite the reducing tariffs on imported Chinese goods could impact consumer prices in the US. The release of the FOMC minutes in today’s session will remain in focus, providing a detailed view of Federal Reserve policymakers on supporting the Fed’s 75 basis points interest rate hike. In the Eurozone, German Economy Minister Robert Habeck noted that the energy industry crisis could hurt financial markets as Russia has curbed its gas flows to the country. Market participants expect the European Central Bank to hike rates by 130 bps by year-end.

The benchmarks, S&P 500 and Nasdaq 100 both rose on Tuesday despite the safe-haven US dollar taking advantage of the risk-aversion and risk-off market mood. S&P 500 was up 0.2% daily and the Nasdaq 100 also advanced with a 1.7% gain for the day. But eight out of eleven sectors stayed in negative territory as the energy and utilities sectors are the worst-performing among all groups, losing 4.01% and 3.43%, respectively. The Dow Jones Industrial Average meanwhile declined with a 0.4% loss on Tuesday and the MSCI World index rose 0.3%. Global equity markets remain under pressure as investors rushed to the dollar’s safety recently.

Main Pairs Movement

The US dollar advanced and surpasses the 106.00 level to touch a new cycle high on Tuesday. The US dollar soared over 1.3% due to the fears of a globalized recession, continuing to find demand amid risk-averse scenarios. According to analysts, the risk of a US recession is above 70%.

EUR/USD was surrounded by bearish momentum, The EUR/USD pair fell to a 20-year low of 1.0236, recovering some ground later in the day but still hovering below the 1.0300 thresholds. Economic reports show that EU growth slowed to a 16-month low, while Germany struggles to get gas amid gradually increasing tensions with Russia. German Economy Minister Robert Habeck said that the energy industry crisis could hurt financial markets. He did not rule out intervening gas prices. Russia curbed its gas supplies to the country, Germany, therefore, fears a complete blackout of provision, as Russia will temporarily shut down the NordStream-1 pipeline on July 11 for annual maintenance. By contrast, the risk-off dollar seems more attractive to the Euro. Meanwhile, GBP/USD slumped as well yesterday. The pair was down 1.41% for the day.

The gold price plummeted over 2.4% on Tuesday, and rebounded back slightly after touching a daily low below $1764 in the late European session, now hovering slightly below 1770.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY gains positive traction for the second consecutive day as the risk sentiment favours the US dollar at the time of writing. The outlook of USDJPY consolidates in between 134.89 and 137.00 ahead of the FOMC meeting. However, the divergent monetary policies between the Fed and the BOJ should limit the downside of USDJPY. USDJPY has breached the resistance level of 135.7, suggesting an upside momentum in the near- term. To the upside, if the immediate support can sustain and hold, then it would possibly contest the peak at 137.00. On the flip side, if the support fails to defend, then USDJPY is expected to consolidate.

Resistance: 135.70, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD renews multi-year lows in March 2020. The outlook of GBPUSD remains bearish as the pair continues to trade below the descending trend line; in the meantime, the bearish momentum is supported by the double-top formation. At the time of writing, GBPUSD is contesting the immediate support level of 1.1899. If the pair can recover at this stage, then it could potentially attract some dip-buying buyers, but bears are still in charge. On the downside, if the support cannot hold, then the pair would accelerate further south. At the moment, the selling pressure seems to moderate a bit as the RSI has reached the oversold condition and the MACD has turned upside.

Resistance: 1.208, 1.2192, 1.2283

Support: 1.1899

Gold (4-Hour Chart)

Gold slides sharply below $1,770 following the extra pace and renewed upside momentum of the safe- haven, the US dollar. The intraday decline is supported by multiple factors, including a stronger US dollar and a hawkish Fed expectation ahead of the FOMC meeting. From the technical perspective, gold is facing strong selling pressure, suggesting that gold is in the bearish mode. Dropping below the descending channel has brought further gold south. Breaking the channel has accelerated the bearish momentum toward the support level of $1,765. If the support fails to defend, then gold would confront another fresh selling pressure. In the meantime, the double-top formation has been constructed, meaning that gold is in the situation of bears. The current support level might be able to stop the bears a bit as the RSI indicator has reached the oversold territory. Further price action eyes on the upcoming FOMC meeting.

Resistance: 1791.85, 1818.39, 1821.76

Support: 1765.11

Economic Data

US equity market remained closed yesterday due to the US Independence Day holiday, but the cautious mood ahead of this week’s Monetary Policy Meeting Minutes from the Fed and the European Central Bank has exerted bearish pressure on investors’ sentiment. The futures for the US equity index and European bonds fell as investors worried that a faster pace of monetary tightening from global central banks will slow economic growth. Therefore, the economic fears kept the risk profile weak, which in turn helped the US dollar to remain upside momentum.

On the economic data side, the Producer Price Index from Eurozone rose 0.6% in May and came in weaker than the market’s expectations of 1%, which continues to warrant rate hikes from the European Central Bank. The dismal European data undermined demand for the Euros meanwhile the energy crisis also acted as a headwind for the shared currency amid the Russian invasion of Ukraine. The market focus now shifts to the FOMC minutes of its latest meeting on Wednesday and the Nonfarm Payrolls report on Friday, as market participants expect that the Fed elevated its interest rates by 75 basis points in its June monetary policy meeting.

Main Pairs Movement

A slow beginning to the week, as US markets were closed due to the Fourth of July Holiday. The DXY index was also in the mood of holiday during the first half of Monday and stay steadily around 105.1, and then gained some strength by the end of the day, reaching 105.198, but the action was limited as some traders stayed away from their desks.

GBP/USD was surrounded by bullish momentum at the start of Monday, even reaching a daily high around 1.2154, but then lost its bullish traction and fell to around 1.2105, since Brexit woes undermined demand for the Pound. At the same time, EUR/USD got a rebound from last Friday’s low of around 1.039 to a daily high of around 1.045 at the middie on Monday, but then Dismal European Data undermined demand for shared currency, and EUR/USD closed by 1.0425.

Gold continued the rebound momentum gained from last Friday’s daily low below $1786 and managed to reach above $1812.5, but then fell below $1805 as the expectation of a hike in interest rates makes gold less attractive.

Technical Analysis

USDJPY (4-Hour Chart)

USDJPY advances toward near 135.70 at the time of writing. USDJPY turns upside after experiencing a correction. From current levels, weakness below the resistance level of 135.70 would continue to find robust support at 134.89. If the support level is broken, then it would trigger a fresh technical selling, making USDJPY slide further south. On the flip side, if the pair can break through the resistance at 135.70 and further above the ascending trend line, then USDJPY could potentially attract more buyers to lift the pair above the psychological level of 136.00 and 137.00.

Resistance: 1.35.70, 137.00

Support: 134.89, 134.24, 133.59

GBPUSD (4-Hour Chart)

GBPUSD clings around 1.2100 on Monday. The pair has reversed its direction after reaching near the support level around 1.1934 area. The British Pound looks to regain position as the RSI indicator stays below, suggesting that buyers remain on the sidelines for the time being; in the meantime, the MACD has turned positive, indicating the reversal trend from bearish to bullish. To the upside, GBPUSD is heading toward the next resistance at 1.2227; if the pair can successfully breach the level, then it would continue to head north. On the downside, if the support level of 1.1934 cannot eventually defend the line, then GBPUSD would slide further south.

Resistance: 1.2227, 1.2408, 1.2555

Support: 1.1934

Gold (4-Hour Chart)

Gold struggles to stage a recovery on Monday following last week’s drop. Despite gold attempts to climb above the $1,800 level, it stays under modest bearish pressure, remaining within the descending channel. At the moment, even though the RSI indicator stays below the midline, gold looks to be capped by the midline of the Bollinger Band, having a hard-to-move further north. Gold needs to climb above $1,835 to reclaim bulls in the near- term. On the flip side, if the current support level at $1,784 cannot hold, then gold would accelerate further south.

Resistance: 1835.026, 1866.243

Support: 1784.565

Economic Data

US stock advanced on Friday and recovered some of the ground lost in Thursday’s session, as the late-day rebound might be exacerbated by low volume ahead of Monday’s holiday. The risk of a renewed selloff in equities is still high due to the pessimistic growth outlook, as investors are worried that the tighter monetary expectations in the face of higher inflation will lead to economic growth slowing and a possible recession. On the economic data side, the Institute for Supply Management’s US manufacturing PMI fell to 53 from 56.1 in May, which was the weakest since June 2020 and showed that the manufacturing activity in the US has weakened as new orders contracted. The market focus now shifts to this week’s minutes of the Federal Reserve’s June meeting, as the central bank is expected to raise interest rates by 75 basis points.

The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Friday despite the safe-haven US dollar advanced on recession fears. Nasdaq 100 was up 0.7% daily and the Dow Jones Industrial Average also advanced with a 1.0% gain for the day. All eleven sectors stayed in positive territory as the utilities and consumer discretionary sectors are the best performings among all groups, rising 2.48% and 1.97%, respectively. The S&P 500 climbed the most with a 1.1% gain on Friday and the MSCI World index rose 0.5%. For the week ahead, Nonfarm Payrolls will be the key data that might provide fresh impetus.

Main Pairs Movement

The US dollar advanced on Friday, rebounding from the 104.7 level that touched on Thursday and extending its rally toward the 105 area amid risk-off market sentiment. The DXY index was surrounded by bullish momentum during the first half of the day and reached a daily high near 105.6 level in the early US session, but then lost its bullish traction to surrender some of its daily gains. The safe-haven greenback continued to find demand amid escalating fears about a global recession, as the dismal US manufacturing PMI fueled recession-related concerns.

GBP/USD tumbled with a 0.70% loss on Friday amid the stronger US dollar across the board. The flight to safety increased the appetite for safe-haven assets and weighed on the GBP/USD pair. The cable remained under bearish pressure and dropped to a monthly low below the 1.199 mark, but then regained some upside traction to recover its daily losses. Meanwhile, EUR/USD slumped to the lowest level since June 15th below 1.038 level. The pair was down almost 0.50% for the day.

Gold rebounded back slightly after touching a daily low below $1786 in the late European session, as the US yields collapsed and provided support to the precious metal amid fears of a recession. Meanwhile, WTI oil climbed back to the $109 area despite the escalating recession fears that have overshadowed the supply worries again.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD traded 0.54% lower over the last trading day of the week. The Eurozone HICP, the harmonised index of consumer prices, jumped to 86% in May, coming in higher than the 8.3% expectations. Despite the ECB’s efforts to tame inflation, prices are still growing at a pace that threatens price stability. The U.S. Greenback continues to be on the rise as market sentiment continues to be risk-averse and the U.S. equity market continues to fall further into bear territory. U.S. PMI data came in at 52.7, compared to estimates of 52.4, showing growth in purchasing and still signs of a healthy economy.

On the technical side, EURUSD was able to recover from our previously estimated support level of 1.0382 despite falling below this level briefly. A new level of resistance has formed around the 1.0485 price region. RSI for the pair sits at 41.02, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.0485, 1.05754

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD lost 0.68% on the last trading day of the week. The pair gave up gains from the previous day as demand for the U.S. Greenback resumed. The dollar index, which measures the U.S. Dollar against a basket of other major foreign currencies, gained 0.36% to close the week in the green. The U.S. PMI data, which was released during the American trading session, provided fresh optimism for the U.S. Dollar as the figure came in better than expected.

On the technical side, GBPUSD successfully defended our previously estimated support level of 1.20824, despite the pair trading below that level for a brief period during the late European trading session. RSI for Cable sits at 38.1, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated a further 0.31% for the last trading day of the week. After touching a 24-year high on the 29th, USDJPY has been on a two-day short-term correction. However, as the U.S. reported better than expected PMI figures, demand for the U.S. Greenback returned towards the end of the American trading session. Carry trade opportunities continue to exist between these two currencies and are expected to increase as the better PMI provides more confidence for the Fed to hike interest rates by the next FOMC meeting.

On the technical side, USDJPY retreated from our previously estimated resistance level of 136.57 and successfully defended our estimated support level at 134.6. RSI for USDJPY sits at 58.39, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

US stock markets fell on Thursday as the S&P 500 capped its worst first half of the year in more than 50 years. The Dow Jones Industrial Average slid 0.8% and the tech-heavy Nasdaq Composite dropped 1.3%. And the S&P 500 was down 0.9% at the end of the day. Now, the market seems to be forced to adjust back to reality after the unprecedented pandemic and unprecedented monetary policy.

US natural gas future contract plummeted 16%, the worst performance in more than three years. The plunge came after an inventory report showed a larger–than–expected storage build, thus the market rose the concerned over an oversupplied market.

Cryptocurrency exchange FTX is closing a deal to buy struggling cryptocurrency lender BlockFi for $25 million in a fire sale, well below BlockFi’s last valuation. The deal came after FTX provided a $250 million emergency credit to BlockFi. The fallout for BlockFi, a crypto lending company, happened following the major sell-off and the major plunge of crypto assets. Funds have struggled with liquidity issues as counterparties fail to maintain and meet margin calls.

Main Pairs Movement

WTI price plunged 3.44% on Thursday following the news that OPEC+ decided to stick with the planned oil production hike. The Middle East will increase monthly production to 648,000 barrels per day in August with the original plan.

AUD/USD edged 0.40% higher and closed with 0.69013. The Australian dollar out- weighted against the greenback following the concerns that a more aggressive move by major central banks might pose challenges to global economic growth.

EUR/USD advanced 0.43% and finished at 1.04836 at the end of the day. The advance came as Fed Chairman Jerome Powell clarified that the more significant mistake would be to fail to restore price stability.

Gold remained bearish, dropping 0.58%, to $1,807 on Thursday. During the ECB forum, Jerome Powell mentioned that the US economy is well-positioned while imposing more tightening policies in response to inflation. The factor has held back the bets on gold, deteriorating the demand for the precious metal, gold.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD gained 0.34% over the previous trading day. The U.S. PCE figures came in at 0.3%, below estimates of 0.4%; however, year over year PCE came in at 4.7%, in line with the Fed’s expectations. During Fed Chair Jerome Powell’s speech, he stated that price stability would still be the priority of the Fed, but it would be a mistake if the central bank sacrificed the economy to achieve price stability. On the other hand, ECB president Lagarde’s speech did not shed much light on the central bank’s intentions regarding interest rates shortly. On the economic docket, manufacturing PMI from Germany and the U.S. will be released today during the European trading session and the American trading session, respectively.

On the technical side, EURUSD rebounded from our previously estimated support level of 1.038 and is heading up towards 1.0494, which was previously a support level but has since changed polarity and is acting as a short-term resistance level. RSI for EURUSD sits at 43.69, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD gained 0.48% over the previous trading day. The broad-based U.S. Greenback allowed the British Pound to rise against the Dollar. During Governor Andrew Bailey’s speech at the ECB’s annual forum on central banking, he stated that the U.K. is currently being hit with a large income shock that could hurt the overall U.K. economy. The BoE continues to be stuck between raising interest rates and slowing the economy as the country faces a different situation than the U.S., where the economy still seems to be healthy. PMI figures from the U.S. will be released during the American trading session tomorrow.

On the technical side, GBPUSD has consolidated around our previously estimated support level of 1.2123 and successfully found demand to trade higher. Resistance at 1.2381 remains unchallenged. RSI for Cable sits at 41.17, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY retreated 0.68% over the previous trading day. The retreating Dollar snapped a four-day winning streak for USDJPY. During his speech at the ECB forum, Fed chair Jerome Powell reaffirmed the healthiness of the U.S. economy and reiterated the central bank’s commitment to trimming inflation with interest rate hikes. The near-term decrease of the USDJPY will not be sustained as the Fed and the BoJ continues to adopt diverging monetary policies that will increase the interest rate difference between the two countries.

On the technical side, USDJPY has retreated from our previously estimated resistance level of 136.57, but the pair remains firmly on an upward trajectory. The support level at 134.6 remains unchallenged. RSI for USDJPY sits at 61.13, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57

Support: 134.6

Economic Data

Dear Client,

Warmly reminds you that the component stocks in the stock index spot generate dividends. When dividends are distributed, VT Markets will make dividends and deductions for the clients who hold the trading products after the close of the day before the ex-dividend date.

Indices dividends will not be paid/charged as an inclusion along with the swap component. It will be executed separately through a balance statement directly to your trading account, the comment for which will be in the following format “Div & Product Name & Net Volume ”.

Please note the specific adjustments as follows:

Note: The above data is for reference only, the actual execution date may be changed, please refer to the MT4/MT5 software for details.

If you’d like more information, please don’t hesitate to contact [email protected]

US shares were mixed, fluctuating on Wednesday after the major US indices failed to attempt a bounce in the previous trading session. The market prepared to finish to close out the worst first half of the year since 1970. The Dow Jones Industrial Average closed 0.27% higher. The S&P 500 dropped 0.07% while the Nasdaq Composite edged lower by 0.03%. Investors and markets continue to look for the bottom as the first half of 2022 comes to an end on Thursday. Worry about a slowing economy and aggressive interest rate hikes have mostly consumed much of the first half of 2022, and fears and concerns of an economic recession are rising and happening.

At an ECB forum, the Fed Chairman, Jerome Powell, vowed to prevent inflation from taking a hold of the US economy in the long run. Jerome Powell reiterated that central banks would not allow a transition from a low inflation environment into a high inflation environment. Since the Fed started raising interest rates in March, the expectation of inflation has fallen relatively; the inflation-indexed government bonds to standard Treasurys dropped from 3.6% in March to 2.73% in June. Though the road to tackling inflation is painful, the Fed is responsible and is charged with bringing down those inflations.

Main Pairs Movement

EUR/USD was down 0.74%, to 1.04386 on Wednesday. The euro-dollar was comparably weak against the dollar as the inflation rates in Europe seemed disoriented. For instance, some Mediterranean countries have pushed their annual inflations to double figures; however, Europe’s largest country has not experienced this kind of high figure.

GBP/USD edged lower by 0.54 at the end of the day. The British pound was sniped by the fact that the Bank of England acknowledges the possibility that the British economy tips into a recession in 2023; on the contrary, Jerome Powell remains confident that the US can avoid a recession.

USD/JPY reached as much as 137, and was up 0.34% on Wednesday, gaining follow-through traction for the fourth consecutive day. The US dollar pick up a fresh bid tone following Jerome Powell’s restated bets for a more aggressive monetary policy.

Gold oscillated in a tight range, down 0.12%. Investors remained cautious and looked for a fresh clue about the next monetary policy move by the Fed.

Technical Analysis

EURUSD (4-Hour Chart)

EURUSD lost 0.74% over the previous trading day. The pair extended its previous losing day as inflation data from the EU came in mixed. Spain’s inflation rose by 10%, year over year, and up 8.5% over the previous month; on the other hand, Germany’s CPI came in at 7.6%, lower than the 7.9% consensus. The mixed inflation data acted as a headwind for the Euro and a roadblock to more aggressive rate hikes by the ECB. The Dollar continues its upward movement as markets remain risk-averse.

On the technical side, EURUSD has fallen through our previously estimated support level of 1.0494 and is heading lower towards our next estimated support level of 1.0382. RSI of EURUSD sits at 40.66, as of writing. On the four-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.05754, 1.06315

Support: 1.0382

GBPUSD (4-Hour Chart)

GBPUSD lost 0.54% over the previous trading day. The British Pound continues to be held back as members of parliament continue their efforts of overturning a keystone Brexit agreement. Furthermore, hawkish remarks from Fed Chair Jerome Powell have provided a boost to the safe-haven Dollar. Risk-off sentiment across markets has attracted further demand for the U.S. Greenback. On the economic docket, the British GDP is set to release during today’s European trading session.

On the technical side, GBPUSD is consolidating around our previously estimated support level of around the 1.2123 price region. The next level of support for Cable sits at around the 1.20824 price region. RSI for GBPUSD sits at 38.25, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.

Resistance: 1.2381

Support: 1.2123, 1.20824

USDJPY (4-Hour Chart)

USDJPY gained 0.34% over the previous trading day. Hawkish remarks from Fed Chair Jerome Powell have attracted fresh demand for the U.S. Greenback. On top of an already risk-off environment, market participants have continued to bid up the U.S. Dollar as aggressive rate hikes are now expected during the next FOMC meeting. On the economic docket, U.S. PCE and initial jobless claims data will both be released during the American trading session.

On the technical side, USDJPY has once again touched above the 136 level and is consolidating around our previously estimated resistance level of 136.57. Support levels at 134.6 remain firmly intact. RSI for the pair has heated up and sits at 66.14, as of writing. On the four-hour chart, USDJPY currently trades above its 50, 100, and 200-day SMA.

Resistance: 136.57
Support: 134.6

Economic Data

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