A Peaceful Start to the Trading Week.

Calm Day for US Markets

Prior to the highly anticipated Independence Day holiday, the US markets experienced a tranquil day at the beginning of the week. Despite the subdued atmosphere, the major indices managed to secure modest gains. The Dow closed up by 0.03%, the S&P rose by 0.12%, and the Nasdaq experienced a 0.21% increase. Notably, the yield curve in the US reached its most inverted level in decades, with the 2-year bond yielding 110 basis points more than the 10-year bond yield. Currencies remained unchanged, following traditional patterns. Although Saudi Arabia confirmed production curbs, oil prices continued their decline, with WTI falling by 0.7% and trading below $70 per barrel.

Focus on the Reserve Bank of Australia

The Reserve Bank of Australia (RBA) Takes Center Stage

Today, all eyes are on the Reserve Bank of Australia as it prepares to make a critical interest rate decision. Speculation is rife, with market opinions divided on the outcome. While last month’s Consumer Price Index (CPI) statistics fell below expectations, the money markets are almost evenly split on what the RBA will decide. Although the CPI data was lower, other economic indicators such as employment and wage prints have remained stable, making it difficult to predict the RBA’s course of action. Recent hawkish statements from significant central banks have also fueled expectations of an interest rate increase. Traders today eagerly await the rate announcement at 2:30 p.m. Sydney time, fully aware of its potential impact on the market.

US Session: Manufacturing Sector Slows Down

ISM Manufacturing PMI Signals Continued Slowdown

The month of June saw the ISM Manufacturing PMI decline for the eighth consecutive month, reaching its lowest level yet at 46.0. This downward trend indicates ongoing instability in new orders, production, and employment within the US manufacturing sector. Encouragingly, the ISM prices index fell from 44.2 to 41.8, providing some relief from inflationary pressures. As a consequence of these poll results, the dollar index (DXY) experienced a sharp decline, briefly reaching a low of 102.75 before swiftly rebounding to the 103 area.

Asia Session: Dollar Weakness Expected

ISM Survey Results and Dollar Weakness

Although the ISM survey results were initially expected to drive further weakness in the dollar, the decline in demand for the US currency during the US session was only temporary. However, at the start of the Asian session, DXY is showing signs of weakness, and as the day progresses, the dollar sell-off may intensify.

The Australian Dollar (AUD): Today’s Outlook

Key News Events: RBA Cash Rate Statement

Today’s focus remains on the Reserve Bank of Australia (RBA), with the release of its Cash Rate Statement. Given the significant decline in inflationary pressures in May, it is highly likely that the RBA will maintain its official cash rate at 4.10% and adopt a dovish view on future monetary policy actions.

Central Bank Notes:

• The RBA recently increased the cash rate target by 25 basis points to 4.10%.
• Inflation in Australia has reached a peak but remains high at 7% and needs to return to the target range.
• There is a possibility of further tightening of monetary policy.
• The next RBA meeting is scheduled for July 4, 2023.

Next 24 Hours Bias: Weak Bearish

The Canadian Dollar (CAD): Today’s Expectations

Key News Events: Manufacturing PMI

Today, we anticipate another disappointing reading of Canadian manufacturing activity for the previous month.

Central Bank Notes:

• The Bank of Canada recently increased its overnight rate target to 4.75%.
• Canada’s economy performed better than expected in the first quarter of 2023, with GDP growth of 3.1%.
• The Bank foresees CPI inflation easing to around 3% during the summer, but concerns remain about inflation remaining above the 2% target.
• The next Bank of Canada meeting is scheduled for July 12, 2023.

Next 24 Hours Bias: Medium Bearish

Oil: Today’s Expectations

Key News Events: No Major News Events

Today, crude prices experienced a decline due to the ongoing shrinkage of the US industrial sector. WTI oil fell below the $70 per barrel threshold. Although WTI’s rise above $70 per barrel initially provided support for crude prices, they may encounter obstacles as the day progresses.

Next 24 Hours Bias: Weak Bearish

Global Market Update

Asian Stock Markets:

• Nikkei is down 1.07%
• Shanghai Composite is down 0.24%
• Hang Seng is down 0.11%
• ASX up 0.42%

European Equities:

• DAX futures are down 0.41%
• CAC 40 is down 0.18%
• FTSE down 0.06%

US Stock Market:

• Dow Jones is up 0.03%
• S&P 500 is up 0.12%
• Nasdaq 100 is up 0.21%

Commodities:

• Gold at $1924.67 (+0.2%)
• Silver at $22.90 (+0.16%)
• Brent Oil at $74.92 (+0.36%)
• WTI Oil at $70.04 (+0.36%)

Notable News & Data:

• (AUD) RBA Interest Rate Decision (Jun) Actual 4.10%, Forecast 4.35%, Previous 4.10% at 10:00
• (CAD) Manufacturing PMI (Jun) Forecast 49.6, Previous 49.0 at 19:00
• (NZD) NZIER Business Confidence (Q2) Actual –63%, Previous 66% at 03:30
• (EUR) Spanish Unemployment Change Forecast –63.5K, Previous –49.3K at 12:30

GBPUSD: Neutral Momentum Observed on the Chart

Market Direction Indiscernible

The GBP/USD chart currently lacks a clear market direction, with neutral momentum being observed. The price movement has the potential to occur within the range of the first support level at 1.2683 and the first resistance level at 1.2754.

Support and Resistance Levels

• First Support Level: 1.2683
  • Overlap Support: Supported by the presence of the 50% Fibonacci Retracement.
• Second Support Level: 1.2590
  • Overlap Supports: Overlaps with the first support level and is reinforced by the 50% Fibonacci Retracement.
• First Resistance Level: 1.2754
  • Multi-Swing Strong Barrier: Features Fibonacci confluence from the 78.60% Fibonacci Retracement.
• Second Resistance Level: 1.2821
  • Overlap Resistance: Noted as an overlap with the second resistance level.

Symmetrical Triangular Pattern

It’s important to note that the chart displays a symmetrical triangular pattern, indicating a period of consolidation. A bullish breakout would be suggested by a breakout above the upper trendline of the pattern, while a bearish breakdown would be indicated by a breakdown below the lower trendline.

TRADE SUGGESTION: Buy at 1.2702 Take Profit at 1.2780 Stop Loss at 1.2637

EURUSD: Bearish Momentum on the Chart

Lower Market Trend Suggested

The EUR/USD chart currently exhibits bearish momentum, indicating a downward market trend. In the future, the bearish approach may lead to approaching the first support level at 1.0847. This support level is designated as overlap support.

Support and Resistance Levels

• First Support Level: 1.0847
  • Overlap Support: Designated as overlap support.
• Second Support Level: 1.0789
  • Overlap Support: Overlaps with the first support level.
  • Fibonacci Confluence: Coincides with the 61.80% Fibonacci Retracement and the -27% Fibonacci Expansion.
• First Resistance Level: 1.0911
  • Overlap Resistance: Intersects with the 50% and 61.80% Fibonacci Retracement levels.
• Second Resistance Level: 1.0995
  • Swing High Resistance: Supported by the existence of the 78.60% Fibonacci Retracement.

Symmetrical Triangle Pattern

Similar to the GBP/USD chart, a symmetrical triangle chart pattern is also present on the EUR/USD chart, indicating a period of consolidation. A bullish breakout would be suggested by a breakout above the upper trendline of the pattern, while a bearish breakdown would be indicated by a breakdown below the lower trendline.

TRADE SUGGESTION: Sell at 1.0911 Take Profit at 1.0888 Stop Loss at 1.0930

AUDUSD: Sluggish Positive Trend with Low Confidence

Sluggish Positive Trend

The AUD/USD instrument currently exhibits a sluggish positive trend, indicating limited momentum and low confidence. There is a possibility of the price continuing in a bullish direction toward the first resistance.

Support and Resistance Levels

• First Support Level: 0.6651
  • Overlap Support: Provides a strong foundation due to its overlap support nature.
• Second Support Level: 0.6616
  • Overlap Support: Overlaps with the first support level.
  • 78.60% Fibonacci Retracement: Adds strength to the support level.
• First Resistance Level: 0.6677
  • Swing-High Resistance: This presents a significant obstacle due to its swing-high resistance feature.
  • 38.20% Fibonacci Retracement: Further strengthens the resistance level.
• Second Resistance Level: 0.6710
  • Swing High Resistance: Poses a significant barrier due to its swing high resistance feature.
  • 61.80% Fibonacci Retracement: Reinforces the resistance level.

Weakening Positive Momentum

The intermediate resistance at 0.6676 serves as an overlap resistance and a 61.80% Fibonacci Retracement. These factors work together to weaken the positive momentum of the AUD/USD instrument, resulting in low confidence.

TRADE SUGGESTION: Buy at 0.6673 Take Profit at 0.6705 Stop Loss at 0.6642

USDJPY: Upward Trend Detected

Positive Trend

The USD/JPY instrument is currently trending upward, indicating a positive momentum. This suggests that the price may continue to rise toward the first resistance level.

Support and Resistance Levels

• First Support Level: 143.83
  • Overlap Support: Offers a strong base due to its overlap support nature.
  • 23.60% Fibonacci Retracement: Further reinforces the support level.
• Second Support Level: 142.25
  • Overlap Support: Provides a strong base due to its overlap support feature.
  • 50% Fibonacci Retracement: Adds strength to the support level.
• First Resistance Level: 144.96
  • Swing-High Resistance: This presents a substantial obstacle due to its swing-high resistance feature.
• Second Resistance Level: 146.81
  • Swing High Resistance: Poses a significant barrier due to its swing high resistance feature.

Positive Momentum Supported

The combination of overlap support levels and Fibonacci retracement levels supports the positive momentum of the USD/JPY instrument.

TRADE SUGGESTION: Buy at 144.67 Take Profit at 145.64 Stop Loss at 143.95

DAX 40: Bullish Momentum on the Chart

Market Upward Tendency

The DAX 40 chart currently shows a bullish momentum, signaling a market upward tendency. The price may experience a positive reversal from the first support level at 16121.03 toward the first resistance level at 16323.00.

Support and Resistance Levels

• First Support Level: 16121.03
  • Overlap Support: Confirmed by the existence of the 23.60% Fibonacci Retracement.
• Second Support Level: 15846.01
  • Fibonacci Confluence: Coincides with the 61.80% Fibonacci Retracement.
  • Overlap Support: Provides additional support.
• First Resistance Level: 16323.00
  • Overlap Barrier: May hinder further price growth.
• Second Resistance Level: 16561.05
  • Pullback Resistance: Recognized as a resistance level during a pullback.
  • 78.60% Fibonacci Retracement: Reinforces the resistance level.

TRADE SUGGESTION: Buy at 16174.7 Take Profit at 16312.9 Stop Loss at 16048.4

WTI CRUDE OIL: Positive Momentum Suggests Upward Movement

Positive Momentum

The Brent Crude Oil chart currently exhibits positive momentum, indicating the possibility of further upward movement in the market.

Support and Resistance Levels

• First Support Level: 74.89
  • Overlap Support: Designated as an overlap support.
• Second Support Level: 71.46
  • Fibonacci Confluence: Coincides with the 61.80% Fibonacci Projection and the 78.60% Fibonacci Retracement.
  • Pullback Support: Acts as a support level during pullbacks.
• First Resistance Level: 77.09
  • Swing High Resistance: Constitutes a swing-high resistance.
  • 78.60% Fibonacci Retracement: Reinforces the resistance level.
• Second Resistance Level: 79.38
  • Multi-Swing High Resistance: Referred to as a resistance level during multiple swing highs.

TRADE SUGGESTION: Buy at 75.15 Take Profit at 76.66 Stop Loss at 73.87

SILVER: Sluggish Positive Trend with Low Confidence

Sluggish Positive Trend

Currently, the silver instrument shows a sluggish positive trend with low confidence. However, a bullish reversal towards the first resistance level may still be possible.

Support and Resistance Levels

• First Support Level: 22.26
  • Overlap Support: Located at a Fibonacci confluence with the 61.80% Fibonacci projection level and the 38.20% Fibonacci retracement level.
• Second Support Level: 21.44
  • Pullback Support: Acts as strong pullback support.
  • 78.60% Fibonacci Retracement: Key Fibonacci retracement level.
• First Resistance Level: 23.02
  • Overlap Barrier: Serves as an overlap resistance.
• Second Resistance Level: 23.98
  • Overlap Resistance: Also referred to as intermediate resistance.

Crucial Support and Resistance Levels

These support and resistance levels play a crucial role in determining the future course of the sluggish bullish trend in silver.

TRADE SUGGESTION: Buy at 23.00 Take Profit at 23.42 Stop Loss at 22.66

BITCOIN: Positive Momentum Indicates Upward Movement

Positive Momentum

The BTC/USD instrument currently exhibits positive momentum, suggesting that the price may maintain its positive trend toward the first resistance level.

Support and Resistance Levels

• First Support Level: 30473
  • Overlap Support: Supported by both overlap support and a 23.60% Fibonacci Retracement.
• Second Support Level: 29589
  • Overlap Support: Offers a strong base due to its overlap support nature.
  • 50% Fibonacci Retracement: Reinforces the support level.
• First Resistance Level: 31025
  • Overlap Resistance: Presents a sizable challenge due to its overlap resistance.
  • 61.80% Fibonacci Projection: Strengthens the resistance level.
• Second Resistance Level: 32367
  • Swing High Resistance: Poses a significant obstacle due to its swing high resistance feature.

Upward Momentum Supported

The combination of overlap support levels, Fibonacci retracement levels, and swing-high resistance levels supports the upward momentum of BTC/USD.

TRADE SUGGESTION: Buy at 30931 Take Profit at 31320 Stop Loss at 30607

Frequently Asked Questions

1. What were the market gains for major US indices at the start of the trading week?

• The Dow closed up by 0.03%, the S&P rose by 0.12%, and the Nasdaq experienced a 0.21% increase.

2. What was the yield curve like in the US?

• The yield curve in the US reached its most inverted level in decades, with the 2-year bond yielding 110 basis points more than the 10-year bond yield.

3. Did oil prices continue to fall despite Saudi Arabia’s confirmation of production curbs?

• Yes, oil prices continued to fall. The WTI fell 0.7% and traded back below $70 per barrel.

4. What can we expect from the Reserve Bank of Australia’s interest rate decision?

• The markets are split on what the RBA will decide. While there is a slight bias towards a hold, speculators are uncertain due to conflicting economic indicators.

5. What was the ISM Manufacturing PMI for June?

• The ISM Manufacturing PMI for June fell to 46.0, marking the eighth consecutive month of decline and the lowest level to date.