Wall St Ends Up Ahead of CPI; JPMorgan, Financial Shares Gain.

Introduction

In this market update, we’ll discuss the recent happenings in the financial world. U.S. stocks saw an increase on Tuesday, driven by optimism ahead of significant inflation data and the rally of JPMorgan and other financial firms before their upcoming earnings reports. Investors are eagerly awaiting further information to gauge whether price pressures are easing and whether the Federal Reserve is nearing the end of its interest rate hikes. Additionally, we’ll cover key news events and expectations for major currencies such as the Dollar, Kiwi, and Canadian Dollar.

What Happened in the Asia Session?

The Reserve Bank of New Zealand (RBNZ) Keeps OCR Unchanged

The Reserve Bank of New Zealand (RBNZ) announced that it would maintain its official cash rate (OCR) at 5.50%, as expected. The RBNZ also decided to keep its forward guidance unchanged, as it foresees low-interest rates in the foreseeable future. This move aims to sustain long-term employment while ensuring that consumer inflation returns to the target range of 1% to 3% annually.

Implications for the Europe & US Session

U.S. CPI Data: A Key Focus for Traders

The U.S. CPI data, set to be released later today, will be closely monitored by traders following the RBNZ OCR announcement. Traders will pay particular attention to both the headline print and the core reading on a monthly and annualized basis. Given the recent weakness of the U.S. dollar since last Thursday, a lower-than-expected consumer inflation figure could intensify the current sell-off and potentially push the Dollar Index (DXY) toward the 101 level.

The Dollar Index (DXY)

Key News Events Today: CPI

Traders are eagerly awaiting the release of the CPI numbers for June, making it one of the most anticipated economic events of the week in the United States. While the headline CPI has experienced a significant decline, the core reading has remained relatively stable. However, if the reading turns out to be generally “soft,” the U.S. dollar’s decline is expected to accelerate.

Central Bank Notes:

• The federal funds rate target range will be 5 to 5-1/4 percent.
• The Committee is strongly committed to returning inflation to its 2% target.
• The Committee will adjust monetary policy if risks emerge that could hinder achieving its goals.
• Various factors, including labor market conditions, inflation pressures, inflation expectations, and international and financial developments, will be considered.
• The next meeting is scheduled for July 26, 2023.

Next 24 Hours Bias: Medium Bearish

The Kiwi Dollar (NZD)

Key News Events Today: RBNZ Official Cash Rate Statement

Following the RBNZ’s announcement, the Kiwi dollar experienced a decline after reaching a high of 0.6240 during the Asia session. The specific details of the cash rate statement are outlined below.

Central Bank Notes:

• The Monetary Policy Committee decided to hold the OCR steady at 5.50%.
• The Committee believes that keeping interest rates at a restrictive level for some time will bring inflation back within the annualized target range of 1% to 3% while supporting maximum sustainable employment.
• A consensus was reached to leave the OCR unchanged at 5.50%.
• Restrictive interest rates are necessary to ensure inflation returns to the target range while supporting maximum sustainable employment.
• The next meeting is scheduled for August 16, 2023.

Next 24 Hours Bias: Strong Bearish

The Canadian Dollar (CAD)

Key News Events Today: BoC Overnight Rate Statement, BoC Monetary Policy Report, BoC Press Conference

Following the release of the U.S. CPI data, the Bank of Canada (BoC) is expected to announce its overnight rate and hold a news conference. It is widely anticipated that the BoC will increase the rate by 25 basis points to 5.00%. As a result, the Canadian dollar’s volatility is likely to be significant during the U.S. session.

Central Bank Notes:

• The Bank of Canada increased its target for the overnight rate to 4.75%.
• Canada’s economy performed better than expected in the first quarter of 2023, with a GDP growth rate of 3.1%.
• The Bank expects CPI inflation to ease to around 3% in the summer, but concerns have arisen regarding inflation remaining above the 2% target.

Next meeting on July 12, 2023

Next 24 Hours Bias: Medium Bearish

Global Markets

Asian Stock Markets:

• Nikkei is down 0.81%
• Shanghai Composite is down 0.78%
• Hang Seng up 0.77%
• ASX up 0.38%

European Equities:

• DAX futures are up 0.75%
• CAC 40 up 0.00%
• FTSE up 0.19%

U.S. Stock Market:

• Dow Jones is up 0.93%
• S&P 500 is up 0.67%
• Nasdaq 100 is up 0.55%

Commodities:

• Gold at $1934.43 (+0.12%)
• Silver at $23.14 (+0.11%)
• Brent Oil at $79.42 (+0.09%)
• WTI Oil at $74.87 (+0.05%)

News & Data

Upcoming Key Events:

• (NZD) RBNZ Interest Rate Decision Actual 5.50%, Forecast 5.50%, Previous 5.50% at 07:30
• (GBP) BoE Gov Bailey Speaks at 14:00
• (USD) CPI (MoM) (Jun) Forecast 0.3%, Previous 0.1% at 18:00
• (USD) Core CPI (MoM) (Jun) Forecast 0.3%, Previous 0.4% at 18:00
• (CAD) BoC Interest Rate Decision Forecast 5.00%, Previous 4.75% at 19:30
• (CAD) BoC Press Conference at 20:30

GBP/USD Shows Bullish Momentum, Targeting First Barrier Level

The GBP/USD pair is currently exhibiting positive momentum, indicating a likely continuation of the bullish trend toward the first barrier level. Key support and resistance levels provide important reference points for traders.

Support Levels

The first support level for GBP/USD is located at 1.2935. This level is known as overlap support, providing significant price stability. In case of a downward movement, it acts as a crucial support. Furthermore, the second support level at 1.2913 also serves as an overlap support, offering additional security against potential negative price fluctuations.

Resistance Levels

The price of GBP/USD may continue to rise in a bullish direction, targeting the first resistance level at 1.2952. This particular resistance level aligns with the 161.80% Fibonacci expansion level, a 78.60% Fibonacci retracement level, and a 78.60% Fibonacci projection level. The confluence of these Fibonacci levels makes it a significant barrier for further upward movement.

If the price manages to break through the first resistance level, the second resistance level at 1.2970 becomes the next target. This level is also an overlap resistance, and it adds another potential roadblock for the price to overcome, being situated at a 100% Fibonacci projection level.

Trade Suggestion

Based on the current analysis, a trade suggestion for GBP/USD is as follows:

• Entry: Buy at 1.2945
• Take Profit: 1.2962
• Stop Loss: 1.2933

Please note that trading decisions should be made with careful consideration of market conditions and individual risk tolerance.

EUR/USD Demonstrates Positive Trend, Eyeing First Barrier Level

The EUR/USD pair is currently displaying a positive trend, indicating the potential for a bullish continuation toward the first barrier level. Support and resistance levels play a crucial role in assessing price movements.

Support Levels

The first support level for EUR/USD is observed at 1.1023, which is an overlap support providing significant stability to the price. This level acts as a major support in case of downward movements. Additionally, the second support level at 1.1016 serves as another layer of support, cushioning any further decline.

Resistance Levels

Price may continue its upward movement in a bullish trend, targeting the first resistance level at 1.1029. This resistance level is particularly notable as it aligns with a 61.80% Fibonacci projection level, adding to its significance.

If the price manages to surpass the first resistance, it may aim for the second resistance level at 1.1036. This level is also an overlap resistance, potentially posing a significant obstacle to further price increases as it coincides with a -27% Fibonacci expansion level.

Trade Suggestion

Considering the current analysis, a trade suggestion for EUR/USD is as follows:

• Entry: Buy at 1.1022
• Take Profit: 1.1028
• Stop Loss: 1.1018

Remember to assess your own risk tolerance and market conditions before making any trading decisions.

AUD/USD Displays Positive Momentum, Heading Towards First Barrier Level

The AUD/USD currency pair is currently showing a positive trend, indicating the potential for further upward movement toward the first barrier level. Key support and resistance levels provide important reference points for traders.

Support Levels

The first support level, overlap support, can be found at 0.6689. This level acts as a solid support zone in case of price declines. Additionally, the second support level at 0.6655 serves as a pullback support, offering further support if the price falls below the first support.

Resistance Levels

On the other hand, if the bullish momentum continues, the price may target the first resistance level at 0.6712. This overlap resistance level coincides with a 50% Fibonacci retracement, making it a notable barrier for further price increases.

If the price manages to surpass the first obstacle, it may aim for the second resistance level at 0.6742. This level is also an overlap resistance, serving as a significant roadblock to additional price ascent.

Trade Suggestion

Based on the current analysis, a trade suggestion for AUD/USD is as follows:

• Entry: Buy at 0.6692
• Take Profit: 0.6718
• Stop Loss: 0.6673

Please consider your own risk tolerance and market conditions before making any trading decisions.

USD/JPY Indicates Bearish Momentum, Targeting First Resistance Level

The USD/JPY pair is currently exhibiting bearish momentum, suggesting a potential bearish bounce off the first support level, leading to a movement toward the first resistance level.

Support Levels

The first support level for USD/JPY is located at 139.43. This level is significant as it represents solid retreat support, aligning with a 100% Fibonacci projection and a 61.8% Fibonacci retracement. It is expected to provide substantial support if the price responds favorably.

In case the price breaks through the first support level, it may potentially decline to the second support level at 139.91. This level is an effective overlap support, offering additional stability.

Resistance Levels

If the price bounces off the first support level, it may advance toward the first resistance level at 141.33. This level is a substantial retreat resistance, acting as a significant barrier to further price increases.

Further upward movement may lead the price to target the second resistance level at 142.67. This level also serves as a retreat resistance, potentially posing a significant roadblock to additional price increases.

Trade Suggestion

Considering the current analysis, a trade suggestion for USD/JPY is as follows:

• Entry: Sell at 139.44
• Take Profit: 138.91
• Stop Loss: 139.86

Please note that trading decisions should be made with careful consideration of market conditions and individual risk tolerance.

DAX 40 Demonstrates Bullish Momentum, Aiming for First Resistance Level

The DAX 40 index is currently displaying a bullish momentum, indicating the potential for further upward movement toward the first resistance level. Key support and resistance levels provide important reference points for traders.

Support Levels

The first support level for the DAX 40 is located at 15702.38. This level is considered important as it represents overlap support. Furthermore, the second support level at 15483.16 acts as a multi-swing low support, offering strong support to the price.

Resistance Levels

The first resistance level to watch for is 15926.65. This level is an overlap resistance and carries additional significance as it aligns with a 61.80% Fibonacci retracement and a 100% Fibonacci projection level. This confluence of Fibonacci levels makes it a notable barrier.

If the price manages to break through the first resistance level, it may aim for the second resistance level at 16216.44. This level represents a swing-high resistance and is expected to act as another significant roadblock for further price increases.

Trade Suggestion

Based on the current analysis, a trade suggestion for the DAX 40 is as follows:

• Entry: Buy at 15962.0
• Take Profit: 16313.7
• Stop Loss: 15664.4

Please consider your own risk tolerance and market conditions before making any trading decisions.

WTI Crude Oil Shows Positive Momentum, Targeting First Resistance Level

WTI Crude Oil (WTI/USD) is currently displaying positive momentum, indicating the potential for further upward movement toward the first resistance level. Key support and resistance levels provide important reference points for traders.

Support Levels

The first support level for WTI Crude Oil is observed at 72.05. This level is considered to overlap support, offering substantial support in case of price declines. The second support level at 68.96 also acts as an overlap support, adding an additional layer of support below the first.

Resistance Levels

If the bullish trend continues, the price may encounter the first resistance level at 74.66. This overlap resistance level carries significance as it aligns with a 61.8% Fibonacci retracement level and a 161.8% Fibonacci extension level. It is expected to act as a barrier to further price increases.

Should the price manage to surpass the first resistance, it could aim for the second resistance level at 78.43. This level is also an overlap resistance and represents another important point of potential resistance.

Trade Suggestion

Based on the current analysis, a trade suggestion for WTI Crude Oil is as follows:

• Entry: Buy at 74.66
• Take Profit: 78.43
• Stop Loss: 72.15

Please remember to assess your own risk tolerance and market conditions before making any trading decisions.

Gold Demonstrates Bullish Momentum, Targeting First Resistance Level

Gold (XAU/USD) is currently showing bullish momentum, suggesting the potential for further upward movement toward the first resistance level. Key support and resistance levels provide important reference points for traders.

Support Levels

The first support level for Gold is located at 1899.74. This level is considered to overlap support, providing significant stability to the price. In case of a decline, it acts as a major support zone. Additionally, the second support level at 1858.16 is also overlap support, offering additional support if the price drops below the first support.

Resistance Levels

Price may continue to rise in a bullish trend towards the first resistance level at 1933.89. This overlap resistance level aligns with a 78.60% Fibonacci retracement, adding to its significance as a potential barrier to further price increases.

If the price manages to surpass the first resistance level, it may aim for the second resistance level at 1979.93. This level is another overlap resistance and may act as a significant roadblock to additional price increases.

Trade Suggestion

Based on the current analysis, a trade suggestion for Gold is as follows:

• Entry: Buy at 1937.91
• Take Profit: 1952.52
• Stop Loss: 1928.81

Please consider your own risk tolerance and market conditions before making any trading decisions.

Litecoin Exhibits Neutral Momentum, Trading Between Support and Resistance

Litecoin (LTC/USD) currently demonstrates neutral momentum, potentially moving back and forth between the first support and first resistance levels. Key support and resistance levels offer important reference points for traders.

Support Levels

The first support level for Litecoin is located at 93.25. This level is considered strong due to its overlap support and a 23.60% Fibonacci retracement. It provides solid retreat support in case of a downward movement. The second support level at 88.39 is also overlap support and is regarded as strong.

Resistance Levels

On the other hand, the first resistance level at 97.22 is significant as it represents a multi-swing high resistance and a 61.80% Fibonacci retracement. It serves as an important barrier to further upward movement. The second resistance level at 102.95 is a swing-high resistance and has the potential to act as a significant roadblock to any upward trend in price.

Trade Suggestion

Considering the current analysis, a trade suggestion for Litecoin is as follows:

• Entry: Buy at 98.04
• Take Profit: 102.73
• Stop Loss: 94.19

Conclusion

In conclusion, the financial markets continue to be influenced by key events, such as the release of inflation data and central bank decisions. Traders and investors are closely watching the CPI numbers for the United States, as well as the developments in major currencies like the Dollar, Kiwi, and Canadian Dollar. Stay tuned for further updates and analysis as the markets evolve.