Euro and Pound Face Downward Pressure Amid Dollar Surge.

Introduction

In the realm of U.S. equities, there’s been a notable surge on Tuesday, primarily attributed to a series of robust bank reports that have propelled the Dow Jones to an impressive winning streak, lasting more than two years. Let’s delve into the significant developments and explore the factors that have contributed to this market momentum.

Morgan Stanley Surpasses Expectations with a Remarkable Surge

Morgan Stanley (MS. N), the renowned financial institution, has witnessed a substantial increase in its shares by a staggering 6.45% in a single day, marking its most significant one-day percentage gain since November 9, 2020. The surge was fueled by their wealth management unit’s impressive growth, which effectively offset decreased trading revenue.

Other Banks Follow Suit with Substantial Gains

Notably, the release of quarterly results from other banks has also triggered positive reactions in the market. PNC Financial (PNC.N) and Bank of New York Mellon (BK. N) experienced gains of 4.11% and 2.51%, respectively, on Tuesday.

Cooling Inflation in UK Markets Draws Attention

Investors are closely monitoring the United Kingdom’s important inflation data scheduled for release today. While the year-over-year comparison had previously shown high levels around 10%, it has recently decreased. Market participants will be keeping a keen eye on the data to gauge the impact of potential rate hikes. The Bank of England will assess substantial evidence of declining inflation to determine the trajectory of its tightening cycle. The anticipated print is 8.2%, down from the previous month’s 8.7%. Any significant deviation from expectations could lead to heightened volatility in cable.

Asia Session Sees Demand for US Dollar

During the Asia session, the US dollar enjoyed high demand, outperforming its competitors and pushing the dollar index (DXY) above 100. With inflation data from the UK and the Eurozone anticipated later in the day, it could serve as a potential catalyst for FX markets, especially as the calendar is relatively sparse during the Asian trading hours.

Europe & US Session: Euro and Pound Under Pressure

Given the steady decline in inflation rates over the past eight to ten months in both the Eurozone and the UK, the US dollar’s strong demand could further impact the Euro and the pound, leading to potential devaluation. Moreover, further progress in the US residential construction industry could bolster the dollar.

The Euro (EUR): Focus on CPI

Today’s key news event for the Euro is the Consumer Price Index (CPI). In recent months, the Eurozone’s annualized inflation rate has been declining. The latest measurement indicates a predicted decrease from 6.1% YoY in May to 5.5% YoY in June. As the demand for the US dollar rises, the Euro retraces after reaching a high of 1.1270 this week.

Central Bank Notes:

• The European Central Bank (ECB) has raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will keep interest rates sufficiently restrictive to achieve the inflation target and maintain them at those levels as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• The next meeting is scheduled for 27 July 2023.

The Pound (GBP): Focus on CPI and PPI

Today’s key news events for the Pound include the Consumer Price Index (CPI) and the Producer Price Index (PPI). Both consumer and wholesale inflation in the UK has been consistently declining since November of the previous year. Current estimates suggest that this negative trend continues. The pound has dropped below 1.3050 and is expected to approach the 1.3000 mark.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) has voted to increase the Bank Rate by 0.5 percentage points to 5%.
• Two members preferred to maintain the Bank Rate at 4.5%.
• CPI inflation is expected to fall significantly due to developments in energy prices.
• The updated projections show that CPI inflation is expected to decline slightly above 1% at the two and three-year horizons, below the 2% target.
• The next meeting is scheduled for 3 August 2023.

Oil Market: EIA Crude Oil Inventories in Focus

The oil market is anticipating the EIA Crude Oil Inventories report. Only 800k barrels were removed from API’s weekly crude oil inventories, which is far less than the predicted 2.3M barrels. The EIA expects a reduction in inventories later today, which might maintain high crude oil prices. WTI oil increased from $74 to $75.80 per barrel overnight, but without confirmation of the EIA drawdown, crude prices may decline from this level.

Global Markets Update

Asian Stock Markets:

• Nikkei is up 1.24%
• Shanghai Composite up 0.03%
• Hang Seng down -0.25%
• ASX up 0.55%

European Equities:

• DAX futures are up 0.12%
• CAC 40 down –0.34%
• FTSE up 1.18%

US Stock Market:

• Dow Jones is up 1.06%
• S&P 500 is up 0.74%
• Nasdaq 100 is up 0.76%

Commodity Prices:

• Gold at $1978.69 (+0.02%)
• Silver at $25.05 (+0.02%)
• Brent Oil at $79.82 (+0.24%)
• WTI Oil at $75.69 (+0.04%)

Important News & Data

• (NZD) CPI (QoQ) (Q2) Actual 1.1%, Forecast 1.0%, Previous 1.2% at 04:15
• (GBP) CPI (YoY) (Jun) Actual 7.9%, Forecast 8.2%, Previous 8.7% at 11:30
• (EUR) CPI (YoY) (Jun) Forecast 5.5%, Previous 6.1% at 14:30
• (USD) Building Permits (Jun) Forecast 1.490M, Previous 1.496M at 18:00
• (USD) Crude Oil Inventories Forecast –2.440M, Previous 5.946M at 20:00

Expert Analysis: Currency and Commodity Market Trends

GBPUSD: Evaluating Moving Averages and Indicators

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 1.3011, suggesting a Sell sentiment.
2. EMA 20: The 20-day EMA displays 1.2999, reinforcing a Sell indication.
3. EMA 50: With a value of 1.2885, the 50-day EMA aligns with a Buy recommendation.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows 1.3032, indicating a Sell sentiment.
2. SMA 20: The 20-day SMA records 1.3026, supporting a Sell stance.
3. SMA 50: The 50-day SMA stands at 1.2837, signifying a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, displays a reading of 43.14, suggesting a neutral signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a negative condition.

Resistance and Support Levels

• Resistance: The resistance level is identified at 1.2993.
• Support: The support level is observed at 1.2923.

Summary and Trade Suggestions

Based on the technical analysis, GBP/USD presents a sell outlook. Traders may consider entering a long position, considering the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 1.2865
• Take Profit: 1.2748
• Stop Loss: 1.2971

EURUSD: Understanding Market Trends

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 1.1229, indicating a Buy signal.
2. EMA 20: The 20-day EMA is at 1.1164, signalling a Buy sentiment.
3. EMA 50: The 50-day EMA currently sits at 1.1053, suggesting a Buy indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 1.1232, reinforcing the Sell recommendation.
2. SMA 20: With a value of 1.1165, the 20-day SMA also supports a Buy sentiment.
3. SMA 50: The 50-day SMA registers at 1.1011, affirming a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 72.93, signifying a Buy signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a Negative stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 1.1244.
• Support: The support level is identified at 1.1202.

Summary and Trade Suggestions

In summary, the technical analysis of EURUSD points towards a buying sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 1.1269
• Take Profit: 1.1371
• Stop Loss: 1.1193

AUDUSD: Unraveling Trading Patterns

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 0.6791, indicating a Sell signal.
2. EMA 20: The 20-day EMA is at 0.6742, signalling a Buy sentiment.
3. EMA 50: The 50-day EMA currently sits at 0.6714, suggesting a Buy indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 0.6823, reinforcing the sell recommendation.
2. SMA 20: With a value of 0.6713, the 20-day SMA also supports a Buy sentiment.
3. SMA 50: The 50-day SMA registers at 0.6686, affirming a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 54.46, signifying a Buy signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a negative stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 0.6792.
• Support: The support level is identified at 0.6745.

Summary and Trade Suggestions

In summary, the technical analysis of AUDUSD points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 0.6816
• Take Profit: 0.6893
• Stop Loss: 0.6763

USDJPY: A Comprehensive Market Overview

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 139.32, indicating a buy signal.
2. EMA 20: The 20-day EMA is at 140.79, signalling a Sell sentiment.
3. EMA 50: The 50-day EMA currently sits at 139.98, suggesting a Sell indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 138.81, reinforcing the buy recommendation.
2. SMA 20: With a value of 142.09, the 20-day SMA also supports a Sell sentiment.
3. SMA 50: The 50-day SMA registers at 140.38, affirming a Sell indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 40.21, signifying a Sell signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a positive stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 140.01.
• Support: The support level is identified at 138.76.

Summary and Trade Suggestions

In summary, the technical analysis of USDJPY points towards a Sell sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 138.00
• Take Profit: 135.82
• Stop Loss: 139.93

S&P 500: Analyzing Market Trends

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 4558.38, indicating a buy signal.
2. EMA 20: The 20-day EMA is at 4482.68, signalling a Buy sentiment.
3. EMA 50: The 50-day EMA currently sits at 4379.38, suggesting a Buy indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 4559.19, reinforcing the Buy recommendation.
2. SMA 20: With a value of 4475.43, the 20-day SMA also supports a Buy sentiment.
3. SMA 50: The 50-day SMA registers at 4355.81, affirming a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 76.01, signifying a neutral signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a positive stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 4591.75.
• Support: The support level is identified at 4553.25.

Summary and Trade Suggestions

In summary, the technical analysis of the S&P 500 points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 4601.18
• Take Profit: 4637.08
• Stop Loss: 4574.12

WTI CRUDE OIL: A Comprehensive Review

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 75.17, indicating a Buy signal.
2. EMA 20: The 20-day EMA is at 74.59, signalling a Buy sentiment.
3. EMA 50: The 50-day EMA currently sits at 73.23, suggesting a Buy indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 74.93, reinforcing the Buy recommendation.
2. SMA 20: With a value of 75.03, the 20-day SMA also supports a Buy sentiment.
3. SMA 50: The 50-day SMA registers at 72.56, affirming a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 63.21, signifying a Buy signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a positive stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 76.13.
• Support: The support level is identified at 74.65.

Summary and Trade Suggestions

In summary, the technical analysis of WTI Crude Oil points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 76.77
• Take Profit: 78.57
• Stop Loss: 75.23

GOLD: Unveiling Precious Metal Market Trends

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 1972.19, indicating a Buy signal.
2. EMA 20: The 20-day EMA is at 1955.64, signalling a Buy sentiment.
3. EMA 50: The 50-day EMA currently sits at 1943.26, suggesting a Buy indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 1972.02, reinforcing the Buy recommendation.
2. SMA 20: With a value of 1954.80, the 20-day SMA also supports a Buy sentiment.
3. SMA 50: The 50-day SMA registers at 1931.37, affirming a Buy indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 72.42, signifying a Buy signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a neutral stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 1982.03.
• Support: The support level is identified at 1969.67.

Summary and Trade Suggestions

In summary, the technical analysis of gold points towards a Buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 1989.09
• Take Profit: 2012.05
• Stop Loss: 1972.32

BITCOIN: Navigating the Cryptocurrency Market

Exponential Moving Average (EMA) Insights

1. EMA 5: The 5-day EMA stands at 30360.47, indicating a Buy signal.
2. EMA 20: The 20-day EMA is at 30514.95, signalling a Sell sentiment.
3. EMA 50: The 50-day EMA currently sits at 30430.45, suggesting a Sell indication.

Simple Moving Average (SMA) Analysis

1. SMA 5: The 5-day SMA shows a value of 30319.57, reinforcing the Buy recommendation.
2. SMA 20: With a value of 30639.49, the 20-day SMA also supports a Sell sentiment.
3. SMA 50: The 50-day SMA registers at 30595.08, affirming a Sell indication.

Relative Strength Index (RSI) Report

The RSI, calculated over a 14-day period, stands at 45.68, signifying a positive signal.

Stochastic Oscillator Findings

The %K value of the Stochastic Oscillator suggests a positive stance.

Resistance and Support Levels

• Resistance: The resistance level is observed at 30484.49.
• Support: The support level is identified at 30177.17.

Summary and Trade Suggestions

In summary, the technical analysis of Bitcoin points towards a weak buy sentiment. Considering the indicators, moving averages, and oscillators, it seems favourable for traders to enter a long position.

Trade Suggestion:

• Entry Point: 30651.39
• Take Profit: 30915.56
• Stop Loss: 30433.83

Conclusion

The market update shows that strong bank results have significantly impacted stock performance, especially in the Dow Jones. Meanwhile, inflation data from the UK and the Eurozone is closely watched for potential FX market catalysts. The Euro and the pound are under pressure due to declining inflation rates. Additionally, oil prices are influenced by inventory data. The global market picture exhibits mixed performances across different regions, with Asia, Europe, and the US experiencing varied movements in equities.