US Markets Await Federal Reserve Statement Amidst Lackluster Day.

A Brief Break Before a Pivotal Week

Last Friday, the US markets took a breather as investors prepared for a week filled with significant events, most notably the latest statement from the Federal Reserve. The Dow, S&P, and Nasdaq all had a lacklustre day, with the Dow and S&P ending nearly flat and the Nasdaq falling 0.22%. While the dollar continued to rise slowly, US treasuries saw only a marginal increase, and currencies remained within their established ranges. However, oil prices surged again, with WTI and Brent each rising by 1.8%. Meanwhile, gold experienced a dip, closing at around $1,960 per ounce.

Central Banks to Drive Market Momentum

Investors are gearing up for updates from three major central banks this week, and though few expect any shocks regarding actual interest rate shifts, many anticipate volatility leading up to these events as the banks provide crucial forward guidance. At the forefront is the Federal Reserve, where the odds of a 25bps rate increase stand at 99.8%. The Bank of Japan is expected to maintain its ultra-low-rate environment, and the European Central Bank is also predicted to deliver a 25bps increase. Traders in the foreign exchange market are ready to capitalize on future interest rate differentials.

Asia Session: Key Levels and Potential Impact

Resistance Challenges Dollar Index (DXY)

The dollar index (DXY) currently faces a significant resistance level at 101.10, leading to a temporary dip below 101 during the Asia session due to selling pressures on the US dollar. Trading volume and activity have been relatively low during this period, but as European markets come online and overall volume increases, we might see a shift in dynamics.

Europe & US Session Expectations

Given the lackluster trading activity thus far, markets may receive a slight boost from the impending flash Composite PMI figures from Europe. Additionally, the US dollar might witness profit-taking after significant gains last week, potentially leading to a drop below 101 for the DXY.

Dollar Index (DXY): Flash Composite PMI Insights

Anticipating the Services Sector’s Rise

Today’s release of the flash Composite PMI for July is expected to reveal a rising services sector, while manufacturing has remained stagnant since October 2022. The services sector’s growth has positively impacted overall economic activity, though it may have peaked in May. The flash figure is likely to confirm this trend, indicating continued growth in the services sector, albeit at a slower pace.

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 will be considered, including labor market conditions, inflation pressures, inflation expectations, and international and financial developments.
• The next meeting is on 26 July 2023

Next 24 Hours Bias

Weak Bearish

Australian Dollar (AUD): Composite PMI Impact

The services Sector Faces a Contraction

The flash composite PMI survey indicates that the Australian services sector experienced its first contraction in four months, leading to a drop in the composite score to 48.3, a seven-month low. The index has been declining almost every month in 2023, putting manufacturing activity under pressure.

Central Bank Notes:

• The RBA increased the cash rate target by 25 basis points to 4.10%.
• Inflation in Australia has passed its peak but remains high at 7% and needs to return to the target range.
• Further tightening of monetary policy may be necessary.
• Next meeting on 1 August 2023

Next 24 Hours Bias

Weak Bullish

Euro (EUR): Flash Composite PMI Insights

Anticipating Slower Growth and Decreasing Manufacturing

The flash Composite PMI for July indicates that the Eurozone’s services sector is expected to grow at a slower pace, while manufacturing is likely to decrease. This follows the stagnation of the Eurozone economy in June, which resulted in a contraction in the Composite reading. The current data suggests a second consecutive month of decline at the Composite level.

Central Bank Notes:

• The ECB raised the three key interest rates by 25 basis points.
• Economic growth projections have been slightly lowered.
• The Governing Council will ensure interest rates are sufficiently restrictive to achieve the inflation target and keep them at those levels as long as needed.
• Rate decisions will be data-dependent, considering inflation outlook, economic data, underlying inflation dynamics, and monetary policy transmission strength.
• Next meeting on 27 July 2023

Next 24 Hours Bias

Weak Bullish

Global Markets Snapshot

Asian Stock Markets

• Nikkei up 1.23%
• Shanghai Composite down 0.11%
• Hang Seng down 2.32%
• ASX down 0.10%

European Equities

• DAX futures down 0.24%
• CAC 40 down 0.33%
• FTSE down 0.25%

US Stock Market

• Dow Jones up 0.01%
• S&P 500 up 0.03%
• Nasdaq 100 is down 0.22%

Commodities Update

• Gold at $1964.36 (+0.18%)
• Silver at $24.64 (+0.29%)
• Brent Oil at $80.30 (-0.74%)
• WTI Oil at $76.49 (-0.74%)

News & Data for Traders

• (NZD) Trade Balance (MoM) (Jun) Actual 9M, Forecast 235M, Previous 46M at 04:15
• (EUR) Manufacturing PMI (Jul) Forecast 43.5, Previous 43.4 at 13:30
• (GBP) Manufacturing PMI Forecast 46.1, Previous 46.5 at 14:00
• (CAD) Wholesale Sales (MoM) Previous 3.5% at 18:00
• (USD) Service PMI (Jul) Forecast 54.0, Previous 54.4 at 19:15

GBPUSD

Exponential Moving Average

EMA 5: A Strong Sell Signal

The 5-day Exponential Moving Average (EMA) stands at 1.2861, suggesting a strong Sell sentiment in the GBPUSD currency pair.

EMA 20: Reinforcing the Sell Indication

The 20-day EMA displays a value of 1.2922, reinforcing the Sell indication for GBPUSD.

EMA 50: Aligned with a Sell Recommendation

The 50-day EMA aligns with a Sell recommendation as it stands at 1.2881 in the GBPUSD forex pair.

Simple Moving Average

SMA 5: Indicating a Sell Sentiment

The 5-day Simple Moving Average (SMA) shows 1.2855, indicating a Sell sentiment for GBPUSD.

SMA 20: Supporting the Sell Stance

The 20-day SMA records 1.2979, supporting the Sell stance for the GBPUSD currency pair.

SMA 50: Signifying a Sell Indication

With a value of 1.2873, the 50-day SMA signifies a Sell indication in GBPUSD.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period displays a reading of 39.39, suggesting a Sell signal in the GBPUSD forex pair.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral condition for GBPUSD.

Resistance And Support Levels

Resistance: 1.2897

The resistance level for GBPUSD is identified at 1.2897, indicating a potential barrier for upward movement.

Support: 1.2839

The support level for GBPUSD is observed at 1.2839, acting as a potential level of price support.

Summary And Trade Suggestions

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

Trade Suggestion:

• Entry Point: 1.2806 • Take Profit: 1.2738 • Stop Loss: 1.2864

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EURUSD

Exponential Moving Average

EMA 5: Indicating a Sell Signal

The 5-day Exponential Moving Average (EMA) stands at 1.1117, indicating a Sell signal in the EURUSD currency pair.

EMA 20: Signalling a Sell Sentiment

The 20-day EMA is at 1.1147, signalling a Sell sentiment for EURUSD.

EMA 50: Suggesting a Sell Indication

The 50-day EMA currently sits at 1.1088, suggesting a Sell indication in EURUSD.

Simple Moving Average

SMA 5: Reinforcing the Sell Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 1.1118, reinforcing the Sell recommendation for EURUSD.

SMA 20: Supporting the Sell Sentiment

With a value of 1.1192, the 20-day SMA also supports a Sell sentiment in the EURUSD forex pair.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 1.1052, affirming a Buy indication in EURUSD.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 38.85, signifying a Negative signal in the EURUSD forex pair.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance for EURUSD.

Resistance And Support Levels

Resistance: 1.1131

The resistance level is observed at 1.1131 for EURUSD, which may potentially hinder upward movement.

Support: 1.1081

The support level is identified at 1.1081 for EURUSD, acting as a potential level of price support.

Summary And Trade Suggestions

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

Trade Suggestion:

• Entry Point: 1.1050 • Take Profit: 1.0966 • Stop Loss: 1.1118

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AUDUSD

Exponential Moving Average

EMA 5: Indicating a Sell Signal

The 5-day Exponential Moving Average (EMA) stands at 0.6744, indicating a Sell signal in the AUDUSD currency pair.

EMA 20: Signalling a Sell Sentiment

The 20-day EMA is at 0.6769, signalling a Sell sentiment for AUDUSD.

EMA 50: Suggesting a Sell Indication

The 50-day EMA currently sits at 0.6749, suggesting a Sell indication in AUDUSD.

Simple Moving Average

SMA 5: Reinforcing the Sell Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 0.6741, reinforcing the Sell recommendation for AUDUSD.

SMA 20: Supporting the Sell Sentiment

With a value of 0.6795, the 20-day SMA also supports a Sell sentiment in the AUDUSD forex pair.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 0.6733, affirming a Buy indication in AUDUSD.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 43.46, signifying a Neutral signal in the AUDUSD forex pair.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance for AUDUSD.

Resistance And Support Levels

Resistance: 0.6747

The resistance level is observed at 0.6747 for AUDUSD, which may potentially hinder upward movement.

Support: 0.6718

The support level is identified at 0.6718 for AUDUSD, acting as a potential level of price support.

Summary And Trade Suggestions

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

Trade Suggestion:

• Entry Point: 0.6695 • Take Profit: 0.6649 • Stop Loss: 0.6735

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USDJPY

Exponential Moving Average

EMA 5: Indicating a Buy Signal

The 5-day Exponential Moving Average (EMA) stands at 141.15, indicating a Buy signal in the USDJPY currency pair.

EMA 20: Signalling a Buy Sentiment

The 20-day EMA is at 140.23, signalling a Buy sentiment for USDJPY.

EMA 50: Suggesting a Buy Indication

The 50-day EMA currently sits at 140.70, suggesting a Buy indication in USDJPY.

Simple Moving Average

SMA 5: Reinforcing the Buy Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 141.21, reinforcing the Buy recommendation for USDJPY.

SMA 20: Supporting the Buy Sentiment

With a value of 139.53, the 20-day SMA also supports a Buy sentiment in the USDJPY forex pair.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 141.32, affirming a Buy indication in USDJPY.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 62.16, signifying a Buy signal in the USDJPY forex pair.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance for USDJPY.

Resistance And Support Levels

Resistance: 141.77

The resistance level is observed at 141.77 for USDJPY, which may potentially hinder upward movement.

Support: 141.14

The support level is identified at 141.14 for USDJPY, acting as a potential level of price support.

Summary And Trade Suggestions

In summary, the technical analysis of USDJPY 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: 142.06 • Take Profit: 142.98 • Stop Loss: 141.37

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S&P 500

Exponential Moving Average

EMA 5: Indicating a Buy Signal

The 5-day Exponential Moving Average (EMA) stands at 4570.67, indicating a Buy signal in the S&P 500 index.

EMA 20: Signalling a Buy Sentiment

The 20-day EMA is at 4557.54, signalling a Buy sentiment for S&P 500.

EMA 50: Suggesting a Buy Indication

The 50-day EMA currently sits at 4512.54, suggesting a Buy indication in the S&P 500 index.

Simple Moving Average

SMA 5: Reinforcing the Buy Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 4570.94, reinforcing the Buy recommendation for S&P 500.

SMA 20: Supporting the Buy Sentiment

With a value of 4564.27, the 20-day SMA also supports a Buy sentiment in the S&P 500 index.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 4509.30, affirming a Buy indication in the S&P 500 index.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 60.01, signifying a Positive signal in the S&P 500 index.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Negative stance for S&P 500.

Resistance And Support Levels

Resistance: 4580.32

The resistance level is observed at 4580.32 for the S&P 500 index, which may potentially hinder further upward movement.

Support: 4559.85

The support level is identified at 4559.85 for the S&P 500 index, acting as a potential level of price support.

Summary And Trade Suggestions

In summary, the technical analysis of the S&P 500 index 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: 4587.15 • Take Profit: 4608.86 • Stop Loss: 4569.77

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WTI CRUDE OIL

Exponential Moving Average

EMA 5: Indicating a Buy Signal

The 5-day Exponential Moving Average (EMA) stands at 76.54, indicating a Buy signal in the WTI CRUDE OIL market.

EMA 20: Signalling a Buy Sentiment

The 20-day EMA is at 75.61, signalling a Buy sentiment for WTI CRUDE OIL.

EMA 50: Suggesting a Buy Indication

The 50-day EMA currently sits at 74.18, suggesting a Buy indication in WTI CRUDE OIL.

Simple Moving Average

SMA 5: Reinforcing the Buy Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 76.61, reinforcing the Buy recommendation for WTI CRUDE OIL.

SMA 20: Supporting the Buy Sentiment

With a value of 75.36, the 20-day SMA also supports a Buy sentiment in WTI CRUDE OIL.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 73.91, affirming a Buy indication in WTI CRUDE OIL.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 64.95, signifying a Buy signal in the WTI CRUDE OIL market.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance for WTI CRUDE OIL.

Resistance And Support Levels

Resistance: 77.07

The resistance level is observed at 77.07 for WTI CRUDE OIL, which may potentially hinder further upward movement.

Support: 76.19

The support level is identified at 76.19 for WTI CRUDE OIL, acting as a potential level of price support.

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: 77.50 • Take Profit: 78.59 • Stop Loss: 76.69

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GOLD

Exponential Moving Average

EMA 5: Indicating a Sell Signal

The 5-day Exponential Moving Average (EMA) stands at 1963.03, indicating a Sell signal in the GOLD market.

EMA 20: Signalling a Sell Sentiment

The 20-day EMA is at 1962.29, signalling a Sell sentiment for GOLD.

EMA 50: Suggesting a Buy Indication

The 50-day EMA currently sits at 1950.69, suggesting a Buy indication in GOLD.

Simple Moving Average

SMA 5: Reinforcing the Sell Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 1962.91, reinforcing the Sell recommendation for GOLD.

SMA 20: Supporting the Sell Sentiment

With a value of 1965.31, the 20-day SMA also supports a Sell sentiment in GOLD.

SMA 50: Affirming a Buy Indication

The 50-day SMA registers at 1942.19, affirming a Buy indication in GOLD.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 50.88, signifying a Buy signal in the GOLD market.

Stochastic Oscillator

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

Resistance And Support Levels

Resistance: 1963.43

The resistance level is observed at 1963.43 for GOLD, which may potentially hinder further upward movement.

Support: 1956.30

The support level is identified at 1956.30 for GOLD, acting as a potential level of price support.

Summary And Trade Suggestions

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

Trade Suggestion:

• Entry Point: 1953.39 • Take Profit: 1944.69 • Stop Loss: 1960.51

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ETHEREUM

Exponential Moving Average

EMA 5: Indicating a Sell Signal

The 5-day Exponential Moving Average (EMA) stands at 1889.19, indicating a Sell signal in the ETHEREUM market.

EMA 20: Signalling a Sell Sentiment

The 20-day EMA is at 1903.18, signalling a Sell sentiment for ETHEREUM.

EMA 50: Suggesting a Sell Indication

The 50-day EMA currently sits at 1905.47, suggesting a Sell indication in ETHEREUM.

Simple Moving Average

SMA 5: Reinforcing the Sell Recommendation

The 5-day Simple Moving Average (SMA) shows a value of 1887.43, reinforcing the Sell recommendation for ETHEREUM.

SMA 20: Supporting the Sell Sentiment

With a value of 1906.45, the 20-day SMA also supports a Sell sentiment in ETHEREUM.

SMA 50: Affirming a Sell Indication

The 50-day SMA registers at 1907.96, affirming a Sell indication in ETHEREUM.

RSI (Relative Strength Index)

The Relative Strength Index (RSI) calculated over a 14-day period stands at 39.98, signifying a Sell signal in the ETHEREUM market.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance for ETHEREUM.

Resistance And Support Levels

Resistance: 1911.09

The resistance level is observed at 1911.09 for ETHEREUM, which may potentially hinder further upward movement.

Support: 1872.16

The support level is identified at 1872.16 for ETHEREUM, acting as a potential level of price support.

Summary And Trade Suggestions

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

Trade Suggestion:

• Entry Point: 1846.71 • Take Profit: 1798.80 • Stop Loss: 1881.15

Conclusion

The markets are preparing for an eventful week, driven by central bank updates and crucial economic data. Investors should pay close attention to the flash Composite PMI figures from different regions, as they can significantly impact various assets. As always, keep an eye on central bank decisions and statements, as they are likely to shape market sentiment and provide valuable guidance for traders and investors. Remember to stay informed and adapt your strategies accordingly in this dynamic market environment.