Dow Leads Wall Street Higher as Investors Shift Focus Beyond Tech.

In a jam-packed week filled with earnings releases and a Federal Reserve meeting, the Dow Jones Industrial Average (.DJI) spearheaded a rally on Wall Street, marking its longest winning streak in six years.

Tech Giants’ Earnings Under the Spotlight

Investors eagerly await earnings reports from major tech companies such as Alphabet (GOOGL.O), Microsoft (MSFT.O), and Meta Platforms (META.O) to assess whether their stock values align with the exorbitant prices at which they have been valued.

Mega Cap Growth Businesses Soar

Rate-sensitive mega-cap growth businesses witnessed a surge in hopes of artificial intelligence advancements and the potential conclusion of the Federal Reserve’s tightening cycle. This momentum propelled the tech-heavy Nasdaq Composite Index (.IXIC) to outperform its peers with a remarkable 34.3% gain year-to-date.

Dow Jones Industrial Average Extends Winning Streak

The Dow Jones Industrial Average continued its winning streak for the 11th consecutive day, posting a 0.52% increase and achieving its longest winning streak since February 2017. Meanwhile, the Nasdaq Composite gained 0.19%, and the S&P 500 saw a solid increase of 0.40%. Following the release of discouraging economic data last week, many economies are seeking policy support to bolster growth, leading to a recent uptick in optimism.

Asia Session Recap: Dollar Index Slips on BoJ’s Core CPI Data

During the early Asian trading session, the dollar index (DXY) briefly reached 101.42 but declined to as low as 101.20 afterward. The Bank of Japan (BoJ) published its core CPI data, indicating a YoY (year-over-year) reading of 3.0%, aligning with estimates and slightly lower than the previous month’s 3.1%. As a result, the BoJ is expected to maintain its ultra-dovish monetary policy stance as long as general inflation remains subdued in Japan.

Europe & US Session Preview: German Business Climate Index in Focus

The ifo Business Climate Index in Germany has been on a downward trend in recent months, with the latest projection pointing to a rating of 88.0, down from the previous month’s 88.5. This decline may affect the Euro’s performance, but for now, the US dollar’s weakness is providing support to the EURUSD pair.

The Japanese Yen (JPY): Core CPI Reveals Softening Inflation

Key news events today revolve around the core CPI reading from the Bank of Japan, which revealed a softening of core inflation to 3.0% YoY. As long as general inflation remains low in Japan, the Bank of Japan is likely to maintain its ultra-dovish monetary policy stance.

Central Bank Notes:

• The Bank of Japan will continue with Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control to achieve its 2% price stability target.
• Yield curve control includes a negative interest rate of -0.1% on policy-rate balances and the purchase of Japanese government bonds to keep 10-year JGB yields around 0%.
• Inflation is expected to decelerate temporarily but is projected to accelerate moderately later, supported by improvements in the output gap and inflation expectations.
• Japan’s economy is expected to recover gradually.
• The next Bank of Japan meeting is scheduled for 28 July 2023.

Next 24 Hours Bias: Weak Bearish

The Canadian Dollar (CAD): USDCAD Under Downward Pressure

Today’s key news events do not include any major announcements. However, after experiencing strong demand yesterday, the US dollar is currently weakening, putting downward pressure on the USDCAD currency pair, which is approaching 1.3150.

Central Bank Notes:

• The Bank of Canada has increased its target for the overnight rate to 4.75%.
• Canada’s economy performed better than expected in the first quarter of 2023, with GDP growth of 3.1%.
• The Bank expects CPI inflation to ease to around 3% in the summer, but concerns have risen regarding inflation remaining above the 2% target.
• The next Bank of Canada meeting is scheduled for 6 September 2023.

Next 24 Hours Bias: Medium Bearish

Oil: Crude Prices Rise on Speculation of Chinese Stimulus Measures

Today’s key news event is the API Weekly Crude Oil Stock report. Crude prices saw an increase overnight, driven by speculation about additional stimulus measures in China. As a result, WTI oil surpassed the $78 per barrel mark, and if API inventory levels decline more than anticipated, further increases in crude prices may occur.

Next 24 Hours Bias: Medium Bullish

Global Markets: Asian Stocks Mixed, European Equities Show Varied Performance

Asian stock markets experienced mixed results, with the Nikkei down 0.13%, the Shanghai Composite up 2.05%, the Hang Seng up 4.09%, and the ASX up 0.46%.

European equities displayed varied performance, with the DAX futures down 0.30%, the CAC 40 down 0.25%, and the FTSE up 0.02%.

In the US stock market, the Dow Jones increased by 0.52%, the S&P 500 rose by 0.40%, and the Nasdaq 100 gained 0.19%.

Commodity Prices Show Modest Movements

Commodity prices showed modest changes, with gold at $1963.95 (+0.09%), silver at $24.73 (+0.62%), Brent Oil at $82.67 (+0.23%), and WTI Oil at $79.02 (+0.34%).

News & Data for the Day

• (EUR) German Ifo Business Climate Index (Jul) Forecast 88.0, Previous 88.5 at 13:30
• (EUR) German Business Expectations (Jul) Forecast 83.4, Previous 83.6 at 13:30
• (CAD) Manufacturing Sales (MoM) Previous 1.2% at 18:00
• (USD) CB Consumer Confidence (Jul) Forecast 111.8, Previous 109.7 at 19:30

GBPUSD: A Look at Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 1.2841, suggesting a Buy sentiment.
• EMA 20: The 20-day EMA displays 1.2897, reinforcing a Sell indication.
• EMA 50: With a value of 1.2875, the 50-day EMA aligns with a Sell recommendation.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows 1.2838, indicating a Buy sentiment.
• SMA 20: The 20-day SMA records 1.2936, supporting a Sell stance.
• SMA 50: The 50-day SMA stands at 1.2883, signifying a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, displays a reading of 39.93, suggesting a Sell signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is identified at 1.2871.
• Support: The support level is observed at 1.2824.

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: 1.2792
• Take Profit: 1.2735
• Stop Loss: 1.2837

EURUSD: Analyzing Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 1.1088, indicating a Sell signal.
• EMA 20: The 20-day EMA is at 1.1126, signalling a Sell sentiment.
• EMA 50: The 50-day EMA currently sits at 1.1079, suggesting a Sell indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 1.1087, reinforcing the Sell recommendation.
• SMA 20: With a value of 1.1168, the 20-day SMA also supports a Sell sentiment.
• SMA 50: The 50-day SMA registers at 1.1062, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 36.41, signifying a negative signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 1.1102.
• Support: The support level is identified at 1.1048.

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: 1.1025
• Take Profit: 1.0962
• Stop Loss: 1.1082

AUDUSD: Technical Analysis and Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 0.6755, indicating a Buy signal.
• EMA 20: The 20-day EMA is at 0.6765, signalling a Buy sentiment.
• EMA 50: The 50-day EMA currently sits at 0.6749, suggesting a Buy indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 0.6746, reinforcing the Buy recommendation.
• SMA 20: With a value of 0.6779, the 20-day SMA also supports a Sell sentiment.
• SMA 50: The 50-day SMA registers at 0.6737, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 51.66, signifying a Bullish signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 0.6786.
• Support: The support level is identified at 0.6751.

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: 0.6801
• Take Profit: 0.6846
• Stop Loss: 0.6770

USDJPY: Analyzing Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 141.23, indicating a Sell signal.
• EMA 20: The 20-day EMA is at 140.49, signalling a Buy sentiment.
• EMA 50: The 50-day EMA currently sits at 140.76, suggesting a Buy indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 141.31, reinforcing the Sell recommendation.
• SMA 20: With a value of 139.35, the 20-day SMA also supports a Buy sentiment.
• SMA 50: The 50-day SMA registers at 141.13, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 58.36, signifying a Buy signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 141.59.
• Support: The support level is identified at 140.81.

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: 141.92
• Take Profit: 142.98
• Stop Loss: 141.18

FTSE 100: A Look at Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 7672.27, indicating a Buy signal.
• EMA 20: The 20-day EMA is at 7587.03, signalling a Buy sentiment.
• EMA 50: The 50-day EMA currently sits at 7517.81, suggesting a Buy indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 7668.76, reinforcing the Buy recommendation.
• SMA 20: With a value of 7565.71, the 20-day SMA also supports a Buy sentiment.
• SMA 50: The 50-day SMA registers at 7460.77, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 76.00, signifying a positive signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 7700.7.
• Support: The support level is identified at 7651.2.

Summary And Trade Suggestions

In summary, the technical analysis of the FTSE 100 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: 7731.3
• Take Profit: 7808.3
• Stop Loss: 7676.3

Brent Crude Oil: Analyzing Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 81.89, indicating a Buy signal.
• EMA 20: The 20-day EMA is at 80.47, signalling a Buy sentiment.
• EMA 50: The 50-day EMA currently sits at 78.93, suggesting a Buy indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 81.92, reinforcing the Buy recommendation.
• SMA 20: With a value of 80.03, the 20-day SMA also supports a Buy sentiment.
• SMA 50: The 50-day SMA registers at 78.64, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 67.1, signifying a Buy signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 82.70.
• Support: The support level is identified at 81.57.

Summary And Trade Suggestions

In summary, the technical analysis of Brent 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: 83.38
• Take Profit: 85.42
• Stop Loss: 81.95

Silver: A Look at Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 24.53, indicating a Buy signal.
• EMA 20: The 20-day EMA is at 24.59, signalling a Buy sentiment.
• EMA 50: The 50-day EMA currently sits at 24.16, suggesting a Buy indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 24.50, reinforcing the Buy recommendation.
• SMA 20: With a value of 24.80, the 20-day SMA also supports a Sell sentiment.
• SMA 50: The 50-day SMA registers at 23.93, affirming a Buy indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 54.6, signifying a Buy signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 24.76.
• Support: The support level is identified at 24.36.

Summary And Trade Suggestions

In summary, the technical analysis of silver 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: 24.90
• Take Profit: 25.34
• Stop Loss: 24.64

BTC: Analyzing Moving Averages

Exponential Moving Average (EMA)

• EMA 5: The 5-day EMA stands at 29728.19, indicating a Sell signal.
• EMA 20: The 20-day EMA is at 30041.51, signalling a Sell sentiment.
• EMA 50: The 50-day EMA currently sits at 30214.57, suggesting a Sell indication.

Simple Moving Average (SMA)

• SMA 5: The 5-day SMA shows a value of 29725.41, reinforcing the Sell recommendation.
• SMA 20: With a value of 30084.42, the 20-day SMA also supports a Sell sentiment.
• SMA 50: The 50-day SMA registers at 30403.51, affirming a Sell indication.

RSI (Relative Strength Index)

The RSI, calculated over a 14-day period, stands at 36.7, signifying a Sell signal.

Stochastic Oscillator

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

Resistance And Support Levels

• Resistance: The resistance level is observed at 29843.37.
• Support: The support level is identified at 29422.61.

Summary And Trade Suggestions

In summary, the technical analysis of Bitcoin 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: 29133.34
• Take Profit: 28423.30
• Stop Loss: 29659.29

Conclusion

Investors remain focused on earnings releases from major tech giants, and rate-sensitive mega-cap growth businesses continue to soar on optimism for advancements in artificial intelligence and the Federal Reserve’s monetary policy. The dollar index experiences fluctuations amid key economic data releases from Japan and Germany. As global markets show mixed performance, crude prices rise on speculation of Chinese stimulus measures. The day ahead holds key economic indicators that could further impact currencies and commodities. Investors are closely monitoring these developments as they make strategic decisions in the financial markets.