Market Update: Nasdaq Drops Over 1% as Stocks Decline Again.

Introduction

In today’s market update, we witnessed a decline in the Nasdaq, dropping over 1%. The major indices, including the S&P and Nasdaq, experienced losses of 0.45% and 1.16%, respectively. However, the Dow managed to fare reasonably well, closing only marginally flat. This decline in stocks reflects a decline in investor confidence, making it a challenging start to the week for the US markets. Let’s dive deeper into the details and factors influencing these market movements.

Trouble in Russia and its Impact on Markets

Over the weekend, trouble in Russia had a significant impact on some markets. This situation led to an increase in oil prices and caused the Ruble to reach a 15-year low against the dollar. As a result, investors reacted by selling off stocks, which contributed to the decline in the Nasdaq and other major indices. Uncertainty surrounding the geopolitical landscape often triggers market volatility, and this event was no exception.

Data and Central Bankers Awaited

As we look ahead to the rest of the week, investors are anticipating the release of important data and central bank announcements. These upcoming events will provide further insights into the market’s direction. In particular, currency pairs are expected to trade within narrow ranges until the release of significant data and statements from central bankers later in the week. Meanwhile, US government yields have shown a slight decrease, suggesting a cautious sentiment among investors.

A Volatile Trading Day Ahead

Yesterday’s trading day was relatively range-bound, with no notable events to capture traders’ interest. However, today is shaping up to be more volatile, as several important data releases and the European Central Bank (ECB) central bank meeting in Sintra take place. While the Asian session lacks significant releases, the European session marks the beginning of the Sintra Forum, where ECB President Lagarde is scheduled to speak. In the New York session, simultaneous releases of Canadian CPI numbers and US Durable Goods data are expected, followed by the US CB Consumer Confidence report later in the day. This data marks the first substantial market information of the week, providing traders with valuable insights to guide their decisions.

What Happened in the US Session?

During the US session, the CBI Realised Sales for GBP showed a decrease from -10 to -9 compared to the previous period. This suggests a drop in retail sales, which could potentially harm the GBP. Although the actual value was slightly higher than the expected -6, the negative number indicates a potential downturn in the economy and decreased consumer confidence.

What Does It Mean for the Asian Session?

If the BOJ Core CPI y/y data surpasses expectations, it could cause the USD/JPY to drop below 143.00. In such a scenario, a bearish take may result in the pair reaching an intraday low of approximately 143.35. On the other hand, if the pair starts a bullish recovery, it could reach 144.00 by retesting a gap barrier around 143.70.

The Canadian Dollar (CAD)

Key News Events Today

• CPI m/m
• Median CPI y/y
• Trimmed CPI y/y

What Can We Expect from CAD Today?

Several key economic indicators for the Canadian dollar (CAD) will be released today. These include the CPI m/m, Median CPI y/y, and Trimmed CPI y/y. The predicted CPI m/m suggests a modest slowdown in inflation, while the Median CPI y/y indicates consistent inflation rates. However, the Trimmed CPI y/y projection raises concerns about a possible decline in inflation. These data points will be crucial in assessing the CAD’s performance in the market.

Central Bank Notes

• The Bank of Canada has increased its target for the overnight rate to 4.75%.
• Canada’s economy exceeded expectations 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 about inflation staying above the 2% target.
• The next meeting is scheduled for July 12, 2023.

Next 24 Hours Bias

Mixed

The Pound (GBP)

Key News Events Today

No major news events.

What Can We Expect from GBP Today?

The upcoming BRC Shop Price Index will play a crucial role in determining the Pound’s performance today. If the index indicates higher year-over-year growth compared to its previous reading of 9.0%, the Bank of England may consider raising interest rates, strengthening the GBP. Conversely, a decline or stability in the index might alleviate inflation worries and result in a weaker Pound.

Central Bank Notes

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

Next 24 Hours Bias

Bearish

The Japanese Yen (JPY)

Key News Events Today

No major news events.

What Can We Expect from JPY Today?

The anticipated increase in the BOJ Core CPI y/y data, from the previous reading of 3.0% to 3.1%, is an important factor to consider for the Japanese Yen (JPY). A higher-than-expected inflation rate can strengthen the value of the yen, indicating a robust economy and attracting foreign investment. However, doubts about the central bank’s ability to manage prices may lead to speculations about a tightening of monetary policy, which could negatively impact the JPY.

Central Bank Notes

• The Bank of Japan will continue with QQE with Yield Curve Control to achieve the price stability target of 2%.
• The bank has implemented yield curve control measures, including a negative interest rate of -0.1% on policy-rate balances and the purchase of Japanese government bonds to maintain 10-year JGB yields of around 0%.
• Inflation is expected to temporarily decelerate but is projected to accelerate moderately later, supported by improvements in the output gap and inflation expectations.
• Japan’s economy is expected to gradually recover.
• The next meeting is scheduled for July 27, 2023.

Next 24 Hours Bias

Mixed

Global Markets

Asian Stock Markets

• Nikkei: -0.49%
• Shanghai Composite: +1.29%
• Hang Seng: +1.94%
• ASX: +0.56%

European Equities

• DAX futures: -0.11%
• CAC 40: +0.29%
• FTSE: -0.11%

US Stock Market

• Dow Jones: -0.38%
• S&P 500: -0.45%
• Nasdaq 100: -1.16%

Commodities

• Gold: $1925.44 (+0.17%)
• Silver: $22.99 (+1.04%)
• Brent Oil: $75.05 (+0.95%)
• WTI Oil: $70.11 (+1.07%)

News & Data

• (USD) Building Permits Forecast: 1.491M, Previous: 1.417M at 17:30
• (CAD) Core CPI (MoM) (May) Forecast: 0.5%, Previous: 0.5% at 18:00
• (CAD) Core CPI (YoY) (May) Forecast: 3.9%, Previous: 4.1% at 18:00
• (USD) New Home Sales (May) Forecast: 675K, Previous: 683K at 19:30
• (USD) CB Consumer Confidence (Jun) Forecast: 104.0, Previous: 102.3 at 19:30

In conclusion, today’s market outlook reflects a mixed bias across different currencies and global markets. Key economic indicators, such as the CPI data for the Canadian dollar (CAD) and the BOJ Core CPI y/y for the Japanese Yen (JPY), will play a significant role in shaping market sentiments. Traders and investors should closely monitor these releases and central bank actions to make informed decisions in the dynamic financial landscape.

GBPUSD: Uncertainty in Market Direction Raises Concerns

Introduction

The GBP/USD chart currently exhibits a neutral momentum, leaving traders uncertain about the market direction. The lack of a clear trend suggests potential oscillation between the first support level at 1.2705 and the first resistance level at 1.2737.

The Significance of Fibonacci Confluence

Support Levels: 1.2705 and 1.2660

• Notable Overlap Support: 1.2705
  • Fibonacci Confluence: 38.20% and 50% Fibonacci Retracements
  • Enhancing Support Zone Strength
• Pullback Support: 1.2660
  • Potential Strength from Fibonacci Retracement and Projection
  • Creating a Supportive Zone

Resistance Levels: 1.2737 and 1.2786

• Retreat Resistance: 1.2737
  • Potentially Limiting Price Growth
• Swing High Resistance: 1.2786
  • Reinforced by 145.00% Fibonacci Extension and 61.80% Fibonacci Projection

Trade Suggestion: Buying Opportunity

To take advantage of the market conditions, a trade suggestion is provided:

• Buy at 1.2738
• Take Profit at 1.2738
• Stop Loss at 1.2708

By considering these levels, traders can navigate the uncertain GBP/USD landscape and potentially capitalize on the market movements.

EURUSD: Bullish Momentum Points to Upside Potential

Introduction

The EUR/USD chart indicates a bullish momentum, suggesting the possibility of upward movement. Traders should be aware of key resistance and support levels.

Identifying Significant Levels

Resistance Levels: 1.0941 and 1.0969

• Swing High Resistance: 1.0941
  • Potential Target for Bullish Continuation
• Multi-Swing High Resistance: 1.0969
  • Emphasizing its Importance

Support Levels: 1.0918 and 1.0901

• Pullback Support: 1.0918
  • Potential Support Zone
• Overlap Support: 1.0901
  • Acting as an Additional Support

Trade Suggestion: Seize the Bullish Opportunity

To make the most of the bullish momentum, a trade suggestion is presented:

• Buy at 1.0941
• Take Profit at 1.0970
• Stop Loss at 1.0916

By considering these levels, traders can potentially capitalize on the anticipated upward movement of the EUR/USD pair.

AUDUSD: Bearish Momentum Presents Downward Trend

Introduction

The AUD/USD chart currently exhibits a bearish momentum, indicating a potential continuation of the downward trend. Traders should take note of essential support and resistance levels.

Identifying Key Levels

Support Levels: 0.6694 and 0.6666

• Pullback Support with Fibonacci Confluence: 0.6694
  • Notable Support Zone with 61.80% Fibonacci Retracement and 78.60% Fibonacci Projection
• Overlap Support: 0.6666
  • Highlighting its Significance in Creating Supportive Zone

Resistance Levels: 0.6716 and 0.6743

• Overlap Obstacle: 0.6716
  • Potentially Restricting Price Growth
• Multi-Swing High Resistance: 0.6743
  • Emphasizing its Importance in Preventing Upward Movement

Trade Suggestion: Seizing the Bearish Opportunity

To benefit from the bearish momentum, a trade suggestion is proposed:

• Sell at 0.6694
• Take Profit at 0.6666
• Stop Loss at 0.6716

By considering these levels, traders can potentially profit from the expected downward trend in the AUD/USD market.

USDJPY: Positive Ascending Channel Signals Upward Movement

Introduction

The USD/JPY chart showcases a positive ascending channel, suggesting a bullish momentum and the possibility of further upward movement. Traders should be aware of critical support and resistance levels.

Identifying Key Levels

Resistance Levels: 145.01 and 143.85

• Pullback Barrier: 145.01
  • Potential Target for Bullish Extension
• Swing High Resistance: 143.85
  • Further Reinforced Importance

Support Levels: 142.27 and 141.28

• Retreat Support: 142.27
  • Considerable Strength in Support Zone
• Overlap Support: 141.28
  • Highlighting its Importance

Trade Suggestion: Capitalize on the Bullish Momentum

To take advantage of the bullish momentum, a trade suggestion is presented:

• Buy at 143.65
• Take Profit at 143.86
• Stop Loss at 143.50

By considering these levels, traders can potentially benefit from the anticipated upward movement of the USD/JPY pair.

DOW JONES: Market Lacks Direction, Caution Advised

Introduction

The DJ30 (Dow Jones 30) chart currently exhibits neutral momentum, indicating a lack of discernible direction in the market. Traders should be cautious and consider important support and resistance levels.

Identifying Critical Levels

Support Levels: 33658.08 and 33278.31

• Overlap Support: 33658.08
  • Strengthened by 50% and 78.60% Fibonacci Retracements
• Overlap Support: 33278.31
  • Corresponds with 61.80% Fibonacci Retracement and 145.00% Fibonacci Extension

Resistance Levels: 34037.85 and 34516.19

• Overlap Barrier: 34037.85
  • Supported by 23.60% Fibonacci Retracement
• Overlap Resistance: 34516.19
  • Further Reinforced by 61.80% Fibonacci Retracement

Trade Suggestion: Navigate the Neutral Market

Given the neutral momentum, a trade suggestion is provided:

• Sell at 33712.21
• Take Profit at 33611.90
• Stop Loss at 33811.41

By considering these levels, traders can cautiously navigate the neutral market of the DJ30.

WTI CRUDE OIL: Uncertain Market Direction Prevails

Introduction

The WTI (West Texas Intermediate) chart currently displays neutral momentum, leaving the market direction uncertain. Traders should be aware of essential support and resistance levels.

Identifying Key Levels

Support Levels: 67.22 and 65.00

• Multi-Swing Low Support: 67.22
  • Notable Support Level with 50% Fibonacci Retracement
• Multiple Swing Low Support: 65.00
  • Enhanced Significance with 100% Fibonacci Projection and 127.20% Fibonacci Extension

Resistance Levels: 70.22 and 72.54

• Overlap Resistance: 70.22
  • Potential Barrier to Price Growth
• Multi-Swing High Resistance: 72.54
  • Impeding Upward Movement

Trade Suggestion: Seizing Opportunities in Uncertainty

To capitalize on potential market moves, a trade suggestion is presented:

• Sell at 69.59
• Take Profit at 69.08
• Stop Loss at 70.01

By considering these levels, traders can potentially benefit from the uncertain market direction of WTI Crude Oil.

SILVER: Bullish Trend Indicates Upward Advance

Introduction

The silver chart displays a bullish trend, suggesting the possibility of an upward advance. Traders should pay attention to critical support and resistance levels.

Identifying Critical Levels

Support Levels: 22.52 and 21.98

• Overlap Support: 22.52
  • Enhanced Significance with 61.80% Fibonacci Retracement and 61.80% Fibonacci Projection
• Retreat Support: 21.98
  • Bolstering the Support Zone

Resistance Levels: 22.97 and 24.07

• Overlap Resistance: 22.97
  • Potential Impediment to Further Price Growth
• Overlap Resistance: 24.07
  • Heightened Relevance as an Obstacle

Trade Suggestion: Capitalize on the Bullish Trend

To seize opportunities presented by the bullish trend, a trade suggestion is proposed:

• Buy at 22.95
• Take Profit at 23.21
• Stop Loss at 22.76

By considering these levels, traders can potentially benefit from the anticipated upward advance in the silver market.

BITCOIN: Market Direction Remains Unclear

Introduction

The BTC/USD (Bitcoin) chart currently exhibits neutral momentum, indicating an unclear market direction. Traders should pay attention to critical support and resistance levels.

Identifying Key Levels

Support Levels: 29810.55 and 28485.03

• Overlap Support: 29810.55
  • Further Supported by 23.60% Fibonacci Retracement
• Overlap Support: 28485.03
  • Location of 50% Fibonacci Retracement

Resistance Level: 30970.38

• Pullback Resistance: 30970.38
  • Potential Barrier to Higher Momentum

Trade Suggestion: Seizing Opportunities Amidst Uncertainty

To capitalize on potential market moves, a trade suggestion is presented:

• Buy at 30418
• Take Profit at 30546
• Stop Loss at 30312

By considering these levels, traders can potentially benefit from the uncertain market direction of Bitcoin.

Conclusion

In conclusion, the analysis of various currency pairs and market indices provides valuable insights for traders. By considering the support and resistance levels, as well as the trade suggestions, traders can make informed decisions to navigate the market and potentially maximize their profits. However, it’s important to note that market conditions can change rapidly, and traders should always conduct their own research and exercise caution when making trading decisions.