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Market Analysis: Stocks, Gold, Currencies, Crypto Highlights

US Dollar Fluctuations: Chinese GDP Falls Short of Projections, Sparks Worries over Economic Revival

💡 As the new week kicks off, the performance of the US Dollar hangs in the balance, while lackluster Chinese GDP figures compound concerns regarding the rebound of the economy.

❓  With the Federal Reserve currently in a communication blackout, what variables will impact the trajectory of the DXY Index?

📅 Get ready for a relatively quiet economic calendar this week!

👀 Keep an eye on key data like Building Permits and Retail Sales in the US, as well as UK inflation.

📈 The true game-changer will likely be the US earnings season. Positive earnings could bolster oil prices and reassure investors that a recession is not on the horizon.

🏆 Gold price stalls as market assesses US Dollar direction, slight increase in ‘big dollar’

Bitcoin holding steady above $30,000.

“Don’t Miss Out on these Top Earnings Releases This Week!”

Bank of America Corporation (BAC) – Market Cap: $236.4B
Novartis AG (NVS) – Market Cap: $208.4B
Morgan Stanley (MS) – Market Cap: $144.0B
Lockheed Martin Corporation (LMT) – Market Cap: $118.1B
Tesla, Inc. (TSLA) – Market Cap: $880.8B
ASML Holding N.V. (ASML) – Market Cap: $296.2B
Netflix, Inc. (NFLX) – Market Cap: $200.2B
International Business Machines Corporation (IBM) – Market Cap: $121.6B
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) – Market Cap: $547.5B
Johnson & Johnson (JNJ) – Market Cap: $412.7B
Abbott Laboratories (ABT) – Market Cap: $187.4B
American Express Company (AXP) – Market Cap: $129.5B

Don’t miss the biggest earnings releases this week! Check out these top companies and their market capitalization values.

From banking giants to pharmaceutical powerhouses and innovative tech companies, there’s something for everyone – and potential investment opportunities you won’t want to miss.

Key Forecasts: UK Inflation to Impact Pound, Australian Dollar Rises Amidst US Dollar Decline, Euro Eyes Fibonacci Resistance, US Stocks Look to Q2 Earnings, Gold Struggles to Breakout, Oil Prices Maintain Upward Momentum, Bearish Outlook for USD

Get ready to make smart decisions and stay ahead of the market!

USD/CNH Soars Following China’s Mixed Economic Data, Market Sentiment Rattled

The USD/CNH pair has experienced a surge after China’s varied economic data was released, shaking up market sentiment. While Q2 GDP figures showed a slight easing of 0.8% QoQ, Industrial Production demonstrated improvement. However, Retail Sales took a hit in June.

These diverse economic indicators have raised concerns about China’s relationships with other countries, impacting market sentiment and allowing the US Dollar to regain some momentum.

One pivotal factor driving the recovery of the offshore Chinese Yuan pair is the US Dollar’s corrective bounce amidst gloomy sentiment.

Moreover, the People’s Bank of China’s defense of the Medium-term Lending Facility rates has also contributed to the pair’s ascent.

China’s Q2 GDP came in marginally better than expected, with a YoY increase of 6.3%, surpassing analysts’ estimations of 7.3%.

Industrial Production growth also surpassed expectations, rising by 4.4% YoY in June. However, Retail Sales saw a significant downturn, plummeting to 3.1% from the previous month’s 12.7%.

Furthermore, fears of near-term inflation have prompted a recovery in the US Dollar Index, as highlighted by the International Monetary Fund.

Political apprehensions surrounding China, prompted by comments from New Zealand Prime Minister Chris Hipkins and US Treasury Secretary Janet Yellen, have further contributed to the USD/CNH pair’s rebound.

Adding to the mix, US climate envoy John Kerry has arrived in Beijing for discussions with his Chinese counterpart, with the upcoming COP28 summit being the focal point. This adds to the overall uncertainty surrounding the Sino-US relationship.

In the US, the initial reading of the University of Michigan’s Consumer Confidence Index indicated a slight increase for July.

However, the Consumer Price Index and Producer Price Index for June declined on a yearly basis, exerting downward pressure on the US Dollar.

Regarding market movements, the S&P500 Futures exhibit minor losses, while US Treasury bond yields remain steady due to Japan’s holiday.

Looking ahead, the US NY Empire State Manufacturing Index may have an impact on intraday fluctuations for the USD/CNH pair, but all attention will be on the upcoming US Retail Sales data and any significant Sino-US headlines.

From a technical perspective, the USD/CNH bulls are searching for validation to restore market confidence. The support-turned-resistance line from early June, around the 7.1800 level, will be a critical indicator to monitor for further upward movement.

EUR/USD Surges Towards 1.1250, Showing Strength Despite Market Caution

The EUR/USD pair is on the rise, reversing its previous pullback from multi-month highs. The US Dollar’s recovery is losing steam, allowing the EUR/USD to continue its upward trend.

There is a static resistance level at 1.1240, but once the pair surpasses it and finds support, the next targets are likely to be at 1.1270 and 1.1300.

On the downside, there is initial support at 1.1200, followed by 1.1170. If the pair closes below the latter, it could lead to a further decline towards 1.1100.

It’s important to note that the Relative Strength Index (RSI) on the four-hour chart remains in the overbought territory, suggesting that there may be difficulties in gaining bullish momentum.

Stay informed as the EUR/USD continues its upward movement and navigate potential trading opportunities.

What Does It Mean When A Currency Is Overbought

Gold Price Stalls as Market Waits For Direction of US Dollar

Soft inflation data prompts reassessment of Federal Reserve’s tightening strategy. Treasury yields retreat due to lower CPI and PPI. 10-year note now trading at 3.8%, down from 4.1% last week. 2-year bond drops below 4.8%, down from a 17-year high of 5.1%.

DXY index declines by 2.25% last week, while gold futures contract sees a modest 1.65% increase. Index hits its lowest point since April 2022.

Expect a 25 basis point rate hike at the upcoming Federal Open Market Committee meeting on July 26th.

Data releases next week could create market volatility as the Federal Reserve enters the blackout period before the meeting. Stay tuned for business sentiment surveys, retail sales, industrial production, housing market statistics, and jobs data.

Pay attention to US real yield, as it has shown a correlation with the 10-year part of the curve and could impact gold.

Bitcoin Stays Strong Above $30K

With bitcoin holding steady at $30,298, the world’s largest digital asset remains unaffected. Similarly, ether remains stable at $1,927. The recent surge in crypto prices was fueled by a court ruling in the Ripple-SEC case. However, market corrections are anticipated after the overheating.

Disclaimer:

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Author

  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.