Welcome to the Weekly Market Update!
In this edition, we bring you the latest highlights and insights from the world of finance. We cover various topics, including market performance, economic events, upcoming opportunities, and technical analysis.
Top Stories of the Week
- U.S. Weighs Curbs on AI Chip Exports to China Over Security Concerns: The move comes in response to fears that these chips could be used for weaponization and hacking activities.
- Aston Martin Teams Up with Lucid for Luxury Electric Vehicles: The collaboration will involve integrating Lucid components into Aston Martin’s battery electric models, showcasing a fusion of craftsmanship and advanced technology.
- Gold Dips to 4-Month Low on Anticipation of Hawkish Fed Strategy: Jerome Powell reiterated the likelihood of additional rate hikes and kept open the possibility of increased borrowing costs at the upcoming policy meeting scheduled for the end of July.
- China Aims for Accelerated Economic Growth, Targets 5% in 2023: Following a rebound from a weak 3% growth in the previous year, China aims to propel its economy forward.
- Federal Reserve Stress Test Demonstrates Banks’ Resilience Amid Crisis: All 23 banks have proven their resilience, with sufficient safeguards to weather severe recessions while continuing to provide lending to households and businesses.
- Nasdaq Poised for Best H1 Performance Ever: The Nasdaq is expected to post a 36% increase in H1, which would make up for the 33% drop it experienced in H1 last year. This tech-heavy index has outperformed the S&P 500 (14% increase) and the Dow Jones (2% gain). While hopes of the Fed’s potential rate hike conclusion and the AI frenzy have contributed to the Nasdaq’s success, concerns arise over-inflated valuations for tech stocks like Apple, Nvidia, and Microsoft.
- Saudi Arabia Output Cuts to Begin in July; Impact on Oil Prices Anticipated: Saudi Arabia, the world’s leading oil exporter, is scheduled to reduce its output from around 10 million barrels per day in May to 9 million barrels per day starting in July through fresh production cuts. Analysts believe that despite the ongoing supply cuts, oil prices may struggle due to macroeconomic concerns, but the market could tighten in the second half of 2023.
Upcoming Events to Watch
- US Non-Farm Payrolls: Will the US labor market shine again? Keep an eye on non-farm payrolls as 200k jobs are expected while average earnings raise concerns over prolonged inflation.
- RBA Rate Decision: The RBA took a bold step after a pause. Will July hold unchanged rates as May’s inflation dip strikes a delicate balance?
- Eurozone Retail Sales: Amid rising rates and high inflation, watch Eurozone retail sales on July 6th for signs of recovery or further strain on spending.
- OPEC Meeting: On July 5th and 6th, the oil cartel convenes to discuss output. Anticipate restrictions and watch for market reactions to post-Vienna surprises.
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
The EUR/USD pair is steadily increasing and making higher lows and highs while remaining above the 50 SMA. There have been no significant developments since the previous week, with the pair staying below the 1.10 level. Although the price briefly dipped below 1.09, it quickly rebounded without any notable follow-through. It could be a bearish indication if the price closes below 1.08800 daily.
The GBP/USD is experiencing an uptrend with consistent highs and lows above the 50 SMA. However, after reaching its peak and facing resistance, the pair could not continue upward and has since fallen. It is predicted that the pair will continue to fluctuate. The current price has pulled back to a point of resistance, which has become a point of support.
The 1930 support level is now a resistance barrier, indicating potential further decline with 1900 as the next obstacle. A rise above 1930 would cancel out bearish sentiment. Gold is moving up from support and is expected to reach resistance before reversing. NFP data will impact the gold price trajectory this week.
The value of XUS500 is on the rise and has consistently been forming higher highs and higher lows while staying above the 50 SMA. This is due to the S&P 500 index experiencing a significant increase throughout the week with signs of continued strength. Following a bullish engulfing candlestick pattern, there was further upward movement that created a new fractal pattern with a higher low. To confirm the continuation of this uptrend, it is important for the RSI to reach overbought territory by surpassing a threshold of 65.
Thank you for reading! Wishing you successful trades ahead!
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