Market Analysis: EUR/USD Struggles To Recover While USD/CHF Rallies
EUR/USD is attempting a recovery wave from the 1.0675 zone. USD/CHF climbed higher above 0.8900 and might extend gains in the near term.
Important Takeaways for EUR/USD and USD/CHF Analysis Today
- The Euro declined toward 1.0675 before it started a recovery wave against the US Dollar.
- There is a key bullish trend line forming with support at 1.0710 on the hourly chart of EUR/USD at FXOpen.
- USD/CHF climbed higher above the 0.8900 and 0.8935 resistance levels.
- There is a connecting bullish trend line forming with support at 0.8930 on the hourly chart at FXOpen.
EUR/USD Technical Analysis
On the hourly chart of EUR/USD at FXOpen, the pair extended the decline below the 1.0720 support zone. The Euro even declined below 1.0700 before the bulls appeared against the US Dollar, as mentioned in the previous analysis.
The pair tested the 1.0675 zone and recently started a recovery wave. There was a move above the 1.0710 resistance zone, but the bears were active near 1.0745. As a result, there was another pullback to 1.0690 and the pair is now consolidating below the 50-hour simple moving average.
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The Nikkei Index Has Risen to a 2-Month High
As we wrote on June 17th, analyzing the Nikkei 225 chart (Japan 225 on FXOpen):
→ the price formed a consolidation pattern (in the shape of a narrowing triangle);
→ the price formed a bullish reversal from the 38,000 points level (indicated by an arrow), suggesting potential growth and trend establishment upon pattern breakout.
Since then, the price has broken out of the consolidation triangle and today exceeded the 39,800 level - marking the highest point since mid-April.
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AMZN Shares Set a New All-Time High
As shown in the AMZN chart, yesterday the share price confidently surpassed the psychological level of $190, closing above $193.41, which is a new all-time high.
Specifically:
→ the growth was approximately +3.9% for the day, with the closing candle at the upper part (a sign of strong demand);
→ Amazon’s market capitalisation exceeded $2 trillion.
According to Benzinga, the rise in AMZN’s price was driven by:
→ the news that BofA Securities analyst Justin Post maintained a “Buy” recommendation and raised the target price from $210 to $220, citing the potential for improved efficiency through better logistics.
→ the information that Amazon is preparing to launch a discount section similar to Temu, which will offer direct delivery from China.
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European Currencies Face a Crucial Test: What to Expect
The end of June and the beginning of July are packed with significant economic and political events for the pound and the euro. A few weeks ago, Emmanuel Macron dissolved the parliament and announced snap parliamentary elections. He took this step after the far-right National Rally led by Marine Le Pen secured first place in the European Parliament elections. Many experts believe that if the far-right gains a majority in the parliament, it could lead to a serious political crisis in the EU, consequently exerting bearish pressure on EUR/USD.
EUR/USD
According to the technical analysis of the EUR/USD pair, if the price falls below 1.0660, the pair may continue its downward trend towards 1.0600-1.0400. A resumption of the upward trend is possible with a confident consolidation above 1.0740-1.0700. In the upcoming trading sessions, the following events should be noted:
- Today at 12:00 (GMT +3:00) expected consumer inflation in the Eurozone;
- Today at 13:00 (GMT +3:00) special EU summit of heads of state;
- Today at 15:30 (GMT +3:00) US GDP.
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USD/JPY Rate Hits Highest Level Since 1986
As shown in the USD/JPY chart, today the rate is around 160.58 yen per US dollar.
Bloomberg reports the words of Japan’s Finance Minister Shunichi Suzuki:
→ It is desirable for the exchange rate to move in a stable manner.
→ Sudden, one-sided moves are not desirable.
→ We will analyze the background to this move with a high sense of urgency, and take necessary action as needed.
Such rhetoric from officials seems not to have deterred the bulls, who are keeping the rate above the April high (when the Bank of Japan intervened in the market to support the weakened yen, resulting in a 4.75% decline over 5 days).
In our analysis from 24 June, we noted that:
→ the price is moving within a large upward channel (shown in blue),
→ and the local rise (framed by orange lines) could push the price to the boundaries of the blue channel.
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Market Analysis: GBP/USD Turns Red While USD/CAD Rallies
GBP/USD declined below the 1.2670 support zone. USD/CAD is rising and might aim for more gains above the 1.3735 resistance.
Important Takeaways for GBP/USD and USD/CAD Analysis Today
- The British Pound started a fresh decline from the 1.2700 resistance zone.
- There is a key bearish trend line forming with resistance at 1.2640 on the hourly chart of GBP/USD at FXOpen.
- USD/CAD is showing positive signs above the 1.3675 support zone.
- There is a major bullish trend line forming with support at 1.3705 on the hourly chart at FXOpen.
GBP/USD Technical Analysis
On the hourly chart of GBP/USD at FXOpen, the pair started a fresh decline from the 1.2700 zone. The British Pound traded below the 1.2670 support to move into further a bearish zone against the US Dollar.
The pair even traded below 1.2640 and the 50-hour simple moving average. Finally, the bulls appeared near the 1.2625 level. A low was formed at 1.2621 and the pair is now consolidating losses below the 23.6% Fib retracement level of the downward move from the 1.2670 swing high to the 1.2621 low.
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Strong US Dollar Dominates Forex: For How Long?
According to ICE data, the price of the US Dollar Index futures contract has reached its highest level since May 2 of this year.
This strength is reflected in the exchange rates of major currencies against the US dollar:
→ The USD/JPY rate has reached a record high since 1986, which we reported yesterday. Today, 1 USD was worth more than 161 yen.
→ The NZD/USD rate has dropped to its lowest level since May 15.
→ The USD/CHF rate has risen to its highest level since June 3.
Regarding the euro, the strength of the US dollar has pushed the EUR/USD rate down to significant support.
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- Nasdaq 100 Index Failed to Hold above 20,000 Points
- European Currencies Face a Crucial Test: What to Expect
- USD/JPY Rate Hits Highest Level since 1986
- AMZN Shares Set a New All-Time High
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S&P 500 Analysis: Concerning Market Behaviour
On Friday, data was released showing that inflation in the US slowed down in May. According to ForexFactory, the actual monthly Core PCE Price Index was 0.1%, which matched the forecasts (last month’s PCE was 0.3%).
Reuters reports that:
→ Prices for recreational goods, as well as for vehicles, furniture, and durable household appliances, dropped significantly.
→ This news reinforced expectations that the Federal Reserve might begin to cut interest rates later this year. According to the CME FedWatch tool, market prices now indicate a 63% probability of a Fed rate cut in September, compared to a 55% probability a month ago.
Monetary policy easing should be perceived as bullish news for the market, however… While the S&P 500 index (US SPX 500 mini on FXOpen) initially rose in the hours following the publication, it dropped to the week’s lows by the end of trading. This bearish market behaviour amidst positive news of slowing inflation is concerning.
Today, the price of the S&P 500 (US SPX 500 mini on FXOpen) shows that bulls are trying to recover from Friday’s decline. They might be aiming to resume the upward trend that has been in place in 2024.
How successful could this be?
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EUR/USD Rate Rises After First Round of Voting in France
According to Reuters, exit polls show that Marine Le Pen’s far-right party, the National Rally (RN), won the first round of parliamentary elections in France on Sunday.
The financial market reacted to this with a rise in the euro’s exchange rate against other currencies.
Specifically, the EUR/USD rate jumped to its highest level since June 13.
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Silver Price Analysis: Awaiting Powell’s Comments
Today, at 16:30 GMT+3, the Federal Reserve Chairman is scheduled to speak. Market participants are looking for more clarity on the Fed’s plans regarding interest rate cuts following the release of inflation data last Friday.
According to Trading Economics, Fed officials have repeatedly called for caution before cutting rates, and Federal Reserve Board member Michelle Bowman stated that she is open to further rate hikes if progress in combating inflation stalls or reverses.
Powell’s speech will significantly impact many financial markets, including the precious metals market, as lowering interest rates could increase the appeal of gold and silver as “safe haven” assets compared to bonds.
It is important to note that besides the Fed’s monetary policy, the XAG/USD price is significantly influenced by news about the Chinese economy – the largest consumer of silver. The demand outlook remains uncertain, considering that official data for June indicated a second consecutive month of production decline.
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TSLA Stock Price Hits Over 5-Month High
As today’s TSLA chart shows, the stock price rose by approximately 6% during yesterday’s trading, surpassing the $209 per share level. This marks the highest point since 24 January this year.
The price increase was driven by optimism related to the release of second-quarter car sales data. It is expected that Tesla might report a decline in sales, but not as significant as it could have been.
Analysts surveyed by Bloomberg estimate that the automaker will report sales of around 440,000 electric vehicles in the second quarter, which is 5.8% less than a year ago.
Factors contributing to the decline in sales include:
→ The suspected arson at the Tesla factory in Berlin;
→ Changes in the supply chain due to attacks in the Red Sea;
→ A reduction of approximately 10% in the company’s workforce, announced by Musk in April.
However, the main factor could be competition and Tesla’s aging model lineup. Can the TSLA price maintain its current high?
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Pound and Euro Test Key Support Levels: Is a Breakout Possible?
European currencies are showing surprising resilience. Despite the general strengthening of the dollar and strong macroeconomic data from the US, EUR/USD and GBP/USD continue to trade above strategically important levels:
- EUR/USD has been testing 1.0660 for over three weeks but cannot establish itself below this level.
- GBP/USD buyers have been holding off sellers for a second week at the 1.2610-1.2600 level.
EUR/USD
The recent parliamentary elections in France, with the first round concluding last Sunday, have contributed to a slight strengthening of the euro. The pair opened with a small price gap and managed to strengthen by over 60 pips within a few hours. Experts attribute the rise in the single European currency to the possibility that Le Pen’s far-right party might outpace President Emmanuel Macron’s centrist alliance and the left-wing “New People’s Front” with fewer votes than needed for an absolute majority after the second and final round of voting.
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Gold Price Prospects for H2
As shown by the daily XAU/USD chart:
→ Since November 2022, the price has been moving in an upward channel, marked in orange;
→ Since the start of 2024, the price has risen by approximately 12.5%.
What are the gold price forecasts for the end of 2024?
According to Investing.com, Georgette Boele, a senior sustainability economist at ABN Amro, published a cautious forecast on 27 June, predicting a gold price of $2000 per ounce by the end of the year. In her view:
→ Gold prices peaked at the beginning of the year but have since lost momentum.
→ Anticipated easing measures by central banks have not provided the expected support to gold prices.
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S&P 500: Mid-Year Prospects Analysis
As shown by the daily chart of the S&P 500 (US SPX 500 mini on FXOpen):
→ Since the beginning of 2023, the price has been moving in an upward blue channel. To date, the increase has been over 42%;
→ Since the start of 2024, the price has formed a steeper upward channel (shown in orange). In the first half of the year, the growth has exceeded 14%.
How realistic is it for bullish sentiment to persist? And what might the index quotations be by the end of 2024?
Yahoo Finance reports a decidedly bearish outlook for the S&P 500 (US SPX 500 mini on FXOpen) at the end of 2024, held by Marko Kolanovic, the chief strategist at JPMorgan Chase & Co. He cites the following factors:
→ Economic slowdown;
→ Downward revision of company profits;
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USD/CAD Breaks Key Support
On 25 June, we noted that the USD/CAD price had approached a crucial support level—the lower boundary of a converging triangle, which indicated a relative balance of supply and demand in the market during May.
Since then, the price has bounced twice from this level (as indicated by the arrow).
Today, as the USD/CAD chart shows, the exchange rate is breaking through this key support, indicating a disruption in balance.
This has been influenced by the weakness of the USD. According to Reuters, the US dollar has declined relative to other currencies due to weaker-than-expected US economic data released on Wednesday. These included a weak ISM Services PMI report and the ADP Non-Farm Employment Change report, which might suggest an economic slowdown.
How might the Canadian dollar’s exchange rate change relative to the US dollar?
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Market Analysis: AUD/USD and NZD/USD Set for Steady Gains
AUD/USD is correcting gains from the 0.6735 zone. NZD/USD is showing positive signs and might attempt a fresh increase above 0.6120.
Important Takeaways for AUD USD and NZD USD Analysis Today
- The Aussie Dollar started a downside correction from 0.6735 against the US Dollar.
- There is a key bullish trend line forming with support at 0.6700 on the hourly chart of AUD/USD at FXOpen.
- NZD/USD is gaining pace above the 0.6100 support zone.
- There is a major bullish trend line forming with support at 0.6100 on the hourly chart of NZD/USD at FXOpen.
AUD/USD Technical Analysis
On the hourly chart of AUD/USD at FXOpen, the pair started a fresh increase from the 0.6635 support. The Aussie Dollar was able to clear the 0.6680 resistance to move into a positive zone against the US Dollar.
There was a close above the 0.6700 resistance and the 50-hour simple moving average. Finally, the pair tested the 0.6735 zone. A high was formed near 0.6733 and the pair is now correcting gains.
There was a move below the 0.6720 level. The pair declined below the 23.6% Fib retracement level of the upward move from the 0.6634 swing low to the 0.6733 high. On the downside, initial support is near a key bullish trend line at 0.6700.
The next major support is near the 50% Fib retracement level of the upward move from the 0.6634 swing low to the 0.6733 high at 0.6680.
If there is a downside break below the 0.6680 support, the pair could extend its decline toward the 0.6660 level. Any more losses might signal a move toward 0.6635.
On the upside, the AUD/USD chart indicates that the pair is now facing resistance near 0.6720. The first major resistance might be 0.6735. An upside break above the 0.6735 resistance might send the pair further higher.
The next major resistance is near the 0.6760 level. Any more gains could clear the path for a move toward the 0.6800 resistance zone.
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Market Analysis: Gold and Oil Prices Soar, More Gains Ahead?
Gold price started a fresh increase above the $2,342 resistance level. Crude oil prices are gaining bullish momentum and might soon test $85.00.
Important Takeaways for Gold and Oil Prices Analysis Today
- Gold price started a steady increase from the $2,320 zone against the US Dollar.
- A connecting bullish trend line is forming with support near $2,355 on the hourly chart of gold at FXOpen.
- Crude oil prices extended gains above the $82.00 and $83.00 resistance levels.
- There is a key bullish trend line forming with support at $82.75 on the hourly chart of XTI/USD at FXOpen.
Gold Price Technical Analysis
On the hourly chart of Gold at FXOpen, the price found support near the $2,320 zone. The price formed a base and started a fresh increase above the $2,330 level.
There was a decent move above the 50-hour simple moving average and $2,335. The bulls pushed the price above the $2,355 resistance zone. Finally, the bears appeared near $2,365. A high was formed near $2,364.89 and the price is now consolidating gains.
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US Dollar Consolidates Ahead of Nonfarm Payrolls: Possible Scenarios
In anticipation of the release of one of the most important reports, the NonFarm Payrolls, the US currency has suffered losses across almost all fronts. Earlier this week, the EUR/USD currency pair tested and settled above 1.0800, GBP/USD traded above 1.2700, and USD/CAD fell back to 1.3610.
Today, we might see either continued corrective pullbacks or a resumption of medium-term trends if the employment data deviates from expectations. So, what should we expect?
- Experts forecast a decline in average earnings to 0.3% (if the figure comes in at last month’s level or higher, it could strengthen the US currency).
- The number of new jobs in June is expected to be 194K (if the figure is significantly higher or lower than the forecast, it could cause volatility in major currency pairs).
USD/CAD
Dollar buyers in the USD/CAD pair failed to overcome resistance at 1.3750. A rebound from this level led to the formation of a “bearish engulfing” pattern on the daily timeframe. According to the technical analysis of USD/CAD, the price has approached the lower boundary of the medium-term flat corridor at 1.3610. If the price consolidates below this level in the coming trading sessions, the downward movement could continue towards 1.3520-1.3480. A rebound from 1.3610 could lead to a retest of 1.3700-1.3660.
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GOOG Stock Sets Historic Record
As the chart shows, the GOOG stock price yesterday surpassed the June 27th high and set a historic record at $185.88.
What contributed to this?
→ Overall bullish sentiment in the US stock market. Incidentally, the S&P 500 index (US SPX 500 mini on FXOpen) also set a historic record yesterday;
→ Positive market expectations ahead of the second-quarter earnings report from Alphabet (Google’s parent company);
→ Benzinga reports positive prospects, particularly highlighting the development of YouTube and language models.
Out of 38 analysts surveyed by TipRanks, 32 recommend buying Google stock. The average price forecast is $199 in 12 months.
But why then is Alphabet CEO Sundar Pichai selling over $4 million worth of company shares? According to the Form 4 filed with the SEC, Sundar sold a total of 22,500 shares.
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