Market sentiment cautiously improved this past week as the Dow Jones and S&P 500 climbed, placing pressure on anti-risk currencies like the US Dollar and Japanese Yen. Gains were not spread out evenly however, this time around the tech-heavy Nasdaq Composite lagged behind the former two indices. Dismal earnings from Netflix might have contributed to this.
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Coronavirus cases continue to grow at record daily levels in the world’s largest economy, but thus far it has not been able to materially shift the outlook for 2021 GDP estimates. With that in mind, how government officials continue treating outbreaks will be key to watch. A reintroduction or more stringent lockdown measures could risk derailing bets of a swift economic recovery.
All eyes will remain on the ongoing earnings season, with attention particularly focused on tech companies as they defend their relatively elevated stock valuations. Microsoft will have its report this coming week on Wednesday. Other companies to watch include IBM, Intel, American Express, AT&T and Tesla.
The economic docket is also fairly light. The Canadian Dollar and British Pound await retail sales data from their respective countries. The US releases flash Markit PMI statistics on Friday. With that in mind, investors may put a greater premium on other critical fundamental news flow such as the next round of stimulus from the US after this weekend’s EU summit on a recovery package.
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The Australian Dollar may fall as rising US coronavirus cases may result in lockdowns being reinstated. The S&P 500 and Dow Jones also look wobbly with earnings season in full swing.
OPEC+ producers will begin easing recent supply cuts from the start of August as demand continues to pick-up.
Gold prices are on course for a 6th consecutive weekly gain, the first time in over a year.
The US Dollar may extend its losses against its G10 peers as signs of economic stabilization alleviate demand for haven-linked assets like the Greenback.
The major equity markets will look to another string of high profile earnings reports in the week ahead as other tech members throw their hat in the ring following a rough start to the season.
Another overbought reading in the Relative Strength Index (RSI) is likely to be accompanied by a further appreciation in EUR/USD amid the bullish behavior seen in June.
The Hang Seng Index is set to test a key support at 25,000 after falling 2.3% last week, wiping out almost two weeks of gains and entering into consolidation.
This week, Crude oil surged to a multi-week high then fell after. Will Brent oil resume bullish price action in the coming days?
Sterling is poised to snap a two-week winning streak with GBP/USD holding just below critical resistance. Here are the levels that matter on the weekly chart.
USD/CAD has been stuck in a range the past month, but at some point this will give-way to a move; levels and lines to watch in the days ahead.
The US Dollar has pushed back down to a key support level that’s helped to hold the lows since March of 2019. Can sellers finally pose a downside breach?
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD