Daily Analysis

[Zforex]

EURUSD

In Germany, the annual inflation rate for July 2023 was officially confirmed at 6.2%. This figure was slightly lower than the 6.4% observed in the previous month and remained close to the 14-month low of 6.1% recorded in May. These numbers indicated a gradual cooling of inflationary pressures within the country. However, the rate continued to significantly surpass the European Central Bank's target of 2.0 percent. Notably, the overall inflation for goods decelerated to 7.0% from 7.3%, primarily due to softer increases in the cost of food, as well as services. The inflation eased slightly (5.2% vs 5.3%).
In the July Nonfarm Payrolls (NFP) report, the Unemployment Rate decreased to 3.5% with a Participation Rate of 62.6%. The US added 187K new jobs in the month, and Average Hourly Earnings rose 4.4% YoY, higher than expected. The US Dollar slightly declined, but the job growth suggests a cooling sector while a shrinking unemployment rate may lead the Federal Reserve (Fed) to maintain its monetary tightening policy.
The EUR/USD is hovering around the 1.1000 resistance level. It is now resuming its downward trend, respecting the down channel. The next support levels are 1.0920 and 1.0850. The 100MA on the daily chart is also playing support at the actual levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The potential for further appreciation of the pound sterling (GBP) appears limited due to the Bank of England (BoE) raising interest rates. This move is putting additional strain on various sectors in the United Kingdom, such as housing, employment, and manufacturing. The GBP/USD pair is facing downward pressure because BoE policymakers are indicating the possibility of more tightening measures to bring inflation back to the 2% target.
BoE's Pill expresses confidence that the UK's inflation will ease to 5% within the current year, and the anticipated rate will be reached in the first half of 2025. However, there is a risk that as the British economy strives for 2% inflation, it might enter a recession. Moving ahead, the focus will be on the Q2 Gross Domestic Product (GDP) data.
The GBP/USD found support at the 1.2650 level waiting for GDP data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

Japan experienced a 4.2% year-on-year decrease in household spending during June, a sharper drop compared to the 4% decline recorded in May. This marked the fourth consecutive month of decline, as per official data.
Among household spending categories, food remained the largest expense, while the most significant reduction was observed in spending on furniture and household utensils, which decreased by 17.6% year-on-year.
Also, most officials from BOJ stressed the need to maintain the current monetary policy in place. At the same time, one member suggested that inflation would remain at 2% “in a sustainable and stable manner seems to have clearly come in sight.
USDJPY came back on Friday towards the 141.50 support level but bounced back up bullishly as the dollar is strong. The next target will be to reach 144.00.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

The US Dollar found support in the hawkish remarks made by US Federal Reserve (Fed) Governor Michelle Bowman, along with the rise in US Treasury bond yields. Speaking at an event in Atlanta on Monday, Bowman mentioned, "I will be monitoring evidence of a consistent and meaningful decrease in inflation as I assess the need for potential further increases in the federal funds rate and the duration that the federal funds rate should remain at a suitably restrictive level."
Based on the CME Group's FedWatch Tool, approximately 86.5% of market participants anticipate that the central bank will refrain from raising interest rates in September. Investors still hold optimism for a final Fed rate hike within the year, pending the release of the Consumer Price Index (CPI) data from the United States on Thursday to validate any expectations of a forthcoming Fed rate increase. The renewed demand for the US Dollar caused a decline in the price of gold, pushing it toward multi-month lows.
Although the US10Y yield is decreasing, which could potentially benefit gold, at present, the dollar holds a more favorable position.
Gold reached historically significant support in 1930 and has been hovering around this level, waiting for today's important US labor market data to determine its direction. If it breaks below the current support, it could head toward the 1920 support level. The 200MA (200-day moving average) serves as the primary resistance level to monitoring.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European stocks saw a decline on Tuesday due to pressure on Italian banks following the approval of a 40% windfall tax by the cabinet. Additionally, there were negative impacts from Germany's sticky inflation data and weak trade numbers from China, which dampened risk sentiment.
Italian banks like Intesa Sanpaolo (ISP) and UniCredit (UCG) experienced over a 5% decrease, prompted by Deputy Prime Minister Matteo Salvini's announcement that the new levy on banks' excess profits would fund various initiatives, including reducing the tax burden, implementing tax cuts, and offering financial aid to first-home mortgage holders.
Italy's FTSE MIB (FTSEMIB), which heavily relies on banking, slid by 1.4%, while European banks (.SX7P) suffered a 1.8% drop in response to Moody's credit rating cuts for several smaller to mid-sized U.S. banks. Moody's also indicated potential downgrades for major US lenders.
Germany's DAX index (DAX) experienced a 0.4% decline after data revealed that inflation had eased to 6.5% in July, aligning with economists' predictions.
China-linked mining and automotive companies (.SXPP and .SXAP) saw a decrease as imports and exports in the second-largest global economy fell significantly in July, putting pressure on Beijing to consider additional stimulus to sustain growth prospects.
Global miner Glencore's shares (GLEN) slumped by nearly 3% after reporting a 50% reduction in earnings for the first half of the year.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

EURUSD

The German Harmonized Index of Consumer Price (HICP) matched the market consensus at 6.5%, while the Eurozone Sentix Investor Confidence improved from -22.5 in July to -18.9 in August, aligning with the expected -23.4. Moody's downgraded credit ratings for small to mid-sized US banks, warning of possible cuts to larger institutions due to increased recession risk from higher interest rates. This pressure urges adjustments in finance and real estate after the pandemic. Additionally, sluggish economic rebound and subdued global demand reflect in US trade data. With mostly dovish comments from Fed officials, attention shifts to the upcoming US inflation report as the central bank watches price data until the September policy meeting.
The EUR/USD price action indicates a double bottom, suggesting uncertainty regarding the current level and a clustering of prices at this point. The upcoming support levels are situated at 1.0920 and 1.0850. Furthermore, the 100MA on the daily chart is providing support at the present levels.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The potential for further appreciation of the pound sterling (GBP) appears limited due to the Bank of England (BoE) raising interest rates. This move is putting additional strain on various sectors in the United Kingdom, such as housing, employment, and manufacturing. The GBP/USD pair is facing downward pressure because BoE policymakers are indicating the possibility of more tightening measures to bring inflation back to the 2% target.
The UK manufacturing sector in June will face close examination. The performance of British factories and the preliminary GDP for the April-June quarter will be closely monitored due to the strict policy environment. Observers are curious about whether the economy can steer clear of a recession. In the meantime, reports from the BoE Pill and the National Institute of Economic & Social Research (NIESR) suggest that UK PM Rishi Sunak will indeed deliver on his commitment to reducing inflation to 5% by the close of 2023.
The GBP/USD found support at the 1.2650 level waiting for GDP data to find direction. A breakout of the actual support level may take the price toward 1.2600 followed by 1,2300.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The improvement in China's factory-gate inflation, along with positive news from the Biden Administration, has eased market pessimism and given a break to buyers of the yen pair. Previously, negative factors like Italy's surprise tax on bank profits, downgrades of US banks, UK recession fears, and China's economic slowdown weighed on sentiment, affecting USD/JPY. Additionally, concerns about US and Japanese Treasury bond yields, tensions between Japan, China, and the US, as well as the Bank of Japan's easy-money policy impact the USD/JPY pair. The ongoing low bond yields and the weakened US Dollar Index contribute to these dynamics. Looking ahead, the pair might consolidate gains ahead of key economic data releases.
USDJPY is influenced by the ongoing dollar correction, with the median line on the extended bullish trend serving as noticeable resistance, particularly evident on the daily chart.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

The improvement in China's Producer Price Index (PPI), which measures factory-gate inflation, along with positive news from the Biden Administration reported by Bloomberg, has helped counter the market's previous pessimism. Despite the downbeat China Consumer Price Index (CPI), these factors have contributed to a more positive outlook.
However, Italy's unexpected imposition of a tax on bank windfall profits and the global rating agencies' downward revision of US banks and financial institutions negatively impacted sentiment on Tuesday. This led to a decrease in the gold price, pushing it closer to the lowest point for the month. Additionally, concerns about a potential UK recession and China's slowing economic growth, along with geopolitical tensions between Beijing, Japan, and the US, have further contributed to the overall sentiment.
Looking ahead, the absence of significant data or events might lead gold traders to consolidate their weekly losses before the crucial US Consumer Price Index (CPI) data is released on Thursday. Depending on whether the US inflation data suggests a reduction in price pressure, there is a possibility that the XAU/USD (gold to US dollar) pair could see an extension of its recent rebound.
Gold continues to decline, following a bearish trend where the price is trading above the median line. The median line has been acting as a support level for the past three instances of lower lows in price movements.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European shares rose on Wednesday, with Italian lenders rebounding from sharp losses in the previous session after the government eased its stance on a new banking levy.
Eurozone bank stocks (SX7E) rebounded by 1.4% following a 3.5% decline the previous day. This uptick was due to Italy's decision to limit the new tax to 0.1% of total bank assets, in contrast to the initial surprise announcement of a 40% windfall tax that had triggered a sell-off.
Italian financial institutions like Intesa Sanpaolo (ISP), Banco BPM (BAMI), and UniCredit (UCG) experienced gains ranging from 1.7% to 2.5%.
Investors seemed to overlook data indicating deflation in China's consumer sector and continued declines in factory-gate prices for July. Despite these indicators, the world's second-largest economy struggled to reignite demand.
Regarding specific stocks, Delivery Hero (DHER) saw a 5.8% increase as the German online food delivery company raised its full-year revenue projection.
Novo Nordisk (NOVO_B) inched up by 0.5%, extending its momentum from Tuesday when the Danish pharmaceutical company's shares reached a record high. This surge followed news that its obesity drug reduced the risk of heart disease.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.
​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

Stocks React to CPI Fluctuations, Italian Banks Navigate Tax Reversal, and Fed Contemplates Policy Changes ​

Japan's wholesale inflation rate has been steadily decreasing for the seventh consecutive month, now at 3.6% compared to June's revised rate of 4.3%.

In the United States, the consumer price index (CPI) for July is scheduled to be released at 1:30 p.m. London time. This data holds significant importance as market participants are eagerly observing it to assess whether the Federal Reserve (Fed) will proceed with additional interest rate hikes and the duration of their tight monetary policy. The Fed's next steps will be determined during the September meeting of the Federal Open Market Committee.

Although recent geopolitical tensions between the United States and China haven't elicited an immediate substantial market response, the implications of an executive order signed by President Joe Biden are yet to be fully realized. This executive order is directed at various areas, including private equity, venture capital, joint ventures, and greenfield investments. The order aims to restrict certain new U.S. investments in China's sensitive technological sectors such as computer chips. Additionally, it mandates government notification for investments in other tech sectors.

According to economists surveyed by Dow Jones, there is an expectation that the Consumer Price Index for July will reveal a 0.2% expansion compared to the prior month and a 3.3% upsurge on a year-over-year basis.

Turning to Italy, the government's recent announcement of a windfall tax on the country's lenders caused a sharp decline in banking stocks. However, the situation reversed on Wednesday following clarification from the government. It was explained that the 40% tax would not exceed 0.1% of the bank's total assets.

EURUSD

Italy's recent announcement of a windfall tax targeting its lenders led to a sharp decline in banking stocks. However, the situation took a turn on Wednesday after the government clarified that the 40% tax wouldn't exceed 0.1% of the bank's total assets. Meanwhile, the European Central Bank (ECB) is set to release its economic bulletin, and Italy is scheduled to publish the final July inflation figures.
Currently, market participants are in a state of anticipation, awaiting the release of the US July Consumer Price Index report on Thursday. The anticipated annual CPI rate is 3.3%, up from June's 3%. Additionally, the weekly Jobless Claims report is also on the horizon. These figures are highly anticipated and could potentially trigger significant movements in the market.
The EUR/USD price action indicates a double bottom, suggesting uncertainty regarding the current level and clustering of prices at this point. The upcoming support levels are situated at 1.0920 and 1.0850. Furthermore, the 100MA on the daily chart is providing support at the present levels.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The Financial Times reported UK Prime Minister Rishi Sunak's potential move to restrict investments in the Chinese tech sector, similar to Joe Biden's action. This is notable as Sunak seeks political support after recent by-election setbacks. The National Institute of Economic and Social Research (NIESR) indicated the UK's economy might recover to pre-pandemic levels by Q3 2024. NIESR also discussed recession risk, inflation expectations, and potential Bank of England actions. Market sentiment remains uncertain due to factors including US-China tension, global economic concerns, and central bank actions. Despite this, US stock futures and yields are improving, influenced by upcoming US data. The US Consumer Price Index's positive performance in July could ease concerns about the Federal Reserve's interest rate plans after disappointing Nonfarm Payrolls data.
The GBP/USD found support at the 1.2650 level and formed a pennant pattern while the next resistance level is at 1.2820 and the support will be again the 1.2650.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

Japan's wholesale inflation rate has persistently declined for the seventh consecutive month, reaching 3.6% currently, down from June's revised rate of 4.3%.
Surprising the markets, the Bank of Japan (BoJ) has made a minor adjustment to the Yield Curve Control (YCC) policy. Although the adjustment was modest, it has raised awareness among market participants about the potential for FX intervention if the yen continues to weaken.
The release of the US Consumer Price Index (CPI) holds significance. A CPI figure lower than expected could apply pressure on the USD/JPY pair, while a higher reading might reignite interest in levels beyond 145.000. However, traders above this threshold remain concerned about the possibility of BoJ intervention.
USDJPY hovering around the 144.00 resistance level waiting for today's big data. The next resistance will be the 145.00 level while the support is at 143.50.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

Gold traders will keep an eye on the US Consumer Price Index (CPI) due later in the American session. The inflation figure is expected to rise from 3% to 3.3%, and the core inflation figure is expected to stay at 4.8%.
The recent commentary from Federal Reserve (Fed) speakers indicated that the Fed's stance has shifted from additional rate hikes to holding rates steady. The Philadelphia Fed president, Patrick Harker, stated that the central bank can leave interest rates where they are. Meanwhile, Atlanta Fed president Raphael Bostic states that no further rate hikes are necessary. Market players anticipated that the Fed would be less hawkish in the September meeting. The prospects of the end of the tightening policy by the Fed might cap the upside in the USD and could act as a tailwind for the XAU/USD.
That said, the concern about the economic slowdown in China exerts pressure on the gold price as China is the major gold consumer in the world. The Chinese inflation data on Wednesday showed the Consumer Price Index (CPI) YoY fell 0.3% in July from 0% prior, and the market consensus anticipated a -0.4% decline. Meanwhile, the Producer Price Index (PPI) declined 4.4% YoY, compared to the 4.1% drop expected and a 5.4% decline prior.
Looking ahead, the US Consumer Price Index (CPI) report will have a significant impact on the Federal Reserve's (Fed) future rate hike path and help investors determine the direction of XAU/USD
Gold continues to decline, following a bearish trend where the price is trading above the median line. The median line has been acting as a support level for the past three instances of lower lows in price movements.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European shares began the session on a positive note, with luxury stocks leading the way. This was especially evident after China lifted its ban on group tours in the United States and other significant markets. The STOXX Europe Luxury (.STXLUXP) index saw a rise of 1.6%, and heavyweight LVMH (.LVMH) experienced a notable surge of up to 2.7% during early trading. Hoteliers and airlines, including IHG and Air France (AF), also saw gains. Additionally, insurers (.SXIP) showed strength following positive performance numbers from Allianz (ALV) and Zurich (ZURN), contributing to the 0.5% increase in the STOXX Europe 600 (SXXP).
Paris, where LVMH is headquartered, stood out with the CAC 40 (PX1) index rising by 1.1%. Real estate stocks (.SX86P) also performed well, marking an increase of 1.8%. However, Novo Nordisk (NOVO_B) experienced a 1% decline after a significant surge earlier in the week due to positive news about its Wegovy drug.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

US INDICES:

S&P 500 futures and Nasdaq-100 futures both increased by 0.6% and 0.7% respectively. The latest update on the consumer price index is scheduled to be released at 8:30 a.m. ET. Economists surveyed by Dow Jones anticipate a 0.2% growth in July's CPI compared to the previous month, with a year-over-year increase of 3.3%.
Many individuals on Wall Street are anticipating further indications of disinflation from the CPI report and the producer price index to be released on Friday. Some regional manufacturing figures have also displayed signs of easing, as pointed out by Sahak Manuelian, the head of equity trading at Wedbush Securities.
In addition to the CPI, initial jobless claims and hourly earnings for July will be published on Thursday. On another note, Disney's stock rose by 1.4% after revealing an upcoming price adjustment for ad-free Disney+ subscriptions. The media conglomerate also announced better-than-expected earnings per share for the fiscal third quarter. Conversely, Six Flags saw a decline of 3.5% following a report that was worse than expected.
As of Thursday morning, over 90% of S&P 500 companies have disclosed their earnings for the quarter. Among these, around four-fifths have surpassed Wall Street's expectations, as reported by FactSet.
Nasdaq is forming a double top and currently testing its support level at 15250. If there's a breakout, the price may decline towards 15000, and subsequently 14000.​

Recent days have seen a boost in oil prices due to Saudi Arabia and Russia extending output cuts. This has been accompanied by concerns about supply, driven by the potential for tensions between Russia and Ukraine in the Black Sea region to impact Russian oil shipments.
Attention is focused on the upcoming release of July consumer price data from the United States on Thursday. This data is expected to offer insights into the future monetary policy of the U.S. Federal Reserve.
Adding to the price dynamics, U.S. crude inventories saw an unexpected increase of 5.9 million barrels in the past week, surpassing the 0.6 million barrel rise projected by analysts in a Reuters poll. This information was revealed by the U.S. Energy Information Administration's Wednesday report.
In the same vein, U.S. crude oil exports experienced a record-breaking decline of 2.9 million barrels per day last week. Despite this, market expectations are for an eventual rise in crude exports due to the U.S. crude futures and Brent spread. This perspective was shared by Phil Flynn, an analyst at Price Futures Group.
Meanwhile, recent data has indicated that the consumer sector in China entered a state of deflation, and factory gate prices continued to decline throughout July. These trends have raised concerns about fuel demand in the world's second-largest economy.
Technically, WTI made an awaited breakout beyond the 83-resistance level and now the 100MA on the weekly channel will be the next challenge.

BTCUSD

The upcoming Consumer Price Index (CPI) inflation data is set to be published by the US Bureau of Labor Statistics on August 10. Analyzing on-chain data suggests that there's a possibility of another Bitcoin (BTC) price rally, given the positive market response to the previous month's release.
The impact of the monthly CPI data on BTC prices has strengthened due to increasing Bitcoin adoption among governments and institutional investors. For instance, following the July 12 CPI data release, Bitcoin's price surged by 4%, reaching a new peak for 2023 at $31,500. The question now is whether Bitcoin can achieve a similar feat once again.
Historical data illustrates that Bitcoin has often experienced rallies when the market anticipates a decrease in CPI or a modest increase. For instance, the CPI data from July 12 indicated a mild inflation increase of only 1% in the prior month. In response, Bitcoin's price had risen by 5% in the week leading up to the release, followed by another 4% rally afterward, resulting in a new 2023 peak.
A comparable pattern has emerged in the current week. As of August 9, BTC's price closed at $29,900, reflecting a 4% increase from August 7. On-chain data suggests that crypto traders have been preparing for another round of optimistic price movement following the August 10 CPI release.
Technically, on the daily chart, it appears that yesterday's breakout on shorter time frames might be false, given that the price action is still clinging to the resistance level of 29790. A genuine breach of the current resistance could propel the price towards 31000, while a selloff might lead BTC back to the 100-day moving average on the daily chart.

 

[Zforex]

EURUSD

Market participants are waiting for the US Producer Price Index (PPI). The Eurozone's inflation remains high, impacting growth and inflation prospects. Economists don't expect the 2.0% inflation target to be met until 2025, and rate cuts are unlikely before Q2 2024. In the US, Consumer Price Index (CPI) rose to 3.2%, below the expected 3.3%, while Core CPI fell to 4.7%. Initial Jobless Claims were higher than expected. The US Dollar's response to this data affected the Euro.
The Fed’s Mary C. Daly suggested it's too early to predict rate changes. Eyes are on the upcoming US inflation data and the University of Michigan Consumer Confidence Survey.
The EUR/USD has entered a price range between the support at 1.0940 and the resistance level of 1.1040. The current price action might suggest a potential reversal based on the formed price pattern.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

On the other side of the globe, the UK economy experienced an unexpected growth of 0.2% in Q2 2023, a surprise that caught economists off guard. This growth has positioned the Bank of England (BoE) to consider further interest rate hikes. However, unlike other major advanced economies like Germany, France, Italy, and the US, the UK has yet to fully recover its pre-COVID late-2019 level. Notably, manufacturing and business investment saw remarkable growth in Q2, the manufacturing sector marking its strongest quarter since early 2019. Despite this positive momentum, the UK economy still lags behind by 0.2% from its late 2019 level. Economists foresee potential challenges ahead that might lead to a mild recession later in the year despite recent resilience.
The GBP/USD found support at 1.2650 and forming a double bottom while the next resistance level is at 1.2820 and the support will be again 1.2650.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

The 10-year Treasury bond yields in the US and Japan have decreased, indicating a lack of confidence in central bankers' statements about nearing peak interest rates. US inflation data for July was in line with expectations, but yearly inflation accelerated more than anticipated. Federal Reserve policymakers' comments on inflation were mixed, leading to negative market sentiment. China's decision to allow local governments to raise funds through bond sales boosted market confidence in its economy. Concerns about geopolitical tensions between the West and China weighed on sentiment, supporting the USD/JPY price. Japanese officials are supporting an easy-money policy to bolster the USD/JPY pair. The upcoming US Producer Price Index, Consumer Sentiment Index, and Consumer Inflation Expectations will impact the USD/JPY direction.
As expected, USDJPY reached the 145.00 resistance level. A potential intervention in the market by the Japanese central bank and official authorities might be necessary to prevent the yen from declining further. A breach of the current resistance level could lead to the 146.00 resistance level, while a retracement from the existing resistance level could drive the price towards the 144.00 support level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

The unimpressive inflation data in the US provided a reason for Fed policymakers to celebrate their victory over price pressures. Meanwhile, Philip Lowe, the Governor of the Reserve Bank of Australia (RBA), defended the recent pause in monetary policy by expressing concerns about potential higher unemployment rates. Additionally, recent Reuters polls indicate that both the Reserve Bank of New Zealand (RBNZ) and the European Central Bank (ECB) are likely to keep interest rates unchanged in upcoming monetary policy meetings.
In another context, the sustained defense of the Yuan by Chinese policymakers has boosted market confidence in Asia's ability to overcome economic concerns. This has contributed to a sense of cautious optimism and supported the Gold Price.
It's important to mention that the light economic calendar and the cautious sentiment ahead of the US Producer Price Index (PPI) and the Michigan Consumer Sentiment Index are also impacting Gold buyers' decisions. These factors are influencing the market ahead of the Federal Open Market Committee (FOMC) monetary policy meeting minutes scheduled for next week.
Gold is continuing its bearish trend and is currently awaiting today's PPI data to provide further direction. The next support level is around the 1900 area, which represents a significant confluence point.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

European shares opened lower on Friday following a Wall Street rally driven by mild inflation data that lost momentum. However, better-than-expected earnings pushed the benchmark STOXX 600 towards modest weekly gains.
Wall Street's main indexes ended almost unchanged on Thursday, having surged up to 1% during the session. This rally came in response to data indicating moderate growth in U.S. consumer prices for July, a factor that might influence the Federal Reserve's decision to maintain interest rates in the coming month. Nonetheless, both U.S. and European bond yields continued to rise, putting pressure on equities.
The UK's FTSE 100 (UK100) dropped by 0.6% as the pound gained ground. This movement followed official data revealing unexpected growth in Britain's economy for the second quarter.
In terms of individual stocks, UBS, Switzerland's largest bank (UBSG), saw a 4.2% increase. This rise came after the bank announced it no longer required the public liquidity backstop, which was established as part of its state-sponsored acquisition of Credit Suisse.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

Japanese Yen's Milestone Against Dollar, Global Commodity Trends, and Economic Concerns

On Monday, the Japanese yen surpassed the 145 mark against the US dollar, marking the first instance since November 2022. The Japanese currency briefly touched this significant psychological threshold on Friday as well. This yen weakening trend has been ongoing since late July when the Bank of Japan altered its stance on the yield curve control policy, causing 10-year Japanese government bonds to reach their highest levels in nine years.
According to data from the German federal statistics office, German wholesale prices experienced a decline of 2.8% in July. This follows a 2.9% year-on-year drop in June and a 2.6% fall in May.
In a notable development, West Texas Intermediate (WTI) crude oil contracts for September extended their rally for a seventh consecutive week, a streak not seen since June 2022. Simultaneously, October Brent, the international benchmark, also recorded a seventh straight week of gains. Natural gas contracts for September witnessed a substantial climb of 7.5% this week, marking the most significant weekly increase since mid-June. Additionally, September gasoline surged by 6.5% over the week, the most substantial weekly rise since early March and marking the fourth week of gains in the past five.
Once the largest private-sector developer in China by sales, this company is currently under scrutiny due to the possibility of joining a list of defaulters. Failure to make coupon payments on two dollar bonds within a 30-day grace period puts the company at risk. Its shares plummeted by over 19% in Hong Kong on Monday, following a week where it closed below HK$1 for the first time in its history. Adding to concerns is the revelation that one of China's major private wealth managers missed payments on investment products sold to high-net-worth clients and corporations, raising worries of potential defaults in similar products.
Investors also had geopolitical concerns on their radar after a Russian warship fired warning shots at a cargo ship in the Black Sea over the weekend.
​

EURUSD

Renewed concerns regarding the deepening crisis within China's property sector and its potential repercussions on the global economy prompted investors to seek safe havens during Monday's Asian trading hours. Despite initially being in negative territory earlier in the day, US stock index futures later stabilized during the European morning, which in turn provided support for the EUR/USD currency pair.
Looking ahead, the economic calendar does not include any data releases that might significantly influence the movement of EUR/USD throughout the rest of the day. Consequently, market participants will closely monitor Wall Street's performance to gauge whether there is a continued aversion to risk-sensitive assets.
Should the major US stock indexes open on a bearish note, this could potentially bolster the US Dollar (USD) and create challenges for EUR/USD to stage a substantial rebound.
Meanwhile, a report from Bloomberg earlier in the day highlighted the findings of a recent survey indicating that economists anticipate the European Central Bank (ECB) to implement a further key rate increase in September. Nonetheless, this headline had minimal impact on the valuation of the euro.
The EUR/USD has entered a price range between the support at 1.0940 and the resistance level of 1.1040. The current price action might suggest a potential reversal based on the formed price pattern.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The UK's Office for National Statistics announced on Friday that the Real Gross Domestic Product (GDP) of the UK expanded by an annual rate of 0.4% during the second quarter, surpassing market expectations of a 0.2% growth. Additional data from the UK revealed that both Industrial Production and Manufacturing Production exhibited positive growth, rising by 1.8% and 2.4% respectively on a monthly basis in June.
Although the immediate response from the market provided a boost in demand for Pound Sterling, the bearish start to trading in the UK's FTSE 100 Index tempered the currency's upward momentum. Concurrently, US stock index futures initially rose during the Asian session but later turned negative, underlining a sense of caution prevailing in the market.
The upcoming release of Producer Price Index (PPI) data from the US holds the potential to inject fresh momentum into the latter half of the trading day. Following the report from the US Bureau of Labor Statistics indicating that both the Consumer Price Index (CPI) and the Core CPI had increased by 0.2% on a monthly basis in July, the US Dollar displayed resilience against its counterparts. For the year-on-year comparison, the PPI is projected to rise by 0.7%. Unless there is a significant downside surprise, the USD might maintain its stability leading into the weekend, particularly if the main indexes of Wall Street begin trading in negative territory.
The GBP/USD found support at the 1.2650 level and formed a double bottom while the next resistance level is at 1.2820 and the support will be again at 1.2650.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

USD/JPY bulls take a momentary pause at the highest level seen in a year, as market participants search for further indications to sustain the Yen pair's earlier climb towards refreshing the Year-To-Date (YTD) peak during the initial hours of Monday's European session. This situation underscores the impact of the Bank of Japan's (BoJ) interventions in the bond market and the US Dollar's retreat, despite prevailing negative sentiment.
In line with this, the Bank of Japan (BoJ) offered an unlimited supply of Japanese Government Bonds (JGBs) with residual maturities of 5-10 years at a fixed rate early on Monday in Asia. This move by the Japanese central bank serves to temper the yields on crucial JGBs, thereby stabilizing the Japanese Yen (JPY) value.
Conversely, the US Dollar Index (DXY) retraces from its one-month high, reaching 102.95 at the present moment, as market participants continue their quest for further cues to extend the risk-averse sentiment that characterized the start of the week, even as concerns stemming from China diminish. Worth noting is the suspension of bond trading by China's Country Garden and the non-receipt of payments from a subsidiary of the Chinese conglomerate Zhongzhi Enterprise Group, both of which contribute to China's debt concerns. Additionally, Russia's announcement of equipping new nuclear submarines with hypersonic missiles and the ongoing US-China trade tensions further contribute to the prevailing risk-off sentiment.
The combination of these risk-averse headlines, along with the buoyant US Treasury bond yields and apprehensions surrounding the Bank of Japan's (BoJ) commitment to its ultra-easy monetary policy, has propelled the USD/JPY price towards revisiting the YTD high at 145.25.
A potential intervention in the market by the Japanese central bank and official authorities might be necessary to prevent the yen from declining further. A breach of the current resistance level could lead to the 146.50 resistance level, while a retracement from the existing resistance level could drive the price toward the 144.00 support level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

Gold price (XAU/USD) continues to experience downward pressure, remaining at its monthly low following a four-week-long decline. This trend is driven by unsettling developments from China that are impacting market sentiment and bolstering demand for the safe-haven US Dollar. The prevailing risk-off sentiment is further fueled by geopolitical tensions involving Russia and the firming of US Treasury bond yields. These factors collectively contribute to the US Dollar Index (DXY) maintaining its strength, even as the Federal Reserve (Fed) faces impending policy shifts.
Importantly, the suspension of bond trading by China's Country Garden, along with the absence of payments from a subsidiary of the Chinese conglomerate Zhongzhi Enterprise Group, amplifies China's existing debt concerns. Furthermore, Russia's decision to equip new nuclear submarines with hypersonic missiles, coupled with the ongoing US-China trade dispute, adds to the overall risk-off atmosphere, negatively influencing the XAU/USD price.
On another front, the mostly optimistic indicators of US inflation contrast with the dovish expectations for interest rate futures, indicating that there may not be a Fed rate hike in September. This dynamic poses a challenge to the US Dollar as further information on US price pressures and the release of the Fed Minutes are awaited.
Gold is continuing its bearish trend and the next support level is around the 1900 area, which represents a significant confluence point.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European stocks made marginal gains in early trading on Monday, with defensive sectors such as healthcare and telecoms leading the advance. However, concerns over China's troubled property sector led to declines in mining stocks, tempering the overall gains.
Healthcare stocks saw a 0.2% increase, driven by a 5.4% surge in Philips, which topped the STOXX 600 after Dutch investment firm Exor NV acquired a 15% stake in the company. Exor, in turn, experienced a marginal decline of 0.4%.
The telecoms sector index rose by 0.6%, supported by a 1.5% gain in Deutsche Telekom.
Despite these positive movements, the prevailing sentiment remained largely risk-averse. The European basic resources sector saw a 0.3% dip, while oil and gas stocks slipped by 0.5% due to lower prices of crude oil and base metals. These declines were influenced by heightened worries about China's property sector and a stronger US dollar.
China's top private property developer, Country Garden, announced a suspension of trading in its 11 onshore bonds, further contributing to the cautious atmosphere. Luxury giant LVMH, which has significant exposure to China, also experienced a slight 0.1% decline.
Eurozone bond yields experienced a slight increase, with Germany's benchmark 10-year government bond yield reaching a one-month high.
Indices in commodity-heavy European markets lagged, with the UK's FTSE 100 and Norway's Oslo SE All-Share Index each falling by 0.1%.
Additionally, geopolitical tensions were in focus following a Russian warship's firing of warning shots at a cargo ship in the Black Sea over the weekend.
This week, a range of economic data is scheduled for release, including a flash estimate of euro-zone second-quarter GDP data, updated Eurozone inflation figures, and British consumer price data.
Wall Street futures remained mostly unchanged after Friday's losses prompted by hotter-than-expected US economic data.
Another notable gainer in Europe was Siemens AG, which rose by 0.8% after Berenberg upgraded the German engineering and technology group from "hold" to "buy". DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.
​

Resi Level 3​	Resi Level 2​	Resi Level 1​	Suppo level 1​	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

EURUSD

The EUR/USD pair rebounded from its recent low of 1.0875, rising to around 1.0925, marking a 0.17% gain during the day. The upcoming US Retail Sales data is anticipated to cause volatility in the pair. Germany's Wholesale Price Index for July showed a slight increase from -2.9% to -2.8% YoY, below the expected -2.6%. The ECB's Economic Bulletin, however, suggests lingering uncertainty in Eurozone inflation and economic growth. Fed San Francisco President Mary C. Daly's remarks indicate a cautious stance on rate increases, influencing the Euro's upward potential and affecting EUR/USD. Market focus shifts to US Retail Sales, with expectations of a 0.4% MoM rise in July. There's a rising likelihood of a 25-basis point rate hike in the November Fed meeting. Additionally, upcoming events include Eurozone GDP Q2, Harmonized Index of Consumer Prices MoM for July, and the FOMC Minutes, which could provide further direction for the market.
The EUR/USD touched an important support level and formed a possible reversal pattern that the DXY is confirming too. The next resistance will be the 1.1000 level where also the upper parallel of the downtrend with the 100/200MA, making a solid confluence point.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The British Pound (GBP) experienced a consolidation breakout following a report from the United Kingdom's Office for National Statistics. The report revealed a significant increase in jobless benefits and substantial layoffs within the labor market. This led to the GBP/USD pair extending its upward movement due to a notable rise in the labor cost index. As a result, the possibility of more interest rate hikes from the Bank of England (BoE) is now on the table.
The Unemployment Rate reached a fresh nine-month high of 4.2%, highlighting the challenges in the UK's labor market. The report underscores the potential consequences of the BoE's aggressively tight interest rate policy. Notably, persistent inflation and layoffs are driven by labor shortages and elevated food prices.
The labor market's weak performance contrasts with a healthy growth rate. This shift prompts investors to turn their attention to July's inflation data, which is set to be released on Wednesday at 06:00 GMT. This data will likely shed light on the trajectory of inflation and its potential impact on the economy.
The GBP/USD found support at 1.2650 and formed a double bottom while the next resistance level is at 1.2820 and the support will be again at 1.2650.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The preliminary Q2 2023 Gross Domestic Product (GDP) figures for Japan exceeded expectations with a growth of 1.5% QoQ, compared to the anticipated 0.8% and the previous 0.7%. Additionally, Japan's Industrial Production rose to 2.4% MoM in June, surpassing the expected 2.0% and the previous data.
Japan's Economy Minister, Shigeyuki Goto, predicts a moderate economic recovery, but warns about the risks of a global slowdown and the impact of rising prices. Japanese Finance Minister Shunichi Suzuki hinted at potential intervention from Tokyo, influencing USD/JPY prices, though without targeting a specific price level or favoring rapid fluctuations.
The US Dollar Index (DXY) retreated from a five-week peak, experiencing its first daily loss in four sessions, due to unfavorable inflation indications. The New York Fed's one-year inflation expectations dropped to 3.5% for July, its lowest point since April 2021. Despite this, the survey also indicated confidence in favorable labor market conditions and economic changes.
Meanwhile, the US 10-year Treasury bond yields fluctuated around the highest level since November 2022, at 4.20%. The mildly positive US and European stock futures contributed to positive sentiment in the market and impacted USD/JPY bullish movements.
USDJPY is going toward the resistance level of 146.50. The bullish trend seems strong but the possibility of an intervention by the BOJ seems more than ever possible.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	138.70	137.70	135.50

XAUUSD

People’s Bank of China’s (PBoC) rate cut and a slew of downbeat China data suggesting more stimulus from the Dragon Nation also the yields on US bonds that are making new highs push for gold to touch a strong support level at the 1900 area.
US Retail Sales data for July, anticipated to show a 0.4% month-on-month increase compared to the previous 0.2%, will be crucial in gauging the interim direction of the gold price prior to the release of the Federal Reserve's (Fed) latest monetary policy meeting minutes on Wednesday. Most importantly, monitoring bond market movements will be essential for providing a clear guide.
Gold appears to be losing momentum around the current support area of 1900, and the possibility of a correction seems likely, especially since the DXY has reached a significant historical resistance level.

DAX40

European stocks experienced a slight decline on Tuesday, driven by a drop in real estate shares due to increasing bond yields. However, this decrease was balanced by gains in the retail sector, particularly driven by Marks & Spencer from the UK, which raised its profit expectations.
The real estate sector (.SX86P), often influenced by bonds, saw a nearly 1% decline during early trading. Bond yields across Europe surged, notably with UK gilts (GB10YT=RR), reacting to data showing a substantial growth rate in basic wages in Britain, reaching a new record.
In positive news, British retailer Marks & Spencer (MKS) experienced an 8.4% increase, propelling it to the top of the STOXX 600 index, thanks to its improved profit outlook. Additionally, the broader retail index (.SXRP) saw a gain of 0.7%. Danish jewelry maker Pandora (PNDORA) also performed well, rising by 3.5% as it raised its full-year revenue outlook following second-quarter sales that exceeded analyst forecasts.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

EURUSD

The Eurozone is expected to release economic data on Wednesday, including preliminary Q2 GDP figures which are anticipated to show minimal growth of 0.2%, along with potentially negative industrial production data. Although economists are leaning towards a pause in European Central Bank rate hikes in September, concerns arise within the EU due to persistent inflation and concerning economic data from Germany, indicating a possible slowdown in Europe's largest economy. Concurrently, the upcoming Federal Reserve minutes are anticipated to attract attention as market participants seek deeper insights into the Fed's decision-making process. On Tuesday, U.S. retail sales unexpectedly surged, showcasing resilient consumer spending and strengthening the argument for continued Fed tightening. This viewpoint was further underscored by Minneapolis Fed President Neel Kashkari, who remarked that while inflation is declining, it remains elevated.
The EUR/USD touched an important support level and formed a possible reversal pattern that the DXY is confirming too.
The next resistance will be the 1.1000 level where also the upper parallel of the downtrend with the 100/200MA making a solid confluence point.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

In July, UK headline inflation experienced a significant decline to an annual rate of 6.8%. However, the core consumer price index remained steady, which could pose challenges for the Bank of England. This aligns with economist predictions gathered by Reuters, and it follows the cooler-than-anticipated figure of 7.9% in June. On a monthly basis, the headline CPI decreased by 0.4%, aligning closely with the consensus forecast of -0.5%.
Conversely, core inflation, which excludes volatile energy, food, alcohol, and tobacco prices, remained at 6.9%, unchanged from June, and slightly above the anticipated 6.8% consensus forecast.
The ILO Unemployment Rate in the UK increased to 4.2% over the three months leading up to June, as reported by the Office for National Statistics (ONS) on Tuesday. This reading was worse than the market's expectation of 4%, following the 4% reported in May. Other aspects of the report indicated that wage inflation, as indicated by the change in the Average Earnings Excluding Bonus, reached 7.8% in June, compared to 7.5% in May. Average Earnings Including Bonuses surged by 8.2%, surpassing analysts' estimate of 7.3%.
These robust wage inflation figures led to a rise in UK gilt yields, reflecting the influence of hawkish Bank of England (BoE) predictions. At the current time, the 2-year UK gilt yield has risen to around 5.14% for the day.
The GBP/USD found support at 1.2650 and formed a double bottom while the next resistance level is at 1.2820 and the support will be at 1.2650 again.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

Based on the initial Gross Domestic Product (GDP) data for Q2 2023 released on Tuesday, Japan's economy expanded by 1.5% compared to the previous quarter, exceeding the anticipated 0.8% and the earlier 0.7%. Meanwhile, the annualized GDP growth reached 6.0%, surpassing the estimated 3.1% and the prior 2.7%. Japan's Economy Minister, Shigeyuki Goto, projected a gradual economic rebound, while also stressing the need to monitor the risk of a global downturn and rising prices. Goto exhibited a flexible approach to economic and price concerns.
The primary factor contributing to the weakening of the Yen is the monetary policy divergence between the US and Japan. However, the potential belief that US interest rates have peaked could limit the upside potential of the US Dollar. Additionally, traders are adopting a cautious stance due to concerns about possible intervention by the Bank of Japan (BoJ) in the foreign exchange market. It's noteworthy that the BoJ engaged in significant dollar selling in September and October last year, as the Japanese Yen approached the 145 level.
Finance Minister Shunichi Suzuki emphasized on Tuesday that sudden and rapid currency movements are undesirable. He stated that the government is prepared to respond appropriately, but didn't specify any particular intervention levels, according to Reuters.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
150.00	147.00	145.50	144.00	142.00	140.00

XAUUSD

The price of gold (XAU/USD) has rebounded from its lowest level since late June, driven by anticipation of the US Federal Reserve (Fed) monetary policy meeting minutes. This recovery is supported by cautious optimism in the market due to expectations of more stimulus from China and a potential end to the Fed's tightening cycle, influenced by mixed recent US data. Notably, the lack of action by major central banks in recent days indicates a potential conclusion to the rate-hike cycle, providing a foundation for the XAU/USD price. This is especially true with China's willingness for additional stimulus and resilient Indian statistics.
However, positive US Retail Sales and disappointing Chinese data, coupled with robust US Treasury bond yields, pressured the gold price to a multi-day low recently. The XAU/USD was also influenced by the underwhelming performance of riskier assets like equities, Antipodeans, and commodities.
Looking ahead, the market will closely observe US Industrial Production for July and the Federal Open Market Committee's (FOMC) latest Monetary Policy Meeting Minutes for guidance. It's important to consider that any indications of further rate hikes by the US central bank could potentially push the quote below the key support level of $1,900. Gold appears to be losing momentum around the current support area of 1900, and the possibility of a correction seems likely, especially since the DXY has reached a significant historical resistance level.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1960	1953	1942	1931	1920	1900

DAX40

European stocks started the day on a downturn, primarily due to China-exposed mining companies experiencing losses following underwhelming economic data from Beijing. Additionally, UK stocks were under pressure due to a core inflation print that exceeded expectations.
The UK's prominent FTSE 100 index (UK100) experienced a 0.3% decrease after data revealed that British inflation slowed in July as anticipated, marking its lowest annual rate since February 2022. However, signs of pressure remained apparent in core and service prices.
The European mining sector (SXPP) saw a decline of 0.8% as traders evaluated the likelihood of a subdued economic recovery in China, a major consumer of metals.
China's new home prices fell for the first time this year in July, continuing a series of discouraging economic indicators.
Shares of Swiss eye-care company Alcon (ALC) rose by 1.5% after the company improved its full-year outlook for net sales and core diluted earnings per share.
Meanwhile, Admiral Group (ADM), a British insurer covering automobiles and homes, witnessed a 4.6% increase in its stock value following a slight uptick in first-half pre-tax profit.
DAX is rebounding from the 15800-support level and is now facing the next challenge at the 16000 short-term resistance level. The long bullish trend is evident, but it is currently forming reversal patterns as the price range in the last 3 months indicates weakness in the current trend.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

EURUSD

The DXY is testing July's highs around 103.50, boosted by higher US Treasury yields and cautious market sentiment. The 10-year yield has climbed to 4.27%, while the 2-year yield hovers just below 5%. US data showed a mixed performance, and on Thursday, we expect the release of Jobless Claims and the Philly Fed report.
According to the FOMC minutes, two members advocated for maintaining rates during the July meeting, despite the central bank's decision to raise rates to 5.25% - 5.50%, the highest since 2001. Some FOMC participants voiced concerns about the potential consequences of further tightening. Overall, the message seems to align with the Fed's intention to keep rates steady in the upcoming gatherings. Subsequent to the release of the minutes, the US Dollar resumed its upward momentum.
Although the US Dollar has risen consecutively for several days, its momentum remains robust. The deterioration of market sentiment also contributes to the increased demand for the Greenback. If this trend persists, it could lead to additional losses for the EUR/USD pair.
The EURUSD is heading towards its initial support at 1.0850, followed by 1.0800 where the 200MA and the descending parallel of the bullish long channel can be found.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

DXY

The USD Index (DXY) has surged to its highest level since June 12, buoyed by a hawkish Federal Reserve outlook and a strong US economy. Despite mixed views on rate hikes among policymakers, the focus remains on inflation control. Strong incoming US macro data suggests a potential 25 basis points increase later in the year, driving the 10-year government bond yield to its highest since 2008 and benefiting the US Dollar. Equities' weaker sentiment enhances the dollar's safe-haven status, pressuring the GBP/USD pair. China's economic concerns compound recession fears.
Conversely, the GBP/USD's downside pressure appears cushioned due to the growing acceptance of an upcoming UK central bank rate hike in September. Reinforced by strong wage growth, positive GDP, and slightly elevated CPI figures, the Bank of England's tightening policy is expected to continue. Caution is advised, awaiting clear signs of a sustained rebound from the 100-day Simple Moving Average around 1.2615. Market attention shifts to US indicators, including Weekly Initial Jobless Claims and Philly Fed Manufacturing Index, alongside US bond yield movements, impacting the USD and offering guidance for the GBP/USD pair.
The GBP/USD found support at the 1.2650 level, forming a double bottom while the next resistance level is at 1.2820 and the support will be at 1.2650 again.
​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The USD/JPY pair surged to a YTD high of 146.55 but struggled due to concerns about potential Yen protection by Japanese policymakers. This was balanced by a mix of risk aversion and a hawkish stance from the Federal Reserve, which boosted the major currency pair. Global market sentiment soured as traders worried about the Fed's leaning towards a hawkish bias amidst ongoing economic challenges. China's economic and geopolitical issues, along with inconsistent US data, added to the negative sentiment. The recent Federal Reserve meeting minutes revealed discussions on inflation and a preference for addressing persistent inflation, contributing to the hawkish view. Moreover, concerns grew over China's housing market decline and potential bond crisis. S&P 500 futures hit a five-week low, mirroring Wall Street's losses, while US 10-year Treasury bond yields rose significantly, raising economic slowdown concerns and supporting the US Dollar. Mixed Japanese data and strong US figures also influenced USD/JPY. The future USD/JPY direction hinges on risk developments amid a light calendar.
The price is finding a resistance level right now at the upper parallel of the long bullish channel at the 146.50 level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
150.00	147.00	145.50	144.00	142.00	140.00

GOLD

The price of gold (XAU/USD) has hit a five-month low at around $1,890, then stabilized, as investors search for signals to continue the recent decline. This drop is influenced by concerns from the Federal Reserve (Fed) and cautious market sentiment. Worries about China's economic slowdown and weaker growth in developed countries, combined with stronger US economic data, are pushing up US Treasury bond yields and the US Dollar. These factors are pressuring the XAU/USD. Notably, the US 10-year Treasury bond yields have surged to about 4.29%, the highest since October 2022. This elevated bond yield has previously led to concerns about economic slowdown and negatively impacted riskier assets, while also supporting the US Dollar. Additionally, negative economic forecasts from Fitch Ratings are also contributing to the downward pressure on both sentiment and the price of gold.
Although the lack of major events/data might allow gold prices to stabilize at their recent low, the prevailing risk aversion sentiment and higher yields could keep the US Dollar strong. This could prompt a rebound in XAU/USD unless there is significant positive news/data that weakens the US Dollar and boosts market sentiment.
As gold broke the 1900 confluence point, the next target will be around the 1875 support, followed by the 1845 level.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1940	1920	1942	1900	1875	1845

DAX40

European stocks declined on Thursday, influenced by BAE Systems' drop following its agreement to acquire Ball Corp's aerospace division. Furthermore, apprehensions about prolonged elevated interest rates were ignited by the minutes from the U.S. Federal Reserve's July gathering.
BAE Systems experienced a 3.2% decline after the largest defense firm in Britain revealed its $5.55 billion cash purchase of Ball Corp's aerospace assets.
The aerospace and defense sector of Europe (.SXPARO) encountered a 1.2% decline.
Following a decrease in markets on the previous day due to the divergence of opinions among Fed officials regarding the necessity for more interest rate increases, Wall Street futures exhibited a mixed trend.
Bond yields surged across Europe, especially in Italy and Germany (DE10YT=RR), which applied pressure on the equity market.
Dutch insurer Aegon (AGN) witnessed a 4.7% slump after reporting its first-half results.
In Norway, stocks (OSEAX) dwindled by 0.6% in anticipation of the central bank's verdict on interest rates.
DAX continues the selloff, and the next support level is around the 15500-15400 level.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200

 

[Zforex]

EURUSD

Eurostat is set to release the final Consumer Price Index for July, with the annual rate expected to remain steady at 5.3%, holding no surprises. Additionally, Eurostat will provide a report on the Construction Output for June.
In the US, the economy continues to show resilience, particularly in the Labor market, with solid economic data indicating ongoing strength. Inflation pressures persist, as the latest retail sales data confirms heightened price pressures.
The recent FOMC minutes and statements from various FED members underline the central bank's persistent hawkish stance. Despite the consistent slowdown in the Consumer Price Index over the past months, the FED remains attentive to potential inflationary pressures. This vigilance is evident, even though the downward trend in the CPI has been evident. Given the prevailing macroeconomic conditions, the market is beginning to factor in the possibility of a final interest rate hike within this year.
The EURUSD is heading towards its initial support at 1.0850, followed by 1.0800 where the 200MA and the descending parallel of the bullish long channel can be found.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.1090	1.1050	1.1000	1.0950	1.0900	1.0850

GBPUSD

The recent UK Retail Sales data revealed a decline in July, with sales dropping more than expected on both monthly and yearly bases. This has contributed to downward pressure on the GBP/USD pair due to factors like risk aversion, strong US Treasury yields, and economic challenges in China. Positive UK inflation figures have boosted the pair but concerns about potential Bank of England interest rate hikes remain. The US Dollar Index (DXY) retraced gains as US data improved, causing market caution. Going forward, investors are watching US and UK economic indicators and anticipating insights for the GBP/USD pair. The upcoming Jackson Hole Symposium will focus on analyzing the global economic forecast, particularly addressing inflation.
The GBP/USD found support at 1.2650 and formed a double bottom while the next resistance level is at 1.2820 and the support will be at 1.2650 again.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1.3220	1.3150	1.3000	1.2650	1.2600	1.2400

USDJPY

The economic landscape witnessed significant shifts in Japan and the US. Japan's July Consumer Price Index (CPI) rose unexpectedly to 3.3% YoY, revealing the Bank of Japan's unique approach to ultra-loose monetary policy amid experimentation with flexible bond yield caps. This contrasted starkly with the US, where jobless claims for the week ending August 12 dropped slightly to 239K, underscoring a robust labor market. Simultaneously, the Philadelphia Federal Reserve's Manufacturing Survey for August surged to 12, defying earlier expectations. These trends bolster the case for potential interest rate increases by the Federal Reserve. Looking ahead, the USD/JPY pair's trajectory hinges on USD fluctuations due to a lack of economic releases from both nations. Ongoing concerns surrounding China's debt crisis also loom as a potential risk factor.
The price is finding a resistance level right now at the upper parallel of the long bullish channel at the 146.50 level. The next support will be around 145.00.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
150.00	147.00	145.50	144.00	142.00	140.00

XAUUSD

The surge in gold price could be hindered by increasing activity among gold sellers due to factors like heightened market risk aversion, stronger US Treasury yields, and persistent economic challenges in China. These factors might counteract the positive impact of the US Dollar's retreat, impacting gold's overall trajectory.
Initial Jobless Claims (Aug 11) dropped to 239K from the previous 250K, surpassing the projected 240K. The August Philadelphia Fed Manufacturing Survey improved, reaching 12 from the previous -13.5, outperforming the expected -10.
This situation reveals investors seeking more cues on the potential direction of the US Federal Reserve's (Fed) monetary policy tightening. Market uncertainties persist, making investors cautious and information-thirsty before finalizing decisions.
Next week, investor attention turns to US economic data, particularly Home Sales and Manufacturing indicators. The annual Jackson Hole Symposium will gather central bankers, policy experts, and academics to discuss the global economic outlook, particularly addressing ongoing inflation. The Symposium offers a platform for financial and economic leaders to exchange insights and shape strategies amidst the current inflation landscape.
The next target will be around the 1875 support, followed by the 1845 level as gold broke the 1900 confluence point and the dollar seems strong and can continue the bullish movement.​

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
1940	1920	1942	1900	1875	1845

DAX40

European stocks started the day with a decline on Friday and are set to record weekly losses due to concerns about sustained high global interest rates and reduced growth prospects in China, which have negatively impacted risk sentiment.
The surge in bond yields has placed pressure on equities this week, causing the STOXX 600 to face a potential weekly drop of nearly 2%.
Investor attention has also been focused on China's economy, as a series of economic data and disruptions in the property sector have exposed challenges in the post-pandemic recovery.
Shares of luxury brands with exposure to China, such as LVMH, Kering, and Hermes, declined between 0.6% and 1.2% due to heightened concerns over weak economic growth in the world's second-largest economy.
China Evergrande Group, a troubled developer, filed for bankruptcy protection in a U.S. court as part of one of the largest debt restructuring efforts globally.
European mining companies, which also have ties to China, experienced a 1.1% early trade drop.
The UK's FTSE 100 index fell by 0.6% following data revealing a steeper-than-anticipated decline in British retail sales for July.
In terms of individual stocks, Frankfurt-listed SUSE saw a remarkable 58% surge after the software solutions provider announced its majority shareholder EQT AB's plan to take it private for an offer price of 16 euros per share.
DAX continues the selloff, and the next support level is around the 15500-15400 level.​

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
16600	16400	16200	15650	15400	15200