Indices
MARKET VIEW
Weekly changes: SPX500 -0.87%
SPX500 declined and finished the week at 4,327.16. The index rose at the start of the week after the four biggest American banks provided great second-quarter results. However, by Friday, it went down as COVID started affecting the market.
DXY was strong and closed Friday at 92.675. The U.S. Dollar Index had its largest weekly gain in a month due to upbeat retail sales data.
BULLISH TRIGGERS
The second-quarter earnings season started with great reports from big banks. Giants like Netflix, Intel, AT&T will publish their data next week. Analysts expect additional earnings growth there as well.
The U.S. dollar was bought on the concerns of quicker rates increase. However, the greenbacks' power held back all the majors.
BEARISH TRIGGERS
Amazon and Apple lost more than 1%. Gaining from already high prices became difficult, as SPX500 rose 15% from the start of the year. The investors also started worrying about rising COVID cases.
The U.S.dollar is likely to remain strong over the next month. Bearish triggers will occur once the American data becomes weaker and stops feeding rates' growth expectations.
Currencies
MARKET VIEW
Weekly changes: EURUSD -0.46%, GBPUSD -0.88%, USDJPY -0.19%, NZDUSD -0.14%
The EURUSD pair closed the week at 1.18036. Earlier that week, the price declined and tested 1.1770. The ECB will declare its monetary policy strategy this Thursday.
GBPUSD fell to 1.37613, near its multi-month low of 1.37300. Yesterday U.K. reported the most significant one-day COVID cases spread since the start of the year. Meanwhile, the BoE officials talked about reducing their asset purchase program, but it looks like words will remain only words for now.
USDJPY finished Friday at 110.053, almost unchanged for the week. The Bank of Japan surprised no one with its inaction. Governor Haruhiko Kuroda said nothing we didn’t already know, i.e. that the Japanese economy remains in a bad state, but activity will be picking up amid vaccine progress.
The hefty inflation lifted the New Zealand dollar. The market now considers the RBNZ to be the first major central bank to raise the rate next month. Although the greenback was that firm, it erased the local currency from the current range, so the NZDUSD pair closed Friday below 0.70000 with minor weekly changes.
BULLISH TRIGGERS
The ECB will hold a meeting, and it probably will move the markets because of its hawkish tone of voice.
The BoE released relatively hawkish comments from its official last week about reducing the asset purchase programme sooner than anticipated. This Monday, the country will end all legal COVID restrictions. The BoE concluded its meeting but hasn't changed any policy settings.
BEARISH TRIGGERS
If the ECB meeting results are as non-eventful as were previous ones, the EURUSD will be under pressure. The regulator may delay announcing its hawkish steps till publishing the new summer data.
In the U.K., the focus remains on recent COVID developments in the absence of meaningful events. The Japanese currency was damaged by the BoJ decision of downgrading economic forecasts.
Gold
MARKET VIEW
Weekly changes: XAUUSD +0.41%
By Friday, XAUUSD declined to 1,811 USD after touching 1,834 USD in the middle of the previous week. Gold eased its fourth weekly gain as U.S. Treasury yields reversed some losses made in the wake of dovish comments from Federal Reserve Chair Jerome Powell.
Nevertheless, the precious metal is rising this week, moved by a slide in inflation-adjusted bond yields. Traders are closely watching for clues on the outlook for monetary policy as inflation runs hotter than expected.
BULLISH TRIGGERS
Traders seemed to be buying the dips after Powell repeated his dovish stance, soothed tapering fears of earlier rate tapering and bolstered the appeal of the yellow metal. In addition, concerns about the ongoing COVID-19 outbreaks involving the Delta variant helped limit the losses for the safe-haven commodity.
BEARISH TRIGGERS
Is Gold a hedge against rising costs? That remains an open question. On the one hand, if currencies lose value, the precious metal becomes more valuable. But, on the other hand, central banks could raise interest rates and make yieldless Gold less attractive as a safe haven.
Oil
MARKET VIEW
Weekly changes: XBRUSD -3.61%
XBRUSD ended the week lower, towards 72.51 USD upon volatile trade. The volatility was caused by expectations of growing supplies just when a rise in coronavirus cases could lead to lockdown restrictions and depressed demand.
BULLISH TRIGGERS
OPEC and its allies agreed to gradually raise oil output until December and extend their pact until the end of 2022. The multifaceted agreement gives consumers a clearer view of how quickly OPEC+ will restore the 5.8 million barrels a day. Therefore oil bulls should read this as positive OPEC+ supply management continues.
BEARISH TRIGGERS
The U.S. oil rig count continued its slow increase, gaining two rigs this week to 380 active units. As a result, U.S. crude production has increased by 300,000 barrels per day (BPD) over the last two weeks. According to federal data, the oil rose to 11.4 million BPD in the week ended 9 July, the highest since May 2020.
Cryptocurrencies
MARKET VIEW
Weekly changes: BTCUSD -5.78%
During the week, the price of bitcoin decreased by 5.78%, dropping to the level of 32,000 USD. Over the past seven days, the price of the main cryptocurrency has fallen to the lowest level since 26 June and reached 31,000 USD. Thus, the background on cryptocurrencies remains extremely tense.
BULLISH TRIGGERS
In options, 30,000 USD is the most-sold downside strike price for July and August. This price increases confidence among traders that the level will hold, according to Delta Exchange. The downside price should provide strong support to the market. Traders are also trying to take advantage of price ranges, buying between 30,000 and 32,000 USD.
BEARISH TRIGGERS
The main culprit of BTCUSD's weakened position is China and its measures to ban cryptocurrencies. Bitcoin is very dependent on mining, so when the Chinese authorities began to put pressure on miners, it sharply shook the stability of bitcoin. Unlocking the units of the Grayscale Bitcoin Trust bitcoin fund after six months can also affect the exchange rate. Next week, January shares can be sold for more than 1.4 USD billion, a significant amount for the total market volume. If there is negative news for the market, bitcoin may fall to around 20,000 USD.
For more information: https://www.moneyliferesearch.com/
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