Indices
Weekly changes: SPX500 +0.99%
The SPX500 closed at a new all-time high of 4,468.00 USD. This record marked the second straight week of gain in the index. However, the U.S. quarterly profits season will finish next week. The SPX500 earnings will probably jump 93% versus the expected 65%.
The U.S. dollar kept the week firm at 93, near four-month highs, but was pushed lower by the Consumer Sentiment data and the Treasury yields, closing the DXY at 92.52.
BULLISH TRIGGERS
The American equity funds have witnessed the inflows for the third straight week. Hence, the funds have acquired inflows worth 2.67 trillion USD in the week. The main reasons were the solid Q2 earnings, positive economic data, and the Senate's infrastructure bill.
The speculations on tapering kept pushing the U.S. dollar higher almost all week long. The PPI posted its most significant increase since 2010. The declined jobless claims also supported the greenback. Nevertheless, the value of the net long dollar position rose from 2.11 billion USD to 3.08 billion USD in a week, reaching its highest level since early March.
BEARISH TRIGGERS
Michigan's Consumer Sentiment report chilled the equities' optimism, as its index fell to its lowest in a decade. The fall showed that COVID-19 impacts consumers, and the more its story spreads inside the USA, the more extreme changes may occur in the SPX500 sectors that are currently gaining.
Just like a week ago, the U.S. dollar couldn't hold the gains and repeatedly declined on Friday. This time the greenback retreated due to the drop in Treasury yields and the drawdown of the University of Michigan's Consumer Sentiment.
Currencies
Weekly changes: EURUSD +0.43%, GBPUSD +0.06%,
USDJPY (–0.55%), AUDUSD +0.55%
The EURUSD pair managed to recover from the multi-month lows of 1.17050 and finished the week at 1.17944.
The GBPUSD pair closed Friday at 1.38597, having managed to restore its status quo of the previous week's closings.
The USDJPY pair moved sharply lower and settled at 109.567. During the week, the pair reached the one-month high of 110.789, but as the yield of the U.S.10-year Treasury note fell to 1.28% on Friday, there was no way back for the pair.
The AUDUSD pair recovered within the range and ended the week with modern gains at 0.73676. The pair has been trading sideways during the month, dependent only on the American news and reports. The economic situation in Australia gets soured because of the COVID as time goes by.
BULLISH TRIGGERS
As far as the U.S. CPI data showed some slowdown and expectation of inflation peaked, the Fed became comfortable not hurrying towards the urgent early tapering. The EURUSD pair rose and approached 1.1800. This week only the U.S. Retail Sales indicator may be the external obstacle of the pair's further uptrend. Upbeat U.K. CPI readings may push the GBPUSD to new heights as well.
The GBPUSD pair rose strongly on the back of the U.S. dollar's weakness due to the good U.K. GDP data. The AUDUSD pair's chart resembles what is going on with the GBPUSD. The difference between the pairs is in the weakness of the U.S. dollar as the only point for AUDUSD uprise. The Australian dollar is still incapable of attracting buyers due to the long-lasting battle with COVID-19.
BEARISH TRIGGERS
The technical indicators of the EURUSD and GBPUSD pairs are right at the overbought levels, showing the possible change of trend. At the same time, the eurozone and the U.K. will see the important economic data release this week, and their digits may underperform the pairs' growth.
The USDJPY pair turned bearish, breaking below the 110.00 plateaux. Tonight the Japanese GDP figures are due to release. The figures success may give the pair the opposite direction since the technical indicators have already reached the oversold conditions.
Gold
Weekly changes: XAUUSD +5.72%
On Monday, gold went down to 1,682 USD, its lowest since 31 March. This sharp fall happened mainly due to strong nonfarm payrolls data that renewed early Federal Reserve taper bets.
Nevertheless, the publication of the U.S. consumer price data helped gold recover to 1,779 USD by Friday since the yellow metal is seen as a hedge against inflation. Investors acknowledged the rebound but noted that gold had now stuck in a 1,760–1,780 USD range and said it needed to do more to return on a bullish track. Traders are looking for more hints from the Federal Reserve on its monetary policy plans.
BULLISH TRIGGERS
Ongoing COVID-19 disruption means it is more likely that central banks globally will continue to provide stimulus programs, which support higher gold prices in the long term. In the short term, gold may hold positions between 1,760 USD and 1,800 USD.
BEARISH TRIGGERS
Inflationary pressure will be temporary, and gold will trend lower over expectations for the rise of real bond yields and the U.S. dollar strengthening. The Fed rate hike will increase the opportunity cost of holding non-yielding gold while boosting the greenback.
Let's take a trial: Forex?Gold?Indices?
Register Now: Submit a contact form
No comments:
Post a Comment