Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
US Dollar under sustained pressure. What comes next ?
Information is not investment advice
Ichimoku Kinko Hyo
USD/JPY: The pair is trading below the cloud. A downward pressure would lead the pair to exit further the cloud, confirming a bearish outlook.
XAG/USD: Silver facing a further consolidation above 61.8% retracement area. Bulls have returned recently.
US Market View
U.S. stock markets are set to start the week higher, at close to new records, after Federal Reserve officials repeated at the weekend that the labor market needs to improve further before the central bank can reduce its bond purchases. U.S. stocks are seen opening higher Monday, continuing the recent positive tone on the first trading day of August as investors digest generally strong corporate earnings and a dovish message from the Federal Reserve. The major focus, however, has been on the corporate earnings season, which so far has been generally positive. Nearly two-thirds of the S&P 500 companies have reported second-quarter figures so far, and according to FactSet 88% have beaten consensus expectations.
Lael Brainard and Neel Kashkari both warned of potential headwinds from the spread of the delta variant in the U.S., which reported 122,000 new cases on Sunday – the highest since February. Crude oil prices fell on signs of the Chinese economy slowing down, as localized anti-Covid measures started to weigh on fuel demand from commuters and tourists.
U.S. Senators reached agreement on the wording of a $ 1 trillion infrastructure bill, which may now be voted on in the Senate as early as this week. The bill has bipartisan support in the Senate, but is likely to be held up in the House of Representatives, where Speaker Nancy Pelosi has tied it to a separate $3.5 trillion spending package on issues such as fighting poverty and climate change.
China’s official and Caxin PMIs added to evidence of the Chinese economy slowing in July, with the Caixin Manufacturing PMI falling to only 50.3, its lowest since April last year. The delta variant of the Covid-19 virus continues to spread in China. A total of 20 cities and 14 regions have now taken measures of varying strictness to isolate cases in an outbreak that began last week when a flight from Russia arrived at Nanjing airport with an infected passenger. German retail sales increased much more than expected in June following an easing of COVID-19 restrictions, supporting hopes for a consumer-driven recovery in Europe's largest economy.
USA Key Point
- Oil down slightly to start the new week
- Risk appetite keeps more positive in European trading.
- UK July final manufacturing PMI 60.4 vs 60.4 prelim.
- Eurozone July final manufacturing PMI 62.8 vs 62.6 prelim.
- Germany July final manufacturing PMI 65.9 vs 65.6 prelim.
- Dollar mildly softer to start the session.
- Spain July manufacturing PMI 59.0 vs 59.5 expected.
This week, there are a few high-probability trade ideas I'd like to recommend to you. Trading these setups, be sure to implement a proper risk management approach.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.