The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
What drives the market on July 1?
Information is not investment advice
The market sentiment is mixed. Let’s look at most interesting movements on the market today.
- The Fed’s chairman Jerome Powell claimed yesterday that the US economy entered the new phase of economic recovery sooner than expected. Encouraging US data proved that the USA is moving forward to the V-shaped recovery. US consumer confidence showed yesterday the largest increase since late 2011. However, there are still challenges ahead as the labor market is still well-below pre-crisis levels. More than 20 million Americans remain unemployed. "All levels of government" should impose stimulus measures "for as long as needed" to support the economy rebound, Powell claimed. Stocks gained.
- The Canadian GDP came better than the forecast. The indicator shrank by 11.6%, while analysts anticipated the 12.5% contraction. CAD rose.
- Virus infection are still rising in some US states. Alarming data indicated that coronavirus cases in 14 states in the USA more than doubled in June.
- Investors worry about a new national security law for Hong Kong. China imposed strict punishment measures up to life in prison for the sedition and collusion with foreign forces. Sino-American tensions escalated. Gold climbed up.
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XAU/USD is heading towards the key psychological mark at $1,800. Just few inches left. Support levels are at $1,760 and $1,720.
The stock index rose on the optimistic speech of Jerome Powell. The price crossed the resistance at 3,075 and took a breath after that. Most analysts anticipate that the stock rally will continue further. Anyway, if risk-off factors outweigh, look for support levels at the 200-day moving average at 3,025 and then at 3,000.
The encouraging Canadian GDP pushed USD/CAD down. The pair met the support at the 100-day moving average at 1.3565. The risk-on market sentiment may push it even lower. If it breaks it down, it will clear the way towards the next support at 1.3495. Resistant levels are at 1.3605 and 1.3685.
ADP non-farm payrolls will be released at 15:15 MT time. If the data turns out better than expected, the market sentiment will improve. Follow the report!
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
The US NFP will be published on August 7 at 15:30 MT time.
The RBA will make a rate statement on August 4 at 7:30 MT time.