Date: 26th July 2024.

The Yen Soars as the Likelihood of a BoJ Rate Hike Rises!

* The Japanese Yen wins back some lost ground as global Central Banks edge closer to rate cuts.
* The probability of another interest rate hike by the Bank of Japan increases.
* July’s best performing currencies are the Japanese Yen (+4.35%), British Pound (+1.41%) and the Swiss Franc (+1.41%).
* Currencies are taking advantage of the weaker US Dollar, but the worst performing currency remains the New Zealand Dollar.

USDJPY – Growing Likelihood of a Second BoJ Rate Hike!

The USDJPY increases in value for a third consecutive week and for a fourth consecutive day. Three factors are contributing to the Dollar decline: The Fed’s upcoming interest cut, the Bank of Japan’s interest rate hike and the political uncertainty in the US. The day’s best performing currency is the Japanese Yen which is currently increasing in value against all currencies.

Currently, the USDJPY is trading below the trend-line and below the 100-Period SMA which indicates in the medium-term sellers are controlling the price actions. The exchange rate is also below the neutral on all oscillators and forms a clear bearish trend price pattern. Currently the only indications pointing towards a loss of bearish momentum is the diversion formed on the RSI. As a result, even though the trend clearly forms downwards, investors need to be cautious of a potential retracement. If the price trades above 152.96, a larger retracement becomes likely. However, if the price falls below 152.015, momentum will indicate the continuation of the downward trend to 151.674 in the short term and 151.267 thereafter.

The likelihood of further monetary policy tightening by the Japanese regulator is growing. Preliminary data for July showed an increase in business activity, indicating a recovery in the national economy. The consumer price index remains above the target level, reaching 2.8% in June, with the core indicator stabilizing around 2.6%. Officials are optimistic about maintaining these high levels, supported by significant wage increases.

According to Reuters, Bank of Japan officials will discuss the possibility of raising the interest rate at their meeting on July 31st. Analysts do not expect active measures until after the summer months. However, investors will price in the adjustment before the decision takes place.

The US Fed experts may turn to “dovish” rhetoric in September, which puts pressure on the dollar. Currently, inflation is slowing growth, business activity is declining, and the labor market is showing signs of cooling.

The US PMI data from yesterday largely triggered an attempted bullish correction but was viewed as mixed. The price action of the US Dollar and the USDJPY will now largely depend on the Gross Domestic Product and Weekly Unemployment Claims. These will be made public at 12:30 GMT. Analysts expect the US economy to grow 2.0%. If the US GDP reading is lower than expectations, the US Dollar potentially can come under pressure. At the same time, weaker earnings data from the US can trigger higher demand for the Japanese Yen. The Yen is known as a safe haven currency alternative to the Dollar.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 30th July 2024.

US Employment Data in the Spotlight as Fed Decision Looms

US ECONOMY

* The US Dollar Index rises to its highest level in 20 days and breaks above its recent price range.
* The market turns its attention to tomorrow tonight’s Federal Reserve Press Conference. Investors will be monitoring any indications of rate cuts for September.
* Analysts again expect the consumer confidence to drop below the 100 level, but investors are more concerned about lower job openings.
* McDonald’s stocks rise as the company confirms a new meal plan to target lower-income consumers. Company earnings miss expectations.

EURUSD – Will US Data Prompt A Dovish Fed?

The EURUSD exchange rate is likely to witness high volatility throughout the day as Germany and Spain are due to release their latest inflation data. In addition to this, the US will release the CB Consumer Confidence Index and JOLTS Job Openings. The US Dollar Index is currently trading 0.13% higher and is rising for a second consecutive day. The Euro Index is currently unchanged and struggled on Monday.

The value of the US Dollar is likely to continue to be influenced by the timing and frequency of interest rate adjustments. As a result, the Chairman’s press conference will play a significant role. The Federal Reserve will not change its Fund Rate, but investors believe the Chairman, Jerome Powell, will provide concrete indications for a September and December cut. If Mr Powell is deemed dovish and points towards 2 rate cuts, the US Dollar can potentially come under pressure.

The downward pressure can gain momentum today, before tomorrow’s Federal Reserve Statement and Press Conference. If today’s JOLTS Job Opening reads lower than expectations (8.02 million), it would be the lowest seen since April 2021. This would fall in line with previous guidance regarding lower economic growth in the second half of 2024. As a result, the Dollar can witness pressure and the Fed may become more dovish.

The Euro on the other hand will depend largely on the German inflation data. So far, Spain has released their inflation figures which showed that Spanish inflation fell from 3.4% to 2.8% and below the previous expectation of 3.00%. The release has put some pressure on the exchange rate, but not lasting downward pressure. If German inflation also reads lower, the Euro can witness a potential stronger selloff.

The value of the EURUSD remains below the trend line, sentiment line and the neutral on the RSI. In addition to this, the asset trades in the lower band of the Bollinger Bands. However, after yesterday’s quick decline the exchange rate has retraced back upwards. Therefore, investors will be monitoring when the asset regains bearish momentum. If upward momentum gains momentum, the trend-line points towards a target at 1.08495 or 1.08420.

USA500 – Will The Price Break The Ascending Triangle Pattern?

The SNP500 forms an ascending triangle pattern which is known to indicate bullish price movement, but only if the price can form a clear breakout. The resistance level at $5,499.12 is key for this as it has triggered a decline on 4 occasions over the past 4 trading days. In addition to this, the level falls in line with the 75-Period EMA and 100-Period SMA.

McDonald’s released their quarterly earnings report on Monday. The company’s earnings fell 3% lower than expectations while revenue was 2% lower. However, the stock still rose by almost 4.00% as the company said a new $5 meal plan will start to entice lower income consumers.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 8th August 2024.

The Dow Jones Drops 2% As JP Morgan Signal Possible Recession.

* JP Morgan advises markets that the economy is at a higher risk of a recession in 2024.
* Representatives of the Federal Reserve advise they will not call for an urgent meeting to cut interest rates.
* Disney beat expectations but theme park visitors significantly fell. Economists advise this shows the drop in consumer demand and the risks of inflation over the past 3 years.
* The Japanese Yen climbs after downward pressure in the first half of the week.

USA30 – The Dow Jones Reaches a Significant Support Level!

The Dow Jones price quickly collapsed after the opening of the US trading session and continues to remain low on Thursday. The decline was largely triggered by the poor performance of Amgen (-5.00%) and Walt Disney (+4.46%). Both stocks came under pressure by the quarterly earnings report which confirmed some risks. On Wednesday, only 35% of the Dow Jones rose in value, while 65% fell.
                           

Dow Jones 2-Hour Chart Illustrating recent Support & Resistance Levels

Disney’s Earnings Per Share for the latest quarter were significantly higher than previous expectations. Earnings were 16% higher while revenue came in as expected. However, the poor performance of the company’s theme parks dampened sentiment and the overall stock market. According to economists, the drop in revenue from theme parks is a result of inflation and lower consumer demand which not only influences Disney’s stocks but the overall market.

In addition to this, throughout the month of August, poor data can be followed by an overreaction as the market’s risk appetite remains low and on the lookout. The next significant quarterly earnings report for the Dow Jones is Home Depot on Tuesday before the market opens.

Another factor which is adding to pressure is the latest comments from JP Morgan, one of the largest US banks of all time. According to JP Morgan, the US economy is now at a higher risk of a recession in 2024, and a recent selloff has wiped out three-quarters of the global carry trade, erasing this year’s gains.

USA30 – Technical Analysis!

In terms of technical analysis, the price of the Dow Jones continues to find support at the $38,577.09 level. However, the price is testing the level for the fourth time this week. The question is, will the index break below the price or find short-term support. Currently the price trades below the 75-Period EMA, 100-Period SMA and below the 50.00 level on the RSI. However, a positive factor is the VIX index trades lower as do bond yields.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 12th August 2024.

How Will the Pound Perform Ahead Of A Vital Week For The UK!

* Economists expect the US inflation rate to remain at 3.0% or to drop to 2.9%. Also, economists expect Inflation excluding Food and Energy to drop to 3.2%.
* The Federal Reserve’s Mrs Bowman advises cuts are needed only if inflation continues to decline.
* According to the CME Group, investors are split over whether the Fed will cut 0.50% or 0.25%.
* The US inflation data tomorrow and on Wednesday will determine how the Fed will cut.
* The Dow Jones await key earnings reports from Home Depot (13th August), Cisco Systems (14th August) and Walmart (15th).

GBPJPY – Key UK Data To Determine The Pound’s Value!

The price of the GBPJPY is trading at the recent average price, but the Pound is gaining momentum ahead of vital economic data. The performance of the Great British Pound will depend largely on the upcoming 5 key economic releases. The Japanese Yen on the other hand has slightly lost momentum after the dovishness of the Bank of Japan in their latest press conference. The performance of the Yen will largely depend on the dovishness of the other central banks such as the Fed, Bank of England and European Central Bank.
                           

GBPJPY 2-Hour Chart Showing The Price Rise Above Moving Averages For The First Time Since July 11th.

Throughout the week the UK will release the following key economic releases:

* Claimant Count Change
* Average Earnings Index
* UK Inflation
* Gross Domestic Product
* Retail Sales

The price of the GBP will depend on how the UK economy and inflation has performed over the past month compared to expectations. According to economists, if the UK inflation rate and GDP read higher than expectations, the Pound is likely to strengthen. However, investors will also be looking closely at the UK employment data as the UK Unemployment Rate has risen to 4.4%. If the unemployment rate rises, the UK’s rate will be at its highest in 3-years and can prompt a more dovish central bank.

Currently, the Pound is the best performing currency of the day, except for the AUD and NZD. The AUD and NZD normally tend to lose momentum as the European session opens. However, the New Zealand Dollar is also gaining momentum ahead of the RBNZ’s Rate Decision. The GBP is trading 0.20% higher so far in the Asian session. Technical analyst and economists consider if investors are increasing exposure predicting positive economic data throughout the upcoming week.

In terms of technical analysis, the price of the exchange is trading above the 75-Period EMA and 100-Period SMA for the first time since July 11th. The RSI is also trading at 59.00 which indicates buyers may be gaining control. The Japanese Yen index is trading 0.42% lower so far, therefore signalling no conflict, but investors will keep monitoring this throughout the week. Particularly once the US start releasing their inflation data. Prices above 188.405 will see stronger buy signals whereas below 186.477 will see traders look for sell signals.

USA30 (Dow Jones) – Investors Eye US Inflation and This Week’s Quarterly Earnings Reports!

On Friday, the Dow Jones traded in a sideways price range after breaking the resistance level. According to economists, the assets sideways movement is due to shareholders wanting to see the upcoming earnings reports. Economists advise the Dow Jones is appropriately priced and investors will look at economic data and earnings first before determining the intrinsic value of the asset. As a result, US data and the upcoming quarterly earnings report will be key.

The Dow Jones On A 2-Hour Chart.

Previously, bad news was good news for the stock market. However, most shareholders will be hoping for slightly positive economic data to improve the risk appetite of the market. It will be key for the US inflation rate to fall if the stock market is to hope for a full correction back up to 14,000. Many economists advise a full correction is unlikely if inflation does not fall.

The performance of the Dow Jones will depend on the quarterly earnings reports and US inflation. The Federal Reserve’s Mrs Bowman advises cuts are needed only if inflation continues to decline. Markets viewed the comments are cautious and less dovish compared to market expectations. However, if inflation does decline, market will start to price a 50-basis point cut for September.

The Dow Jones awaits key earnings reports from Home Depot (13th August), Cisco Systems (14th August) and Walmart (15th). Over the past 6 months Home Depot stocks have fallen 4.60% and Cisco Systems 9.00%. Walmart stocks have risen almost 20% in 6 months.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 15th August 2024.

Earnings and Inflation Boost the Dow Jones, Eyes Turn to Walmart’s Report!

* US inflation falls from 3.00% to 2.90% making a September rate cut certain.
* According to the CME Group, there is a 64% chance of the September rate cut being 25-basis points.
* Japanese GDP data confirms the economy grew 0.8% in the past quarter. The UK economy sees no growth in the latest month.
* Wednesday’s best performing index was the Dow Jones after Cisco Systems beat earnings and revenue expectations.

USA30 – The Dow Jones Is Wednesday’s Best Performing Index!

The Dow Jones is rarely the best performing index due to its exposure to more stable and less volatile stocks. The upward momentum is largely due to the earnings data from Cisco Systems and Caterpillar. Investors will now turn their attention to the last major quarterly earnings report for the week, Walmart.
                           

80% of the Dow Jones’ stocks rose in value on Wednesday due to the significant rise in investor sentiment. Confidence in the stock market improved after the US inflation rate fell from 3% to 2.9% and the core inflation rate remained unchanged at 3.2%. The lower than previously expected inflation saw the market’s confidence rise and particularly support the Dow Jones.

The Dow Jones also saw momentum rise after Cisco made public their latest quarterly earnings report. Earnings per Share was 2.49% higher than Wall Street’s predictions and the revenue rose by almost $1 billion from the 1st to 2nd quarter. As a result, the stock rose by 5.75% after market close. The best performing stocks on Wednesday were American Express and Goldman Sachs. Investors will now turn their attention to Walmart which will release their earnings report before the market opens.

For Walmart, analysts predict the earnings per share to rise from $0.60 to $0.65 and for revenue to rise from $159 billion to $167 billion. The company has beat earnings expectations over the past 12 months due to investors looking to shop on a budget due to recent high inflation. On Wednesday, Walmart stocks rose 0.78% and a further 0.52% after market close. The rise and bullish momentum indicate investors believe the company will continue to perform well on their earnings reports. Walmart holds a weight of 1.12% and Cisco Systems 0.74%.

Dow Jones – Interest Rates and Upcoming Economic News.

After the lower inflation data for consumers and producers there is a 64% chance of the September rate cut being 25-basis points. According to many analysts the Federal Reserve will cut 0.75% by the end of 2024. However, some experts believe the Fed will cut a full 1.00%. This is also something which can be seen on the CME Group which indicates a 44% chance of a 1.00% cut by December.

Investors will now turn their attention to the US Retail Sales, Core Retail Sales and Weekly Unemployment Claims. Ideally shareholders would like to see the data slightly stronger than expectations, but not strong enough to suggest no rate cuts are needed. The Empire State Manufacturing Index and Philly Fed Index will also trigger volatility but to a lesser extent. The only concern for shareholders is a potential rise in tensions within the Middle East!

Currently the VIX trades with no major changes. As do Bond Yields, but a decline throughout the day would benefit the stock market.

Dow Jones – Technical Analysis!

Technical analysis indicates buyers are holding momentum. On the 2-Hour chart, price trades above the 75-Period EMA and the 100-Period EMA. The price also continues to trade above 70 on the RSI but is not indicating an overbought price.  On the 5-Minute chart, the price continues to form bullish crossovers and trade above the VWAP. The price movement throughout as we approach the US session will depend largely on the global stock market performance and Walmart’s earnings report.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 19th August 2024.

Market News – Asian Stocks gain but US in red, Dollar plumMets; Yen the biggest gainer so far.

September Fed rate cut all but a done deal, look ahead to Jackson Hole

* Dovish Fed bets have also boosted hopes of additional easing in Europe, and bonds are falling as markets look ahead to the Jackson Hole Symposium, which is expected to provide new guidance on the direction of US monetary policy.
* The anticipation of lower borrowing costs is boosting investor confidence.
* The US Dollar crashed to its lowest in 5 months. Cooler heads have prevailed as the panicked fears of recession dissipated. The FOMC is widely seen on track for -25 bp rate cuts over the remaining three policy meetings this year.
* Goldman Sachs reduced the likelihood of a US recession within the next year from 25% to 20%, citing the recent retail sales and jobless claims data. If the upcoming August jobs report, due on September 6, shows positive results, “we would likely lower our recession probability further to 15%,” Goldman economists led by Jan Hatzius noted in a report to clients on Saturday.

Asian & European Open:

* Asian stock markets traded largely higher overnight, however, European markets are narrowly mixed in early trade and US futures are in the red.
* The Hang Seng and tech stocks led the way overnight. The Nikkei underperformed and corrected -1.8%.
* The German 10-year rate is down -1.6 bp, the 10-year Gilt -2.3 bp and the US 10-year yield -1.3 bp.
                           

Financial Markets Performance:

* The USDIndex has remained under pressure and hit a session low of 102.00, before picking up slightly.
* The Yen strengthened by 1% against the US Dollar, reaching 145.17 today. The yen’s rise is driven by overall USD weakness, anticipation of BOJ Governor Ueda’s parliamentary appearance on August 23, and Fed Chairman Powell’s speech at Jackson Hole. Markets are looking for signals from Ueda on the future direction of the BOJ’s interest rate policy. Political uncertainty is also influencing expectations, following Prime Minister Fumio Kishida’s announcement that he will not seek re-election as president of the ruling Liberal Democratic Party in September. Some investors are still betting on potential BOJ interest-rate hikes and may be buying Yen ahead of speeches by the US and Japanese central bank leaders later this week.
* USOil prices have also continued to struggle as demand concerns dominate. The USOIL is currently below $75 per barrel as traders tracked US-led efforts to secure a cease-fire in the 10-month old Middle East conflict, while the Russia-Ukraine war is escalating.
* Gold  rallied to an all-time high over $2500 per ounce,on hopes the Fed is edging closer to cutting rates.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 21st August 2024.

Market News – Sentiment stabilize; EU stocks higher after mixed Asian session.

* Safe Havens were boosted by rate cut expectations for the FOMC, as well as the ECB and BoC, and after a dovish cut by the Riksbank. Adding to the strength in the rally are the weaker USD, debt concerns (especially for the US), portfolio hedging, haven demand, along with buying from the PBoC and other central banks.
* Geopolitical risks remain a significant factor too, though they were tempered slightly late yesterday after news Israel had agreed to a cease-fire proposal.
* US bond yields dropped to their lowest since August 5, driven by fears of a recession after weak jobs data earlier in the month.

Asian & European Open:

* European stock markets are slightly higher in early trade, after a mixed close across Asia.
* Chinese tech companies listed in Hong Kong were under pressure and the Hang Seng underperformed with a -0.8% loss.
* Sentiment seemed to stabilize at the start of the European session, and US futures are marginally higher as markets wait for Jackson Hole and signals from major central banks that rates will go down next month.

                       
Financial Markets Performance:

* The USDIndex fell to its lowest level this year against euro as traders prepared for key US payroll data revisions & Fed Powell’s upcoming speech. EURUSD rallied to 1.1132.
* The Sterling and the Yen showed mixed performance against the USD, with traders eyeing Japan’s parliament session and BOJ Governor Ueda’s upcoming testimony. GBPUSD spiked to 1.3050 and USDJPY bottomed to 144.92.
* SMBC economist Ryota Abe expects the US Dollar to weaken to 138 Yen by next year, with the Fed’s rate-cut pace being a critical factor.
* The Aussie hovered near a 1-month high, while the Kiwi touched its highest level since July before slightly retreating.
* USOil was steady close to its $72 floor.
* Gold continued to trade at about $2,500 close to its all-time high, fueled by expectations of impending Fed rate cuts.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 23rd August 2024.

Market News – The Big Day!

   
* Profit taking was seen ahead of Chair Powell’s comments today, weighing on Treasuries and Wall Street as some of the aggressive Fed rate cuts bets were trimmed further.
* US economic data showed mixed results, with growth relying more on the service sector as manufacturing slows. A better than expected S&P Global services print, a bounce in new home sales, and cautious comments from several Fed officials from Jackson Hole were the catalysts for the selloff.
* The Yen rose after BOJ Governor Kazuo Ueda hinted at potential interest rate hikes, reaffirming the BOJ’s stance if economic data aligns with forecasts. This follows concerns after the BOJ’s July rate hike caused a global equity selloff. Japanese inflation data exceeded expectations, supporting the Yen as well.
* Focus on Powell’s Speech: Traders are awaiting Federal Reserve Chair Jerome Powell’s speech for clues on potential rate cuts. Some have been warning that the event risk is that Powell will be more cautious than markets are now expecting, which could weigh on the Euro and Sterling in particular.

                   
Asia & European Sessions:

* Wall Street tumbled, with losses accelerating into the close. The NASDAQ finished with a -1.67% plunge, while the S&P500 was -0.89% lower, and the Dow was down -0.43%.
* Asian equities were mixed, with Chinese shares helping to erase earlier losses. Global stocks were volatile, with declines in Hong Kong, South Korea, Australia, and the US.
* Alibaba’s Hong Kong listing upgrade was approved, which is expected to attract significant investment. However, Chinese tech stocks like NetEase, Baidu, and Bilibili fell due to weak earnings.

Financial Markets Performance:

* The USDIndex has extended its declines, falling to 100.93. The buck has not closed with a 100 handle since April 2022.
* EURUSD has inched down to 1.1130 after drifting to 1.1097, but is still near the highest level in a year. Sterling outperformed and Cable rallied to 1.3120 after strong PMI data. The USDJPY is trading at 145.27 (S1) after a broader correction in the Yen.
* USOil steadied between 72.58-72.94.
* Gold has inched down to $2470 per ounce and still holds below the $2500 level.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 27th August 2024.

Market News – Stocks mixed; Big Tech pulled down; Oil unchanged amid supply concerns.

Asia & European Sessions:

* US: Some steam came out of Friday’s rally as Treasuries and Wall Street corrected from overbought conditions. The bond market had already priced in at least a -25 bp rate cut on September 18, though yields dropped further following Chair Powell’s confirmation. With little on the docket until Thursday’s claims data, the market gave back some of its gains. There was also a little concession building ahead of the start of the $183 bln in auctions.
* The S&P500 rose to 5651 in early action, but failed to test the record high of 5667 from July 16. The NASDAQ slumped -0.85% on profit taking ahead of Nvidia earnings Wednesday. The Dow was up 0.16%.
* Several technology companies tip the market because of their big values. Nvidia lost 2.2%, Microsoft fell 0.8%, Amazon dropped 0.9%, Meta Platforms slid 1.3% and Tesla lost 3.2%.
* China: Industrial profit data for China was robust, but mainland China bourses still struggled, while the Hang Seng managed slight gains.
* Europe: The Stoxx Europe 600 climbed 0.3% at the open, DAX and FTSE 100 are currently up 0.1% and 0.4% respectively. The UK is catching up after the extended holiday weekend.
* German data confirmed that GDP contracted -0.1% q/q in the second quarter and GfK consumer confidence data unexpectedly declined, which coupled with deteriorating business confidence flags recession risks.

Financial Markets Performance:

* The USDIndex index is at 100.85.
* EURUSD and Cable are consolidating but remain at high levels at currently 1.116 and 1.319 respectively. Both flagged that monetary policy will have to remain restrictive for the time being. That won’t prevent additional rate cuts, but highlights that central banks will move cautiously.
* USOil closed with a 2.9% pop to $77.04 after news Libya was shutting supply added to the bullish impact of increasing tensions in the Middle East.
* Gold firmed to $2509 per ounce on geopolitical risks and rate cut prospects.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 29th August 2024.

Market News – Nvidia dropped after hours; Equities mixed; Dollar pared some losses.

Asia & European Sessions:

* Nvidia dropped about -7% in after hours trading in Frankfurt this morning, mirroring a fall in US after-hours trading which took Wall Street futures down with it. Though Nvidia’s guidance fell short of lofty expectations, the company’s revenue more than doubled to $30 billion in the fiscal second quarter, ending July 28. Additionally, Nvidia’s board approved $50 billion in new stock buybacks.
* Beats from Salesforce and CrowdStrike help contain losses. Nvidia reported solid results but the bar was so high that the data failed to top the most bullish estimates..
* The NASDAQ led the decline, dropping -1.77% before paring losses into the close to finish -1.12% lower. The S&P500 tumbled -1.1% before closing with a -0.6% loss. The Dow trimmed its -0.99% decline to -0.39%
* In Japan, a 2-year government bond auction attracted the highest bid-cover ratio since 2019, spurred by recent yield increases.
* In China, the downbeat earnings trend persisted. Shares of electric vehicle maker Li Auto Inc. plummeted by up to 15% after missing forecasts, while BYD Co. also declined despite posting a 33% profit increase. Contributing to the negative sentiment, UBS Group AG lowered its growth forecasts for China for this year and next, citing a more severe property market downturn than expected.

Financial Markets Performance:

* The USDindex has pared some of yesterday’s gains and is at 101.17.
* The New Zealand Dollar gained strength following a surge in the country’s business confidence to a decade-high.
* Oil prices steadied after a 2-day decline, with stock market losses balancing out a reduction in US inventories and supply disruptions in Libya.
* Gold traded just below its record high, poised for a monthly gain.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 2nd September 2024.

Is The Dow Jones Overpriced? The DJIA Declines On Monday!

*Markets expect US employment data to improve adding a further 160,000 employees to the country’s payroll.
*Analysts expect US Job vacancies to drop to their lowest level in 2024, but to remain at the 5-Year Average.
*According to the Chicago exchange, an interest rate cut on September 18th is certain. Markets expect a 0.25% rate cut.
*Strong gains on Friday evening saved the US Stock Market from witnessing another bearish close.

Dow Jones (USA30) – Recurring Pattern

On Friday, the stock market quickly fell at the opening of the US Session but thereafter the market quickly rose to close at a higher price. Investors should note that of the past 7 trading sessions, this has been a known pattern. Of the past 7 trading sessions the price has fallen at the open and then corrected on 5 occasions. A positive factor for the Dow Jones is the price is forming higher swing lows and is witnessing less bearish momentum over the past week.

Dow Jones Components

The Dow Jones’ components on Friday saw 5 stocks fall while 25 stocks rose in value. Therefore, 83% of the index rose in value confirming buy signals could have been relevant. Though, during today’s session investors should note that the US 10-Year T-Bond rose in value by 42 points. Currently, the VIX index is more or less unchanged, but as the US 10-Year T-Bond trades significantly higher, investors will need to be cautious of volatility. If the VIX increases in value and Bonds Yields remain significantly higher, the price of the Dow Jones may witness a horizontal trend.  It will also be vital to again review the percentage of the components witnessing bullish and bearish price movements.

Earnings season is almost at a close, the only major company yet to release its earnings report is Broadcom. However, Broadcom stocks are not a component of the Dow Jones and the report will simply impact the market only through the broader market sentiment. Analysts will concentrate their attention on this week’s ISM PMI release, JOLTS Job Openings and the Employment data on Friday.

Ideally investors will want to see neither weak data which will trigger low consumer demand fears, nor positive data which will make rate cuts less likely. Ideally, investors would like to see the data read in line with expectations. Currently the market is pricing in 0.75% to 1.25% rate cuts in 2024. If the Fed indicates less than 0.75%, the stock market is likely to be overpriced.

Dow Jones Technical Analysis

In terms of technical analysis, the Dow Jones has been the only index which has continuously held above the 75 and 100 Period Moving Averages. Meanwhile, the SNP500 and NASDAQ have been unable to maintain momentum. Higher demand is due to the Market’s lower risk appetite and investors increasing exposure away from the technology market. However, the price is now trading very close to its all-time highs and close to its overbought market on most oscillators. Therefore, investors will be looking for further price drivers to regain momentum.

Dow Jones 10-Minute Chart on September 2nd

According to Fibonacci retracement levels, if the price declines, a retracement could fall as far as $41,339.55. If global indices rise and at least 65-70% of the Dow Jones’ stocks rise, investors may deem a breakout of the $41,641.00 level as a signal to speculate a price increase.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 4th September 2024.

Stocks Suffer Sharpest Drop Since August 5th, What’s Next?

*The stock market witnesses its worst session since August 5th. The NASDAQ drops more than 3.00% as 80% of its stocks decline.
*The VIX rises more than 5% indicating a low risk appetite as investors fear lower consumer demand and the unwinding of certain hedge positions.
*The price of the Japanese Yen increases in value for a second consecutive day.
*ISM PMI data improves but investors turn their attention to JOLTS Job Openings and NFP.

NASDAQ (USA100) – 80% of Stocks Decline But Will Investors Buy The Dip?

The NASDAQ is trading at its lowest price since August 13th after witnessing its worst trading day since August 5th. Throughout all 3 trading sessions the price of the index fell 3.40% and is now trading firmly below trend lines and neutral levels on Oscillators. The question now is whether the price is oversold and if investors are unwilling to trade at such high prices.

The decline was not solely related to the NASDAQ, but the whole US stock market as well as global stocks. The NIKKEI225 fell a further 1.50% today and the DAX is due to open 0.60% lower. Simultaneously the VIX is trading higher for a third consecutive day. These are known to be indications of lower sentiment towards stocks.

The decline came about due to the lower risk appetite, the unwinding of hedge positions which involved the Japanese Yen and fear of lower consumer demand. The index was also influenced by the higher PMI data from the ISM which indicated higher economic sentiment. As a result, a 50-basis point rate cut becomes less likely applying further pressure on the stock market. However, this will also depend on this week’s employment data and next week’s inflation rate.

All of the 12 most influential stocks fell in value and of the top 50 influential only 7 ended the day at a higher price. The question now is whether investors will now look to purchase the lower price. This will largely depend on today’s JOLTs Job Openings which analysts expect to read slightly above 8 million. Ideally investors will want to see higher job openings in order to give them confidence the consumer demand will not fall. According to economists, even with a slightly higher figure, the Federal Reserve is still likely to cut interest rates.

Since the opening of the European Cash Open, the VIX has slightly fallen and European stocks are attempting a rebound. This is also something traders will monitor because if the momentum continues it may indicate a different price movement, such as a correction. Nonetheless, this will still largely depend on today’s release.

USD/JPY – Technical Analysis

The Japanese Yen is the day’s best performing currency while the US Dollar is the worst performing currency. The USDJPY is also trading below the trend-line, 100-Period SMA and below the 50.00 level on the RSI. The exchange rate has also fallen below 144.904 which is a key level on the Fibonacci levels.

The Institute for Supply Management reported that in August, the US Manufacturing PMI increased slightly from 46.8 to 47.2 points, but still signals a slowdown in the industry. This slowdown meets the Federal Reserve’s conditions for easing monetary policy. Many experts now expect the Fed to lower interest rates three times, by a total of 100 basis points, by the end of the year. If the day’s JOLTS Job Openings read lower than 8 million, the US Dollar can witness higher downward momentum.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
Market Analyst
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.