• Median expectations for inflation over the next 12 months seen at 2.8% (unchanged vs May)
• Median expectations for inflation three years ahead seen at 2.3% (unchanged)
• Median rate of perceived inflation over the previous 12 months seen at 4.5% (previously 4.9%)
• Economic growth expectations for the next 12 months seen at -0.9% (previously -0.8%)

The headline finding is similar to May and marks the lowest level since September 2021. Meanwhile, uncertainty about inflation expectations over the next 12 months also remained unchanged at its lowest level since February 2022. Overall, it points to consumers still feeling better on the inflation outlook but the levels are still not quite where the ECB desires just yet.

This article was written by Justin Low at www.forexlive.com.

• Eurostoxx +0.1%
• Germany DAX -0.4%
• France CAC 40 +0.2%
• UK FTSE +0.4%
• Spain IBEX -0.2%
• Italy FTSE MIB -0.1%

It’s been a mixed week for European indices, though a really poor one for French stocks. The CAC 40 is still down 1.2% this week even after accounting for the slight gains to start the day. US futures are holding in a better spot though, with S&P 500 futures up 0.5% and Nasdaq futures up 0.8% currently.

This article was written by Justin Low at www.forexlive.com.

The idea here is that Trump wants to be the people’s man. He wants to boost opportunities for domestic manufacturing and that means making production in the US more attractive. To achieve that, his go to will be to aim for a weaker currency. But realistically, can he make that happen?

On the surface, it looks rather unlikely. And even if you try to search for reasons, it is a tough one to imagine. It didn’t happen during his first term as president and it doesn’t look like it will this time either.

For one, Trump is still looking to adopt the same approach on trade. Tariffs and trade wars are not something to drag the dollar down. Instead, these protectionism policies only raises more risks for emerging markets and the geopolitical implications also only serve to bolster the dollar’s standing; all else being equal.

In particular, Trump’s constant feud with China is one that could stoke higher inflation down the road and that will make it even tougher for the Fed to pursue lower rates. Gotta bring back this classic every now and then.

Besides that, Trump is also planning for more tax cuts as a whole. Again, when you take that into consideration, this just serves to bolster domestic demand and in turn keeps spending high and stoke the flames of inflation as well. At the end of the day, it just means the Fed will once again have to deal with that and likely keep policy in a tighter spot.

You can sort of see where this is going now, can you?

Yet, the only realistic option for Trump to weaken the dollar is to pressure the Fed into cutting rates quicker. However, will the central bank throw away whatever independence they have left just to appease him? It is doubtful.

Powell certainly didn’t do it during Trump’s first term and the Fed certainly won’t want to mess things up especially during such a crucial stage of the economic cycle. Stagflation risks are still very much up in the air and it’ll leave such a stain on Powell’s legacy if he makes the wrong step, and more so just because he wanted to play politics.

All that being said, it doesn’t mean that Trump will not get his wish.

The disinflation trend in the US is continuing to take hold, albeit still at a more gradual pace. But as it stays the course in the months ahead, the Fed might just be in a spot to cut rates in a continuing manner going into next year.

And that is a key factor that could pressure the dollar lower amid lower rates/yields. All that before Trump’s policymaking is accounted for.

So, there is a chance he may get his wish after all. But in all likelihood, it probably won’t be because of his doing. Yet, as a true politician, he will definitely take credit for it – if it happens that is.

This article was written by Justin Low at www.forexlive.com.

• Prior 89; revised to 90

Household confidence improved in July but remains well below the long-term average of 100 still. Expectations for future inflation eased further while the outlook for the financial situation improved slightly, though still remaining in negative territory.

This article was written by Justin Low at www.forexlive.com.

Global Markets:

•  Asian Stock Markets : Nikkei down 0.64%, Shanghai Composite down 0.18%, Hang Seng up 0.14% ASX up 0.76%
• Commodities : Gold at $2366.35 (0.47%), Silver at $27.81 (-0.45%), Brent Oil at $82.43 (0.07%), WTI Oil at $78.39 (0.08%)
• Rates : US 10-year yield at 4.257, UK 10-year yield at 4.138, Germany 10-year yield at 2.442

News & Data:

• (USD) Advance GDP q/q  2.8% vs 2.0% expected
• (USD) Unemployment Claims  235K vs 237K expected

Markets Update:

Asia-Pacific markets rebounded on Friday after Thursday’s sell-off hit multi-month lows for several indexes. Traders assessed Tokyo’s July inflation data, a key indicator of national trends. Tokyo’s headline inflation dipped to 2.2% in July from 2.3% in May, with core inflation steady at 2.2%. The “core-core” inflation, excluding fresh food and energy, fell to 1.5% from 1.8%. The yen strengthened sharply against the dollar, now trading at 153.79.

Japan’s Nikkei 225 was nearly flat, while the Topix rose 0.25%. Renesas Electronics plunged over 6%, reaching its lowest price since April, following a 29% drop in net profit for the first half of the year. This resulted in a 760 billion yen ($4.9 billion) market cap loss on Thursday. Nissan fell 3.92% after dismal Q1 results, with a 99% drop in operating profit and a 72.9% fall in net profit. Honda, however, rose 0.91% on plans to close a factory in China and increase electric vehicle production.

Taiwan’s market returned post-typhoon, with the Taiwan Weighted Index plunging 3.33%. Heavyweights Hon Hai Precision and Taiwan Semiconductor Manufacturing fell 4.71% and 5.52%, respectively. South Korea’s Kospi rose 0.62%, while Australia’s S&P/ASX 200 increased 0.76%. Hong Kong’s Hang Seng index climbed 0.14%, and mainland China’s CSI 300 traded flat.

Singapore’s monetary authority maintained its policy, keeping exchange rate settings unchanged. In the U.S., tech stocks continued to slide, with the S&P 500 and Nasdaq Composite losing 0.51% and 0.93% respectively, while the Dow Jones rose 0.2%. Adam Sarhan of 50 Park Investments noted this is part of a typical “great mini rotation” in a bull market.

Upcoming Events: 

• 12:30 PM GMT – USD Core PCE Price Index m/m
• 12:30 PM GMT – USD Personal Income m/m
• 12:30 PM GMT – USD Personal Spending m/m

The post Friday 26th July 2024: Asia-Pacific Markets Recover After Sell-Off first appeared on IC Markets | Official Blog.

IC Markets Europe Fundamental Forecast | 26 July 2024

What happened in the Asia session?

Tokyo’s core CPI has now accelerated for the third consecutive month as it jumped from 1.6% in April to 2.2% YoY in July. Inflationary pressures are building and it could pave the way for the Bank of Japan (BoJ) to move ahead with a rate hike at next week’s monetary policy announcement. The yen has gained nearly 4.3% over the past three weeks as USD/JPY fell under 152.50 yesterday. This currency pair has since retraced higher to hover around 153.90 but overhead pressures remain.

What does it mean for the Europe & US sessions?

After easing on a monthly and annualised basis in May, the PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – is expected to post a slightly stronger monthly gain in prices for the month of June. However, should PCE prices also moderate lower as per the latest CPI results two weeks ago, it will likely trigger a strong sell-off in the greenback later today.

The Dollar Index (DXY)

Key news events today

PCE Price Index (12:30 pm GMT)

What can we expect from DXY today?

After easing on a monthly and annualised basis in May, the PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – is expected to post a slightly stronger monthly gain in prices for the month of June. However, should PCE prices also moderate lower as per the latest CPI results two weeks ago, it will likely trigger a strong sell-off in the greenback later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

PCE Price Index (12:30 pm GMT)

What can we expect from Gold today?

After easing on a monthly and annualised basis in May, the PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – is expected to post a slightly stronger monthly gain in prices for the month of June. However, should PCE prices also moderate lower as per the latest CPI results two weeks ago, it will likely trigger a strong sell-off in the greenback later today – a move that should spur this precious metal.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie has shed 3.5% over the last couple of weeks as it dived from 0.6783 in mid-July to as low as 0.6514 overnight before retracing higher. This currency pair was trading around 0.6550 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6465

Resistance: 0.6580

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Significant weakness in the Kiwi has caused it to decline nearly 4.3% over the past three weeks. This currency pair hit a low of 0.5882 overnight before stabilizing around this level. Overhead pressures remain and further downside can be expected for the Kiwi – these are the support and resistance levels for today.

Support: 0.5875

Resistance: 0.5950

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

Tokyo Core CPI (11:30 pm GMT 25th July)

What can we expect from JPY today?

Tokyo’s core CPI has now accelerated for the third consecutive month as it jumped from 1.6% in April to 2.2% YoY in July. Inflationary pressures are building and it could pave the way for the Bank of Japan (BoJ) to move ahead with a rate hike at next week’s monetary policy announcement. The yen has gained nearly 4.3% over the past three weeks as USD/JPY fell under 152.50 yesterday. This currency pair has since retraced higher to hover around 153.90 but overhead pressures remain.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The German ifo Business Climate deteriorated further in July as it fell from 88.9 in the previous month to 87.0 as the German economy remains in the doldrums. Business sentiment for all the major sectors such as services, trade and construction declined – with the manufacturing sector falling significantly more than the others. The Euro pulled back to a low of 1.0825 yesterday before ranging between this lower bound and 1.0865 overnight – these are the support and resistance levels for today.

Support: 1.0810

Resistance: 1.0895

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the greenback waned overnight as USD/CHF briefly dipped under the threshold of 0.8800 before retracing higher by the end of the U.S. session. This currency pair was trading around 0.8810 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8780

Resistance: 0.8880

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable has drifted lower this week before finally dropping below the threshold of 1.2900 overnight. This currency pair was trading around 1.2860 as Asian markets came online and is expected to edge lower as the day progresses – these are the support and resistance levels for today.

Support: 1.2780

Resistance: 1.2940

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Recent weakness in the Loonie has propelled USD/CAD higher as it rose from 1.3600 to an overnight high of 1.3850. However, this currency pair retreated away from this level and was trading around 1.3810 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.3780

Resistance: 1.3850

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.50% while continuing its policy of balance sheet normalization.
• Canada’s economic growth likely picked up to about 1.5% through the first half of this year and is forecasted to increase in the second half of 2024 and through 2025.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026, reflecting stronger exports and a recovery in household spending and business investment as borrowing costs ease.
• CPI inflation moderated to 2.7% in June after increasing in May as broad inflationary pressures eased.
• The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm but shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.
• These preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025 and CPI inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.
• There are signs of slack in the labour market with the unemployment rate rising to 6.4%, as employment continues to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderation, but remains elevated.
• The Governing Council’s future monetary policy decisions will be guided by incoming information and assessment of their implications for the inflation outlook.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 4 September 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Stronger-than-anticipated GDP output in the U.S. for the second quarter of this year triggered a massive demand for crude oil – the advance estimate showed the American economy rebounding strongly from 1.4% in Q1-24 to 2.8% YoY. WTI oil was hovering $77.50 per barrel before spiking as high as $79.70 – strong tailwinds remain in place and this commodity is likely to climb higher as the day progresses. However, crude prices look set to notch a third straight week of decline.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Europe Fundamental Forecast | 26 July 2024 first appeared on IC Markets | Official Blog.

The bounce today comes as the overall risk mood in markets is also searching for a bit of a respite. S&P 500 futures are now up 0.5%, as equities look to a calmer end to the week. At the same time, AUD/USD is also staving off a drop below the 61.8 Fib retracement level at 0.6529 for now.

In the bigger picture, sellers remain in control and this is just a minor relief thus far. It will take a lot more on the part of buyers to convince of a turnaround in the recent selling pressure. That will also have to come alongside a better showing in risk trades in broader markets.

The near-term chart lays out the challenge for buyers as well, with the 100-hour moving average only seen at 0.6599. That is seen closer to the range of the key moving averages on the daily chart above, seen at the 0.6586-05 region. As such, keep below that and sellers will stay firmly in control of the pair.

That is the limiting scope for any rebound we’ll be seeing in the near-term. So, the onus is on buyers to break back above that in order to reestablish some semblance of control.

This article was written by Justin Low at www.forexlive.com.

IC Markets Asia Fundamental Forecast | 26 July 2024

What happened in the U.S. session?

The advance estimate for second quarter GDP beat market forecasts of 2.0% with a reading of 2.8% as consumer spending grew due to a rebound in goods consumption along with an increase in wholesale trade and retail trade industries. In addition, non-residential investment accelerated while defence government spending also grew. After slowing quite significantly from 3.4% in Q4-23 to 1.4% in Q1-24, economic growth appears to have bounced back in the second quarter of this year.

Meanwhile, unemployment claims printed slightly lower than its estimate of 237K with a reading of 235K. However, this figure remains elevated and continues to trend in line with its 4-week average of 234.5K, suggesting a potential weakness in the labour market. The dollar index (DXY) was trading around 104.20 prior to the release of these economic data points but it experienced wild swings overnight – surging as high as 104.45 before reversing sharply to drop as low as 104.17. This index finally stabilized around 104.35 by the end of this session.

What does it mean for the Asia Session?

Tokyo’s core CPI has now accelerated for the third consecutive month as it jumped from 1.6% in April to 2.2% YoY in July. Inflationary pressures are building and it could pave the way for the Bank of Japan (BoJ) to move ahead with a rate hike at next week’s monetary policy announcement. The yen has gained nearly 4.3% over the past three weeks as USD/JPY fell under 152.50 yesterday. This currency pair has since retraced higher to hover around 153.90 but overhead pressures remain.

The Dollar Index (DXY)

Key news events today

PCE Price Index (12:30 pm GMT)

What can we expect from DXY today?

After easing on a monthly and annualised basis in May, the PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – is expected to post a slightly stronger monthly gain in prices for the month of June. However, should PCE prices also moderate lower as per the latest CPI results two weeks ago, it will likely trigger a strong sell-off in the greenback later today.

Central Bank Notes:

• The Federal Funds Rate target range remained unchanged at 5.25% to 5.50% for the seventh meeting in a row.
• The Committee seeks to achieve maximum employment and inflation at the rate of 2% over the longer run and judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year.
• The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks. Inflation has eased over the past year but remains elevated and in recent months, there has been modest further progress toward the Committee’s 2% inflation objective.
• Recent indicators suggest that economic activity has continued to expand at a solid pace while job gains have remained strong, and the unemployment rate has remained low.
• In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks and does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%.
• In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook and would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals.
• In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities. Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion.
• The Committee will maintain the monthly redemption cap on agency debt and agency mortgage-backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities.
• Next meeting runs from 30 to 31 July 2024.

Next 24 Hours Bias

Weak Bearish

Gold (XAU)

Key news events today

PCE Price Index (12:30 pm GMT)

What can we expect from Gold today?

After easing on a monthly and annualised basis in May, the PCE Price Index – which is the Federal Reserve’s preferred gauge of inflation – is expected to post a slightly stronger monthly gain in prices for the month of June. However, should PCE prices also moderate lower as per the latest CPI results two weeks ago, it will likely trigger a strong sell-off in the greenback later today – a move that should spur this precious metal.

Next 24 Hours Bias

Medium Bearish

The Australian Dollar (AUD)

Key news events today

No major news events.

What can we expect from AUD today?

The Aussie has shed 3.5% over the last couple of weeks as it dived from 0.6783 in mid-July to as low as 0.6514 overnight before retracing higher. This currency pair was trading around 0.6550 as Asian markets came online – these are the support and resistance levels for today.

Support: 0.6465

Resistance: 0.6580

Central Bank Notes:

• The RBA kept the cash rate target unchanged at 4.35%, marking the ninth pause out of the last ten board meetings.
• Over the year to April, the monthly CPI indicator rose by 3.6% in headline terms, and by 4.1% excluding volatile items and holiday travel, which was similar to its pace in December 2023.
• The central forecasts published in May were for inflation to return to the target range of 2–3% in the second half of 2025 and to the midpoint in 2026 while there have been indications that momentum in economic activity is weak, including slow growth in GDP, a rise in the unemployment rate and slower-than-expected wages growth.
• Inflation is easing but has been doing so more slowly than previously expected and it remains high and the Board expects that it will be some time yet before inflation is sustainably in the target range.
• The path of interest rates that will best ensure that inflation returns to target in a reasonable timeframe remains uncertain and the Board is not ruling anything in or out.
• Next meeting is on 6 August 2024.

Next 24 Hours Bias

Weak Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news events.

What can we expect from NZD today?

Significant weakness in the Kiwi has caused it to decline nearly 4.3% over the past three weeks. This currency pair hit a low of 0.5882 overnight before stabilizing around this level. Overhead pressures remain and further downside can be expected for the Kiwi – these are the support and resistance levels for today.

Support: 0.5875

Resistance: 0.5950

Central Bank Notes:

• The Monetary Policy Committee kept the OCR unchanged at 5.50% for the eighth meeting in a row and agreed that restrictive monetary policy is reducing domestic demand and consumer price inflation.
• The Committee is confident that inflation will return to within its 1-3% target range over the second half of 2024.
• The decline in inflation reflects receding domestic pricing pressures, as well as lower inflation for goods and services imported into New Zealand while recent monthly Selected Price Indexes suggest weakening in some of the more volatile inflation components, while survey measures of cost pressures and pricing intentions have continued to decline.
• Non-performing bank loans and corporate insolvencies have increased from low levels in line with declining economic activity while bank credit growth also remains very subdued, in line with weakness in the domestic economy and low business and consumer confidence.
• Next meeting is on 14 August 2024.

Next 24 Hours Bias

Weak Bullish

The Japanese Yen (JPY)

Key news events today

Tokyo Core CPI (11:30 pm GMT 25th July)

What can we expect from JPY today?

Tokyo’s core CPI has now accelerated for the third consecutive month as it jumped from 1.6% in April to 2.2% YoY in July. Inflationary pressures are building and it could pave the way for the Bank of Japan (BoJ) to move ahead with a rate hike at next week’s monetary policy announcement. The yen has gained nearly 4.3% over the past three weeks as USD/JPY fell under 152.50 yesterday. This currency pair has since retraced higher to hover around 153.90 but overhead pressures remain.

Central Bank Notes:

• The Bank considers that the policy framework of Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control and the negative interest rate policy to date have fulfilled their roles. With the price stability target of 2%, it will conduct monetary policy as appropriate, guiding the short-term interest rate as a primary policy tool.
• The Bank of Japan decided on the following measures:
  1. The Bank will encourage the uncollateralized overnight call rate to remain at around 0 to 0.1% while continuing its Japanese government bonds (JGB) purchases in accordance with the decisions made at the March 2024 MPM.
  2. The Bank decided, by an 8-1 majority vote, that it would reduce its purchase amount of JGBs thereafter to ensure that long-term interest rates would be formed more freely in financial markets.
• Underlying CPI inflation is expected to increase gradually, since it is projected that the output gap will improve and that medium- to long-term inflation expectations will rise with a virtuous cycle between wages and prices continuing to intensify.
• In the second half of the projection period of the April 2024 Outlook for Economic Activity and Prices (Outlook Report), it is likely to be at a level that is generally consistent with the price stability target of 2%.
• The year-on-year rate of increase in the CPI (all items less fresh food), has been in the range of 2.0-2.5% recently, as services prices have continued to rise moderately, reflecting factors such as wage increases, although the effects of a pass-through to consumer prices of cost increases led by the past rise in import prices have waned. Inflation expectations have risen moderately.
• Japan’s economy has recovered moderately, although some weakness has been seen in part while is likely to keep growing at a pace above its potential growth rate, with overseas economies continuing to grow moderately and as a virtuous cycle from income to spending gradually intensifies against the background of factors such as accommodative financial conditions.
• Next meeting is on 31 July 2024.

Next 24 Hours Bias

Weak Bearish

The Euro (EUR)

Key news events today

No major news events.

What can we expect from EUR today?

The German ifo Business Climate deteriorated further in July as it fell from 88.9 in the previous month to 87.0 as the German economy remains in the doldrums. Business sentiment for all the major sectors such as services, trade and construction declined – with the manufacturing sector falling significantly more than the others. The Euro pulled back to a low of 1.0825 yesterday before ranging between this lower bound and 1.0865 overnight – these are the support and resistance levels for today.

Support: 1.0810

Resistance: 1.0895

Central Bank Notes:

• The Governing Council today decided to keep the three key ECB interest rates unchanged in July, following a 25 basis points cut in June.
• Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.25%, 4.50% and 3.75% respectively.
• Monetary policy is keeping financing conditions restrictive but at the same time, domestic price pressures are still high, services inflation is elevated and headline inflation is likely to remain above the target well into next year.
• While some measures of underlying inflation ticked up in May owing to one-off factors, most measures were either stable or edged down in June.
• The incoming information indicates that the euro area economy grew in the second quarter, but likely at a slower pace than in the first quarter.
• Services continue to lead the recovery, while industrial production and goods exports have been weak – investment indicators point to muted growth in 2024, amid heightened uncertainty.
• The Eurosystem no longer reinvests all of the principal payments from maturing securities purchased under the pandemic emergency purchase programme (PEPP), reducing the PEPP portfolio by €7.5 billion per month on average and the Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.
• The Council is determined to ensure that inflation returns to its 2% medium-term target in a timely manner and will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim and is not pre-committing to a particular rate path.
• Next meeting is on 12 September 2024.

Next 24 Hours Bias

Weak Bullish

The Swiss Franc (CHF)

Key news events today

No major news events.

What can we expect from CHF today?

Demand for the greenback waned overnight as USD/CHF briefly dipped under the threshold of 0.8800 before retracing higher by the end of the U.S. session. This currency pair was trading around 0.8810 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 0.8780

Resistance: 0.8880

Central Bank Notes:

• The SNB eased monetary policy by lowering its key policy rate by 25 basis points for the second consecutive meeting, going from 1.50% to 1.25% in June.
• The underlying inflationary pressure has decreased again compared to the previous quarter but inflation had risen slightly since the last monetary policy assessment, and stood at 1.4% in May.
• The inflation forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026, based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon.
• Swiss GDP growth was moderate in the first quarter of 2024 with the services sector continuing to expand, while manufacturing stagnated.
• Growth is likely to remain moderate in Switzerland in the coming quarters as the SNB anticipates GDP growth of around 1% this year while currently expecting growth of around 1.5% for 2025.
• Next meeting is on 26 September 2024.

Next 24 Hours Bias

Weak Bearish

The Pound (GBP)

Key news events today

No major news events.

What can we expect from GBP today?

Cable has drifted lower this week before finally dropping below the threshold of 1.2900 overnight. This currency pair was trading around 1.2860 as Asian markets came online and is expected to edge lower as the day progresses – these are the support and resistance levels for today.

Support: 1.2780

Resistance: 1.2940

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) voted by a majority of 7-to-2 to maintain its Official Bank Rate at 5.25% for the seventh consecutive meeting.
• Two members preferred to reduce the Bank Rate by 25 basis points to 5%, an increase of one from the previous meeting.
• Twelve-month CPI inflation fell to 2.0% in May from 3.2% in March, close to the May Monetary Policy Report projection. CPI inflation is expected to rise slightly in the second half of this year, as declines in energy prices last year fall out of the annual comparison.
• Reflecting a margin of slack in the economy, CPI inflation had been projected to be 1.9% in two years’ time and 1.6% in three years.
• UK GDP appears to have grown more strongly than expected during the first half of this year. Business surveys, however, remain consistent with a slower pace of underlying growth, of around 0.25% per quarter.
• UK real GDP had increased by 0.6% in 2024 Q1, 0.2% stronger than had been expected in the May Monetary Policy Report and Bank staff now expect GDP growth of 0.5% in 2024 Q2 as a whole, stronger than the 0.2% rate that had been incorporated in the May Report.
• The MPC remains prepared to adjust monetary policy as warranted by economic data to return inflation to the 2% target sustainably. It will therefore continue to monitor closely indications of persistent inflationary pressures and resilience in the economy as a whole, including a range of measures of the underlying tightness of labour market conditions, wage growth and services price inflation.
• Next meeting is on 1 August 2024.

Next 24 Hours Bias

Weak Bullish

The Canadian Dollar (CAD)

Key news events today

No major news events.

What can we expect from CAD today?

Recent weakness in the Loonie has propelled USD/CAD higher as it rose from 1.3600 to an overnight high of 1.3850. However, this currency pair retreated away from this level and was trading around 1.3810 at the beginning of the Asia session – these are the support and resistance levels for today.

Support: 1.3780

Resistance: 1.3850

Central Bank Notes:

• The Bank of Canada reduced its target for the overnight rate by 25 basis points to 4.50% while continuing its policy of balance sheet normalization.
• Canada’s economic growth likely picked up to about 1.5% through the first half of this year and is forecasted to increase in the second half of 2024 and through 2025.
• Overall, the Bank forecasts GDP growth of 1.2% in 2024, 2.1% in 2025, and 2.4% in 2026, reflecting stronger exports and a recovery in household spending and business investment as borrowing costs ease.
• CPI inflation moderated to 2.7% in June after increasing in May as broad inflationary pressures eased.
• The Bank’s preferred measures of core inflation have been below 3% for several months and the breadth of price increases across components of the CPI is now near its historical norm but shelter price inflation remains high, driven by rent and mortgage interest costs, and is still the biggest contributor to total inflation.
• These preferred measures of core inflation are expected to slow to about 2.5% in the second half of 2024 and ease gradually through 2025 and CPI inflation is expected to come down below core inflation in the second half of this year, largely because of base year effects on gasoline prices.
• There are signs of slack in the labour market with the unemployment rate rising to 6.4%, as employment continues to grow more slowly than the labour force and job seekers taking longer to find work. Wage growth is showing some signs of moderation, but remains elevated.
• The Governing Council’s future monetary policy decisions will be guided by incoming information and assessment of their implications for the inflation outlook.
• Recent data has increased the council’s confidence that inflation will continue to move towards the 2% target. Nonetheless, risks to the inflation outlook remain.
• Next meeting is on 4 September 2024.

Next 24 Hours Bias

Weak Bearish

Oil

Key news events today

No major news events.

What can we expect from Oil today?

Stronger-than-anticipated GDP output in the U.S. for the second quarter of this year triggered a massive demand for crude oil – the advance estimate showed the American economy rebounding strongly from 1.4% in Q1-24 to 2.8% YoY. WTI oil was hovering $77.50 per barrel before spiking as high as $79.70 – strong tailwinds remain in place and this commodity is likely to climb higher as the day progresses. However, crude prices look set to notch a third straight week of decline.

Next 24 Hours Bias

Weak Bullish

The post IC Markets Asia Fundamental Forecast | 26 July 2024 first appeared on IC Markets | Official Blog.

The low yesterday touched 151.93 and that resonated with the May low before catching a bounce. The drive lower fell short of testing the 200-day moving average (blue line), seen at 151.58 currently. But still, sellers are in control with price having dropped by 4.5% already in July trading.

The pair might be slightly calmer for now but don’t let that deceive you. Price action is very much still susceptible to volatile swings on the day, especially with the risk mood in a vulnerable spot and with the US PCE price index coming up.

S&P 500 futures are up 0.4% at the moment but the index itself is down nearly 2% already on the week. So, the minor bounce here is just a bit part reprieve.

Going back to USD/JPY, the focus now turns towards the BOJ policy meeting next week. Sellers still have scope to push the downside momentum to the 200-day moving average noted above. But I fear dip buyers will feel more confident once we get over the BOJ hump in the week ahead.

Despite the potential rate hike surprise by the BOJ, I reckon we’ll see a sell the fact trade in the yen regardless once the dust settles. So, keep an eye out for that.

This article was written by Justin Low at www.forexlive.com.

The post Ex-Dividend 26/07/2024 first appeared on IC Markets | Official Blog.

DXY (US Dollar Index):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish continuation towards 1st support.

Pivot: 104.47
Supporting reasons: Identified as a pullback resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 103.70
Supporting reasons: Identified as a multi-swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 105.16
Supporting reasons: Identified as an overlap resistance level, indicating a potential area where sellers could enter the market after a retracement.

EUR/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish continuation towards 1st support.

Pivot: 1.0876
Supporting reasons: Identified as a pullback resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 1.0816
Supporting reasons: Identified as an overlap support level, specifically at the 50% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 1.0921
Supporting reasons: Identified as a pullback resistance level, specifically at the 78.60% Fibonacci Retracement, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish continuation towards 1st support.

Pivot: 167.35
Supporting reasons: Identified as an overlap resistance level, specifically at the 23.60% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 163.99
Supporting reasons: Identified as a swing low support level, suggesting a significant area where previous declines have found support.

1st resistance: 169.96
Supporting reasons: Identified as a pullback resistance level, specifically at the 50% Fibonacci Retracement, indicating a historical point where previous rallies have faced selling pressure or reversed.

EUR/GBP:

Potential Direction: Bullish
Overall momentum of the chart: Bullish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 0.8435
Supporting reasons: Identified as a pullback support level, indicating a potential area where buyers could enter the market after a retracement.

1st support: 0.8499
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8476
Supporting reasons: Identified as an overlap resistance level, specifically at the 78.60% Fibonacci Retracement, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/USD:

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price could potentially make a bullish bounce off pivot and head towards 1st resistance.

Pivot: 1.2854
Supporting reasons: Identified as a pullback support level, specifically at the 61.80% Fibonacci Projection, indicating a potential area where buyers could enter the market after a retracement.

1st support: 1.2778
Supporting reasons: Identified as an overlap support level, specifically at the 61.80% Fibonacci Retracement, suggesting a significant area where previous declines have found support.

1st resistance: 1.2934
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

GBP/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 200.66
Supporting reasons: Identified as a pullback resistance level, specifically at the 38.20% Fibonacci Retracement, indicating a potential area where sellers could enter the market after a retracement.

1st support: 196.61
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 202.52
Supporting reasons: Identified as a pullback resistance level, specifically at the 50% Fibonacci Retracement, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CHF:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 0.8836
Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 0.8755
Supporting reasons: Identified as a pullback support level, suggesting a significant area where previous declines have found support.

1st resistance: 0.8917
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/JPY:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Factors contributing to the momentum: Price is below the bearish Ichimoku cloud.

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 154.74
Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 151.92
Supporting reasons: Identified as an overlap support level, suggesting a significant area where previous declines have found support.

1st resistance: 155.80
Supporting reasons: Identified as a pullback resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

USD/CAD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

Price has made a bearish reversal off the pivot and could potentially make a pull back towards the 1st support.

Pivot: 1.3832
Supporting reasons: Identified as a multi-swing-high resistance, indicating a significant area where selling pressures could intensify.

1st support: 1.3779
Supporting reasons: Identified as an overlap support that aligns close to a 23.6% Fibonacci retracement, indicating a potential area where price could find support.

1st resistance: 1.3888
Supporting reasons: Identified as a swing-high resistance, indicating a potential area that could halt any further upward movement.

AUD/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 0.6562
Supporting reasons: Identified as an overlap resistance, indicating a potential area where selling pressures could intensify. The presence of a bearish Ichimoku cloud adds further significance to the downside momentum.

1st support: 0.6529
Supporting reasons: Identified as a pullback support that aligns with a 161.8% Fibonacci extension level, suggesting a potential area where price could find strong support.

1st resistance: 0.6585
Supporting reasons: Identified as a pullback resistance that aligns close to a 23.6% Fibonacci retracement, indicating a significant area that could halt further upward movement.

NZD/USD

Potential Direction: Bullish
Overall momentum of the chart: Bearish

Price is trading close to the pivot and could potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 0.5883
Supporting reasons: Identified as a multi-swing-low support, indicating a potential zone where buying interests could pick up to stage a minor rebound.

1st support: 0.5779
Supporting reasons: Identified as a pullback support that aligns with a 127.2% Fibonacci extension, suggesting a significant area that could halt further downward momentum.

1st resistance: 0.5948
Supporting reasons: Identified as a pullback resistance, indicating a significant area that could halt further upward movement. The presence of a bearish Ichimoku cloud adds further significance to the overhead pressures.

US30 (DJIA):

Potential Direction: Bullish

Overall Momentum of the Chart: Bearish

Price could fall towards the pivot and potentially make a bullish bounce off this level to rise towards the 1st resistance.

Pivot: 39,607.55
Supporting reasons: Identified as an overlap support that aligns with a 78.6% Fibonacci retracement level, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st Support: 38,980.78

Supporting Reasons: Identified as a pullback support, suggesting a significant area where price could find strong support.

1st Resistance: 40,4677.11

Supporting Reasons: Identified as a pullback resistance that aligns close to a 38.2% Fibonacci retracement level, indicating a significant area that could halt further upward movement.

DE40 (DAX):

Potential Direction: Bearish

Overall Momentum of the Chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 18,353.80
Supporting reasons: Identified as a pullback resistance that aligns close to a 50% Fibonacci retracement level, indicating an area where selling pressures could intensify to resume the downtrend. The presence of a bearish Ichimoku cloud adds further significance to the overhead pressures.

1st Support: 18,149.30

Supporting Reasons: Identified as a multi-swing-low support, indicating a significant area where price could find strong support.

1st Resistance: 18,505.94

Supporting Reasons: Identified as an overlap resistance that aligns close to a 78.6% Fibonacci projection level, indicating a significant area that could halt further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Bearish

Price has made a bullish bounce off the pivot and could potentially rise towards the 1st resistance.

Pivot: 5,408.81
Supporting reasons: Identified as a pullback support, indicating a potential area where buying interests could pick up to stage a minor rebound.

1st support: 5,339.76

Supporting reasons: Identified as an overlap support, indicating a potential area where price could find strong support. 

1st resistance: 5,503.91

Supporting reasons: Identified as an overlap resistance that aligns with a 38.2% Fibonacci retracement level, suggesting a critical area that could halt further upward movement. The presence of a bearish Ichimoku cloud adds further significance to the overhead pressures.

BTC/USD (Bitcoin):

Potential Direction: Bearish

Overall momentum of the chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to pull back towards the 1st support.

Pivot: 68,388.29

Supporting reasons: Identified as a pullback resistance, indicating a potential area where selling pressures could intensify.

1st support: 63,507.86

Supporting reasons: Identified as a pullback support that aligns close to a 38.2% Fibonacci retracement level, indicating a significant area that could halt further downward movement.

1st resistance: 70,168.65

Supporting reasons: Identified as a pullback resistance that aligns with a 161.8% Fibonacci extension level, indicating a potential barrier that could halt further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bearish

Overall momentum of the chart: Bearish

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 3,276.36

Supporting reasons: Identified as a pullback resistance that aligns with a 38.2% Fibonacci retracement level, indicating a potential area where selling pressures could intensify.

1st Support: 3,052.53

Supporting Reasons: Identified as an overlap support that aligns close to a 61.8% Fibonacci retracement level, indicating a significant area that could halt further downward movement.

1st Resistance: 3,377.15

Supporting Reasons: Identified as a pullback resistance that aligns with a 61.8% Fibonacci retracement level, indicating a historical barrier where selling pressures could intensify.

WTI/USD (Oil):

Potential Direction: Bearish

Overall Momentum of the Chart: Neutral

Price is rising towards the pivot and could potentially make a bearish reversal off this level to fall towards the 1st support.

Pivot: 80.95

Supporting Reasons: Identified as an overlap resistance that aligns close to a 50% Fibonacci retracement level, indicating a potential area where selling pressures could intensify. The presence of a bearish Ichimoku cloud adds further significance to the overhead pressures.

1st Support: 77.53

Supporting Reasons: Identified as a pullback support that aligns with a 61.8% Fibonacci retracement level, indicating a significant area where price could find strong support.

1st Resistance: 83.78

Supporting Reasons: Identified as a multi-swing-high resistance, indicating a potential barrier that could halt further upward movement.

XAU/USD (GOLD):

Potential Direction: Bearish
Overall momentum of the chart: Bearish

Price could potentially make a bearish reaction off pivot and drop to 1st support.

Pivot: 2391.29
Supporting reasons: Identified as a pullback resistance level, indicating a potential area where sellers could enter the market after a retracement.

1st support: 2361.72
Supporting reasons: Identified as an overlap support level, specifically at the 161.80% Fibonacci Extension and 78.60% Fibonacci Retracement, indicating Fibonacci confluence and suggesting a significant area where previous declines have found support.

1st resistance: 2423.81
Supporting reasons: Identified as an overlap resistance level, indicating a historical point where previous rallies have faced selling pressure or reversed.

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The post Friday 26th July 2024: Technical Outlook and Review first appeared on IC Markets | Official Blog.

The changes among dollar pairs are relatively light, with USD/JPY continuing to stay in focus amid the volatility and swings. The pair dipped towards 152.00 in trading yesterday before recovering back to 153.70-80 levels currently. There were some light swings in Asia and one can expect more before the close today.

In terms of data, there won’t be much in Europe to shake up market sentiment. All eyes instead will turn towards the US PCE price index later in the day.

Besides that, investors will stay fixated on how equities are going to fare once more. There was much volatility in Wall Street yesterday but tech shares ended up worse off once again. On the week itself, the S&P 500 is down nearly 2% and the Nasdaq down a little over 3%. Both are eyeing a potential push towards their respective 100-day moving averages.

In the meantime, we are likely be in store for a more pensive session in Europe today. There’s only one minor release on the agenda as seen below.

0645 GMT – France July consumer confidence

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

This article was written by Justin Low at www.forexlive.com.