Mixed signals move the markets

The USD found some support yesterday against its counterparts, despite some mixed signals being provided by financial data, as the weekly initial jobless claims figure dropped implying a tightening of the US employment market while on the flip side the Philly Fed business index for July failed to improve maintaining our worries for the production side of the US economy. Given the lack of high-impact financial releases stemming from the US today we expect fundamentals to take over. US stock markets also send some mixed signals as Nasdaq dropped due mostly to the Tesla and Netflix earnings reports, which disappointed traders. For today we would note the release of the earnings report of American Express (#AXP) while for the coming week we expect a shift towards high technology sector as we get the earnings releases of Microsoft (#MSFT), eBay (#EBAY), Meta Platforms (#META), Alphabet (#GOOG), Intel Corporation (#INTC) and Amazon (#AMZ) among others. North of the US border Loonie traders are expected to keep a close eye over the release of Canada’s retail sales for May and possible slowdown could weaken the CAD. Yet we note that should yesterday’s slight rise of oil prices be extended we may see some bullish tendencies for the CAD, while an improved market sentiment may also provide a boost to the commodity currency.

On a technical level, USD/CAD dropped yet was unable to clearly break the 1.3135 (S1) support line, hence moved higher and stabilised. We tend to maintain a bias for the sideways motion to be maintained for the pair yet that may alter any given moment. Should the bulls take over, we may see USD/CAD breaking the 1.3230 (R1) resistance line and aim for the 1.3335 (R2) resistance base. Should the bears take over, we may see the pair breaking the 1.3135 (S1) support line and aim for the 1.3060 (S2) support level. Across the pond, on a fundamental level, we note that the Tories seem to be losing ground against the Labour party, yet despite the issue being important on a political level, pound traders may allow for it to pass under the radar. We note that the higher-than-expected acceleration of the UK retail sales for June provided a small boost to the sterling during today’s early European session, as it showcased the ability and willingness of the average UK consumer to spend more in the UK economy.GBP/USD bounced on the 1.2845 (S1) support line yesterday. It seems that the pair’s downward motion initiated since the 18 of July has been interrupted hence we tend to switch our bearish outlook in favour of a sideways motion bias. Please note that the RSI indicator is still at relatively low levels despite rising slightly above the reading of 30. For a bearish outlook, we would require the pair to mark a lower trough than yesterday’s, thus a clear break of the 1.2845 (S1) support line would be necessary. Should a strong buying interest be expressed for the pair we may see cable clearly breaking the 1.3295 (R1) resistance line and aiming for higher grounds.

Further to the east, we note that in Turkey the central bank delivered a 250 basis points rate hike, yet may have underperformed market expectations. The release seemed to have little effect in the markets at the release yet bearish tendencies seem to grow once again for the Lira as the CBT seems to be lacking the decisiveness expected to tighten its monetary policy further, despite an allready substantial rising of the one week repo rate since the change of leadership in the bank. Across the world, we note the stalling of the cooling off of inflationary pressures in the Japanese economy for June, yet we consider this as temporary and do not expect BoJ to alter its dovish stance ahead of next week’s meeting.

금일 주요 경제뉴스

During Monday’s Asian session, we note the release of New Zealand’s trade data for June, as well as Australia’s and Japan’s preliminary PMI figures for July.