In this video, I take a technical look at the major currency pairs vs the USD. As a bonus, I also take a look at the 2 major stock indices as traders prepare for the new week.

Including (along with the time on the video):

• EURUSD 0:15
• USDJPY 2:15
• GBPUSD 3:38
• USDCHF 5:25
• USDCAD 6:37
• AUDUSD 7:47
• NZDUSD 9:18
• S&P 10:21
• NASDAQ 11:39

I not only show the key levels for the new trading week, but also explain why they are so important for traders.

Kickstart the new trading week by understanding the roadmap for the new trading week. It is that simple.

This article was written by Greg Michalowski at www.forexlive.com.

• How reflexive is the economy to the stock market?
• What will be the main earnings releases for the week starting August 5
• Goolsbee: If inflation and the job market continue cool, the Fed should cut
• Kamala Harris crosses threshold to become Democratic nominee
• Baker Hughes US oil rig count unchanged
• Fed’s Goolsbee: The job of a central bank is to move in a steady way
• Fed’s Goolsbee and Barkin set to speak on TV
• Fed’s Barkin not ready to embrace 50 bps cut debate, says +114K jobs is ‚reasonable‘
• JPMorgan joins the 50 basis point cut call
• Citigroup forecasts 50 basis point cuts in September and November
• Goldman Sachs now sees three consecutive Fed rate cuts this year
• US June factory orders -3.3% vs -2.9% expected
• Kickstart the FX trading day for Aug 2 w/a technical look at the EURUSD, USDJPY & GBPUSD
• US July non-farm payrolls +114K vs +175K expected
• The JPY is the strongest and the GBP is the weakest as the NA session begins
• ForexLive European FX news wrap: Risk selloff holds ahead of US jobs report

Coming off some eye-opening earnings/revenue numbers from Amazon after the close (lower revenues and rumblings of a slower consumer), and a day yesterday where there was a string of bad news, the markets got another dose of „weak“ today in the US jobs report.

The July 2024 US non-farm payrolls report revealed an increase of only 114,000 jobs, significantly below the expected 175,000. The previous month’s figure was revised down from 206,000 to 179,000. The unemployment rate rose to 4.3% from the expected 4.1%, with the unrounded rate at 4.252%. The labor force participation rate slightly increased to 62.7%, and the U6 underemployment rate rose to 7.8% from 7.4%. Average hourly earnings grew by a lower 0.2% month-over-month, falling short of the 0.3% expectation, and increased by 3.6% year-over-year. Average weekly hours decreased to 34.2 from the anticipated 34.3. Private payrolls saw a rise of 97,000, below the expected 148,000, while manufacturing payrolls grew by 1,000, against the forecasted decline of 1,000. The household survey reported an increase of 67,000 jobs, and government jobs rose by 17,000.

Sector-wise, health care continued to add jobs (+55,000), while the information sector lost -20,000 jobs. Government employment showed little change after previous significant gains. Despite Hurricane Beryl, there was no discernible effect on national employment and unemployment data, though temporary layoffs increased by 249,000 to 1.1 million. This could indicate that the rise in unemployment might not be as severe as it appears.

The weaker data, gave the bond traders the go-ahead to do what the Fed did not do this week when the chose to keep rates unchanged (but left the door open for a September cut)

Following the report,

• US 2-year yields fell from 4.11% to a low of 3.845%. The current yield is 3.881%, down -28.3 basis points. For the week the 2 year is down -50 basis points. That was the largest 1-week decline since March 2023
• US 10 year yield fell from 3.941% % to a low intraday of 3.787%. The current yield is at 3.797%. For the week, the 10 year yield is down -39.4 basis points. That is the largest 1-week decline since July 2011 when yields fell -54 basis points.
• US 30-year yield fell from 4.24% to a low of 4.10%. For the week, the yield is down -33.9 basis points for the week.

The 10 year yield is now down -95.2 basis points from its high during the week of April 22. US mortgage rates, reached a peak in April at 7.22%. The rate on August 1 was 6.73% down -49 basis points. What will it be after the -18 basis point decline in the 10 year yield today?

The debt market is doing the Fed’s work for them, what has the market now priced in?

At the start of the day, there was a 30% chance for 50 basis points at the September meeting. Now the market is pricing in an 80% chance for 50 basis points. The expected cuts by January 5th is 5 cuts or 127 basis points of cuts. By June 2025, the market is pricing in 8 cuts or -242 basis point cut.

Meanwhile, not only is the job growth slowing but the stock market decline is taking money out of consumers pockets. The US major indices had another rough day with the:

• Dow Industrial Average falling -1.51%. For the week the index fell -2.10%.
• S&P index-1.84%, and for the week -2.06%
• NASDAQ index fell -2.43%, and for the week -3.35%. The last three weeks have seen the Nozick index for -3.65% -2.08%, and -3.35%.
• Small-cap Russell 2000 fell -3.52% in -6.67% for the week

Amazon shares fell -8.78%, Google fell -2.40%, Microsoft fell -2.07%, Nvidia fell -1.78%. Apple but the trend with a gain of 0.69% after better-than-expected earnings after the close yesterday

In the forex market today, the USD is ending as the weakest of the major currencies with the USDJPY falling -1.88% and the USDCHF falling 1.58%. The USD also lost -1.12% vs the EUR and -0.55% vs the GBP.

The JPY and the CHF were the strongest of the major currencies as the flow of funds moved into those „safe haven“ currencies.

For a technical look at the major currency pairs vs the USD see the weekend video below where I take a look at all the major currencies from a technical perspective and a bonus technical look at the S&P and the Nasdaq after their sharpl declines today/this week:

Thank you for your support. Wishing you a happy and safe weekend.

This article was written by Greg Michalowski at www.forexlive.com.

It was a wild week in stock markets as a huge post-FOMC jump turned into a crash lower. The Nasdaq is now down 10% from the highs, matching the mark for a technical correction.

On the day:

• S&P 500 -1.8%
• Nasdaq -2.4%
• DJIA -1.5%
• Russell 2000 -3.6%

On the week:

• S&P 500 -2.1%
• Nasdaq -3.3%
• DJIA -2.1%
• Russell 2000 -6.7%

If there is a silver lining, it’s that there was some moderate late-day buying and stocks finished off the lows.

This article was written by Adam Button at www.forexlive.com.

This is a good spot for a bounce in many things.

There are many times when the strong hands in the market would step in here; the economy isn’t that bad, there’s no financial crisis and companies are still making money. Yes, the Fed is behind the curve but they have more ammunition than they’ve had this century.

There are a few reasons that’s a tough trade to make right now:

1. Year-to-date gains have been great. Most assets are up meaningfully this year and fund managers are sitting on +15% gains. Do you really want to risk that in August? You can buy a five-month t-bill and tease out another 2% from the sidelines, then re-assess in early 2025.
2. Liquidity is hard to come by. I think this is increasingly a problem. There is so much algo trading, leverage and crowding that when the dance stops, there is no one left to buy. That’s leading to unusually large moves in the biggest stocks and in bonds.
3. Seasonals are tough in Aug/Sept. Even if you don’t want to wait out the whole year, that’s a good case to take a breather here and tune into the Olympics instead.
4. Fed pricing is aggressive. Should the Fed cut 50 bps at the next two meetings? Yes. Will they? I think the probabilities in the market are too high. The Fed will be stubborn, as comments from Barkin and Goolsbee today indicated.

All that said, I can see the case for a bounce for a few days next week as the market settles down after an emotional week but I don’t see real money chasing it for the reasons above. Watch the Nikkei closely at Monday’s open for a clearer hint.

This article was written by Adam Button at www.forexlive.com.