Fundamental
Overview

The weak US NFP report last Friday led to a key breakout in
the USDJPY pair which eventually triggered another deleveraging in the Yen
carry trades. Things got dire yesterday as the Nikkei dropped 12% overnight and
we saw a general selloff in global stock markets.

This led to risk-off flows
and at one point, the markets saw the Fed cutting rates by 136 bps by year-end
and some chances of an emergency rate cut. Although the volatility calmed down
a bit, the markets are still expecting a 50 bps cut by the Fed in September and
a total of 110 bps by year-end.

The NZD got pressured by
the risk-off sentiment but bounced back pretty quickly erasing all the losses
since last Friday. On the monetary policy front, the last RBNZ policy decision weighed on the Kiwi as the central
bank changed slightly its language to a more dovish leaning which increased the
rate cuts expectations.

Tomorrow, we get the New Zealand
Jobs report and if we get weak data, the market will likely increase the
chances of a rate cut at the upcoming meeting which at the moment stands at 35%
probability.

NZDUSD
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that NZDUSD spiked back lower to the April’s lows at 0.5850 yesterday but
eventually erased all the losses. The buyers are clearly stepping in around the
0.5850 level to position for a rally back into the 0.6050 resistance.
The sellers will need the price to break below the 0.5850 level to increase the
bearish bets into the 0.5770 level next.

NZDUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a minor resistance zone around the 0.5980 level where the
price got rejected from several times. The buyers will want to see the price breaking
higher to increase the bullish bets into the 0.6050 resistance next. The
sellers, on the other hand, will likely continue to lean on that minor
resistance with a defined risk above it to keep pushing into new lows.

NZDUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have mostly a rangebound price action with the price now trading in
the middle of the two key levels. There’s not much to do here other than
waiting for the breakouts or some catalyst. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is basically empty on the data front. The only notable economic releases
will be the New Zealand Jobs report tomorrow and the US Jobless Claims figures
on Thursday. The market will also pay close attention to Fed members’ comments
given the latest developments in the markets.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Leading financial service provider, easyMarkets,
has reported robust performance in Q2 2024, driven by high trading volumes in
Gold and Nasdaq. Gold prices increased by 20% compared to the same period last
year, attracting significant investor interest.

Predominant
Instruments and Assets

During
Q2 2024, Nasdaq
emerged as the predominant instrument attracting the highest trading volumes
among easyMarkets clients, with a 51% increase. This surge underscores its
continued relevance and appeal in the current market environment.

Main
Market Shifts: Crypto Trading Declines

With
the conclusion of the bull market came a significant 45% decrease in crypto trading volumes
compared to Q1. This shift indicates a strategic realignment by traders in
response to evolving market conditions.

Notable
Spikes and Crashes

In
Q2 2024, several instruments experienced remarkable price movements compared to
the same period last year, with a 125% surge in Cocoa,
a 20% increase in Gold
and a 6% appreciation in USDJPY.

Stable
Sector Activity and Central Bank Impact

Throughout
Q2, trading activity across sectors remained stable. Interest rate
announcements from central banks worldwide created volatility, boosting trading
volumes. However, the interest rate trajectories were largely anticipated,
resulting in no noticeable shift in market sentiment.

Expert Insight: Resilience and Adaptability

Thomas
Tsaloupis, Head of Risk Management at easyMarkets, commented on the quarter’s
performance, stating: „The second quarter of 2024 demonstrated our
clients‘ adeptness at navigating complex market environments. Despite the end
of the crypto bull market, the strategic focus on an instrument like Nasdaq
highlights their ability to adapt and capitalize on prevailing trends. Our
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As
we move into the second half of the year, easyMarkets remains committed to
providing our clients with the tools and insights needed to navigate the
evolving financial landscape successfully.

ABOUT easyMarkets

easyMarkets, founded in 2001, is an
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satisfaction.

This article was written by FL Contributors at www.forexlive.com.

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This article was written by FL Contributors at www.forexlive.com.

Here’s a snapshot of things:

• S&P 500 futures -3.0%
• Nasdaq futures -4.6%
• Dow futures -2.1%
• Russell 2000 futures -5.3%

At one point, Nasdaq futures were down over 6% so the rout in tech shares is at least not getting much worse for now. It’s a full-fledged flight to safety mode with traders chasing the usual safe havens. Bonds are bid and so is the Japanese yen and Swiss franc. Besides that, it’s pretty much a sell everything else case in broader markets to start the week.

From earlier:

• Japan’s Nikkei closes down by a whopping 12% to its lowest since November last year
• Volatility is back with a bang
• From soft landing to crash landing
• Poll: Is the Fed behind the curve on cutting interest rates?
• A reminder of the one thing that traders have been getting wrong since last year

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

The VIX has more than doubled in value today, rising to hit the 50.00 mark now. That’s the highest level since the pandemic and this is the biggest daily jump since February 2018, when there was the whole fiasco involving the XIV and a broader market selloff amid a rout in the bond market at the time.

In any case, the heightened reading we’re seeing above speaks to the fear and angst that is gripping markets right now. For a while there, it looked like we might’ve settled into a period of low volatility. The VIX had before this touch its lowest since before the pandemic as investors were feeling rather confident about broader market sentiment.

How quickly the tables have turned in just one week, eh?

Emotions are running high now and this is a testament to that. The rout in equities will stop when it stops. However, the renewed volatility means that it will at least take a while for the nerves to settle down again. As for market players, it means needing some time to regain their grit and vigour in the short-term.

That translates to a likelihood that we’ll see a more bumpy road in equities moving forward. At least definitely not the one-way traffic in the first seven months this year.

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

Fundamental
Overview

At one point it looked like the worst was behind us as the S&P 500 rallied
almost 3% on a single day following the BoJ and FOMC decisions.
Unfortunately, the following day we got an ugly US ISM Manufacturing PMI which sent the market
into risk-off and defensive positioning into the US NFP report.

The US Jobs report didn’t help as the data
surprised to the downside with unemployment jumping to a totally unexpected
4.3% rate. The losses extended and eventually we got a strong overnight selloff
today due to spillover effects as the Nikkei crashed 12% in a single day.

The market is now pricing in 125 bps of easing by year-end which translates
into a 50 bps cut in both September and November, and a 25 bps cut in December.
The market is even seeing small chances of an inter-meeting cut. Things are
moving quickly.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 broke through the major trendline around the 5435 level where we had
also the 38.2% Fibonacci retracement level for confluence. The sellers piled in more
aggressively as the buyers folded. We are now seeing a bounce on a previous
swing low level around the 5200 level.

This is where we can expect
the buyers to step in with a defined risk below the level to position for a
rally into the 5400 level. The sellers, on the other hand, will want to see the
price breaking lower to increase the bearish bets into the 5000 level next.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we got a fakeout last week when the price broke above the 5540
resistance and then dropped back below it as the US ISM Manufacturing PMI
missed expectations by a big margin. There’s not much else we can glean from
this timeframe as the buyers will just look for a bigger bounce, while the
sellers will look for a break below the 5200 level to extend the drop.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have a minor downward trendline defining the current bearish
momentum. The buyers will want to see the price breaking higher to increase the
bullish bets into the 5400 level, while the sellers will likely keep on leaning
on it to position for a break below the 5200 level. The red lines define the average daily range for today.

Upcoming
Catalysts

This week is basically empty on the data front. Today we have the US ISM Services
PMI and on Thursday we get the latest US Jobless Claims figures. The market
will also pay close attention to Fed members’ comments given the latest
developments.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -0.2%

Looking at the breakdown, there was an increase in prices for intermediate goods (+0.1%), energy (+1.6%), capital goods (+0.1%), and non-durable consumer goods (+0.1%). The price for durable consumer goods was stable on the month. If you strip out energy prices though, the prices for the total industry would’ve only reflected a 0.1% increase in June.

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

Rate cuts by year-end

• Fed: 125 bps (96% probability of 50 bps rate cut at the upcoming meeting)
• ECB: 75 bps (97% probability of rate cut at the upcoming meeting)
• BoE: 53 bps (57% probability of no change at the upcoming meeting)
• BoC: 80 bps (77% probability of rate cut at the upcoming meeting)
• RBA: 46 bps (84% probability of no change at the upcoming meeting)
• RBNZ: 63 bps (64% probability of no change at the upcoming meeting)
• SNB: 48 bps (90% probability of rate cut at the upcoming meeting)

Rate hikes by year-end

• BoJ: 3 bps (98% probability of no change at the upcoming meeting)

(This is an extraordinary update as things are moving very quickly and expectations are liable to big swings in both directions depending on the next developments)

This article was written by Giuseppe Dellamotta at www.forexlive.com.

UPCOMING
EVENTS:

• Monday: China Caixin Services PMI, Eurozone PPI, US ISM
  Services PMI, Fed’s SLOOS.
• Tuesday: Japan Average Cash Earnings, RBA Policy Decision,
  Swiss Unemployment Rate and Retail Sales, Eurozone Retail Sales, Canada
  Services PMI.
• Wednesday: New Zealand Labour Market report, BoC Minutes.
• Thursday: BoJ Summary of Opinions, US Jobless Claims.
• Friday: China CPI, Canada Labour Market report.

Monday

The US ISM
Services PMI is expected at 51.0 vs. 48.8 prior. This survey hasn’t been giving
any clear signal lately as it’s just been ranging since 2022. The latest S&P Global US Services
PMI rose to the
highest level in 28 months. The good news in the report was that “the rate of
increase of average prices charged for goods and services has slowed further, dropping
to a level consistent with the Fed’s 2% target”.

The bad news was
that “both manufacturers and service providers reported heightened
uncertainty around the election, which is dampening investment and hiring. In
terms of inflation, the July survey saw input costs rise at an increased rate,
linked to rising raw material, shipping and labour costs. These higher costs
could feed through to higher selling prices if sustained or cause a squeeze
on margins.”

Tuesday

The Japanese
Average Cash Earnings Y/Y is expected at 2.3% vs. 1.9% prior. As a reminder,
the BoJ hiked interest rates by 15 bps at the last meeting and Governor Ueda
said that more rate hikes could follow if the data supports such a move.
The economic indicators they are focusing on are: wages, inflation, service
prices and the GDP gap.

The RBA is
expected to keep the Cash Rate unchanged at 4.35%. The RBA has been maintaining
a hawkish tone due to the stickiness in inflation and the market at times even priced
in high chances of a rate hike. The latest Australian Q2 CPI quelled those expectations as we saw misses across
the board and the market (of course) started to see chances of rate cuts, with now 32 bps of easing seen by year-end (the
increase on Friday was due to the soft US NFP report).

Wednesday

The New Zealand
Unemployment Rate is expected to jump to 4.7% vs. 4.3% prior with Job Growth
Q/Q seen at -0.3% vs. -0.2% prior. The Labour Cost Index Y/Y is expected at
3.5% vs. 3.8% prior, while the Q/Q measure is seen at 0.8% vs. 0.8% prior. The
labour market has been softening steadily in New Zealand and that remains
one of the main reasons why the market continues to expect rate cuts coming
much sooner than the RBNZ’s forecasts.

Thursday

The US Jobless
Claims continue to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market. This
particular release will be crucial as it lands in a very worried market after
the Friday’s soft US jobs data.

Initial Claims
remain inside the 200K-260K range created since 2022, although they’ve been
climbing towards the upper bound lately. Continuing Claims, on the other hand,
have been on a sustained rise and we saw another cycle high last week.

This week Initial
Claims are expected at 250K vs. 249K prior, while there’s no consensus for
Continuing Claims at the time of writing although the prior release saw an
increase to 1877K vs. 1844K prior.

Friday

The Canadian
Labour Market report is expected to show 25K jobs added in July vs. -1.4K prior
and the Unemployment Rate to remain unchanged at 6.4%. As a reminder, the BoC
cut interest rates to 4.50% at the last meeting and signalled further rate cuts
ahead. The market is pricing 80 bps of easing by year-end.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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.