The cause pointed out by Microsoft was that there was a flawed update of CrowdStrike program that took down its systems. That has resulted in massive IT failures and outages across the globe, hindering services and businesses all around. CrowdStrike did also earlier say that they had deployed a fix to the issue while confirming that it was not a cyberattack.

In a day and age where we rely so much on programming and machine functions to go about our day, it’s a good reminder of the simpler times when a lot of the tasks were done manually. And those days were not too long ago. It’s amazing how far technology has come in the last 10-15 years. But also scary on how we have grown to be so reliant on it as well now.

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

The Nasdaq has been on the backfoot recently as the goldilocks data led to a
strong rotation into small caps stocks. Yesterday, there was general weakness
across all the indices although it wasn’t triggered by any catalyst. The
fundamentals haven’t changed, on the contrary, they strengthened the case for a
soft landing. The bearish momentum seems to be waning going into the weekend, so the technicals might
be helpful for the dip-buyers to time a possible bounce.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq is now near the trendline around the 19700 level. This is
where can expect the dip-buyers to step back in with a defined risk below the
trendline to position for a rally into a new all-time high. The sellers, on the
other hand, will want to see the price breaking lower to increase the bearish
bets into the next major trendline around the 19000 level.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good resistance zone now around the 20300 level
where we can find the confluence of the downward trendline and the
50% Fibonacci
retracement level.

If we get a bounce from the
19700 support zone, we can expect the sellers to step in around the downward
trendline to position for a break below the 19700 support with a better risk to
reward setup. The buyers, on the other hand, will want to see the price
breaking above the downward trendline and the 20300 resistance to increase the
bullish bets into new highs.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have another minor downward trendline defining the current bearish
momentum. The sellers will likely keep on leaning on it to push towards the
break below the 19700 support.

The buyers, on the other hand, will want to see
the price breaking above the trendline and the most recent lower high at 19980
to gain even more confidence and increase the bullish bets into the 20300
resistance. The red lines define the average daily range for today.

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

The Russell 2000 has been on an incredible run ever since the last US
CPI report as the index had its best 5 days streak in 24
years. The goldilocks data was the catalyst for a strong rotation from big
cap stocks into the small cap stocks, and the momentum was probably exacerbated
by hedge funds facing short squeezes on their small cap hedges as yields came
down.

More recently, we finally started to see a pullback which wasn’t triggered
by any negative catalyst, so it might be an opportunity to buy the dip as the
fundamentals strengthened the case for a soft landing.

Russell 2000
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Russell 2000 rejected a resistance
level at 2290 and started to pull back. The first support zone is around the 2170
level where we can find the confluence
of the previous swing high and the 38.2% Fibonacci
retracement level.

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

Russell 2000 Technical Analysis – 4 hour
Timeframe

On the 4 hour chart, we can
see the US CPI marked on the chart as the catalyst that triggered the huge run
into the 2290 level. There’s not much else to glean from this timeframe as the
buyers will likely be waiting around the 2170 level, while the sellers will look
for a break lower to increase the bearish bets.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price is getting closer to the support zone. If the price bounces
before reaching the support, we can expect the buyers to pile in on a break
above the most recent lower high at 2226. The red lines define the average daily range for today.

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

Copper experienced a pretty strong selloff this week with market
participants blaming the soft Chinese economic
data and the increase in inventories in most global warehouses suggesting some
weak demand.

In the big picture, stable global growth and major central banks cutting
rates into resilient economies should be bullish drivers for the copper market
but more expansionary policies from Chinese officials would give a stronger
support for prices.

Copper
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that copper eventually erased all the gains from the first week of July and
dropped back to the key 4.35 support where we have also the 50% Fibonacci retracement level for confluence.

This is where we can expect
the buyers to step back in with a defined risk below the support to position
for a rally back into the 4.67 resistance. The sellers, on the other hand, will
want to see the price breaking lower to increase the bearish bets into the 4.00
level next.

Copper Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we might even form a range here between the 4.35 support and the 4.67
resistance. There’s not much else we can glean from this chart as the market
participants might keep on “playing the range” until we get a breakout on
either side.

Copper 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 gain more
conviction and increase the bullish bets into the resistance.

The sellers, on
the other hand, will likely keep on leaning on the trendline to push into new
lows and target a break below the support. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we get the latest US Jobless Claims figures.

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

• Not much to get excited about the ECB meeting decision later
• Major currencies slow things down after the action yesterday
• BOJ data does not suggest evidence of intervention on 17 July
• Japan chief Cabinet secretary says no comment on FX moves
• UK May ILO unemployment rate 4.4% vs 4.4% expected
• Switzerland June trade balance CHF 6.18 billion vs CHF 5.81 billion prior
• China’s Communist Party central committee adopts resolution on further deepening reforms

Markets:

• AUD leads, GBP lags on the day
• European equities higher; S&P 500 futures up 0.1%
• US 10-year yields up 4.3 bps to 4.188%
• Gold up 0.2% to $2,463.58
• WTI crude down 0.1% to $82.74
• Bitcoin up 0.2% to $64,687

It was a much quieter session as markets calmed down following all the action yesterday.

In FX, the Japanese yen nudged lower as BOJ data suggested no evidence of intervention yesterday. USD/JPY had already risen from a low of 155.36 in Asia to around 156.00-30 before pushing to around 156.45 now.

Meanwhile, the pound is also a touch softer as GBP/USD continues to stay under the 1.3000 mark. That despite the UK labour market report showing indications that wage pressures remain on the high side for the BOE.

Besides that, there is very little action elsewhere in the FX space with other major currencies not doing much.

That owes much to the calmer mood in equities today as well. US futures are steadier following the selloff in tech shares yesterday. But it is still early in the day, and we could see the overall mood switch up again – one way or another – later in US trading.

For now, it’s on to the ECB policy decision next. But that shouldn’t be one to get traders off their seats, given that the central bank is to keep rates unchanged and defer thing to the September meeting instead.

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

It is very much a placeholder meeting as the ECB has made it clear that they will not cut rates today. Instead, policymakers have been teeing up the idea of the next move coming in September. So, this will be a slight pause following the rate cut in June.

As such, there will be very little to scrutinise in the decision later. The narrative now is that the ECB is still reaffirming that policy is restrictive enough after the first rate cut. And that they are waiting to gain more confidence in the months ahead on the disinflation process.

In fact, the latter was already part and parcel of the equation in June as evident by the meeting accounts here. The governing council ended up supporting Lane’s proposal to cut key rates by 25 bps but there were quite a number of reservations put forward with regards to the inflation outlook.

So, those same reservations i.e. stronger services inflation and wage pressures, will be used as reasons for them to stay on the sidelines today.

I wouldn’t expect much from Lagarde either as it would not be prudent to pre-commit to a move in September. That would be a big misstep on her part if it happens. As poor as she has been in some of the pressers before, I don’t see her pulling off such a miscommunication this time.

It will be pretty much ensuring that September remains live with a strong probability of cutting again if things continue to trend accordingly. But at the same time, reaffirming that they have the flexibility to react to any surprises in the data.

The best way in telling that they did the job right today will be to observe minimal reaction in the euro itself.

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

When copper futures eyed a push above $5 per pound in May, it looked like we were starting to witness one of the breakout trades this decade. However, the hype quickly died down as price fell sharply towards the end of May and that led to another 5% drop in June. The slight rebound earlier this month has been dashed and copper is down almost 5% again in the last four days:

A key thing to note in the fall this week is that price is breaking below the 100-day moving average (red line) for the first time since February. That’s a big blow to the buying momentum and frees up room for a steeper decline. Now, the June low at $4.31 will be eyed before going back to support from the Fib levels above.

Fundamentally, the factors driving copper prices higher this year hasn’t changed too much. The drive for the green transition and supply concerns were key reasons in providing a tailwind for copper.

But at the same time, copper tends to correlate with the health of the global economy. And the outlook for the latter has been struggling, especially with the major slowdown in China since last year. For some context, China buys roughly 40%-50% of the newly mined copper each year. So, that’s a major demand source.

From a structural perspective, I believe that copper still has some bullish underlying factors going for it. But it might have to wait until after the summer for that to show up in the price. That as well as the technicals providing some supportive factor for buyers to step back in.

Looking at the seasonal pattern, August has been the worst month for copper over the last 20 years. So, that’s one reason to stay guarded for at least the next few weeks.

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

The Nasdaq posted its biggest daily decline since December 2022 yesterday
as the rotation out of big tech stocks into more rate sensitive names
continues. We can clearly see this internal market dynamic unfolding as the
Russell 2000 and the Dow keep on gaining.

In the big picture, the fundamentals did not change, on the contrary the
soft-landing narrative strengthened as we continue to see inflation falling
while the economy continues to grow. This week, we got more positive data with US Retail Sales and Industrial Production beating expectations by
a big margin.

It looks like the Fed is going to cut rates into a
resilient economy and that should be a strong bullish driver.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq had a pretty bad day yesterday posting the biggest daily
decline since 2022. The price broke through some key levels and extended the
move to the downside as the bearish momentum increased.

We now have another trendline around the 19700 level where we can
expect the dip-buyers to step back in with a defined risk below the trendline
to position for a rally into a new all-time high. The sellers, on the other
hand, will want to see the price breaking lower to increase the bearish bets
into the next major trendline around the 19000 level.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we have a good resistance zone now around the 20300 level
where we can find the confluence of the trendline, the previous resistance now turned support and the Fibonacci retracement levels.

If we get a pullback into
the resistance, we can expect the sellers to step in to position for a drop
into the 19700 level with a better risk to reward setup. The buyers, on the
other hand, will want to see the price breaking above the resistance and the
downward trendline to regain some control and position for a rally into new
highs.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price is right in the middle of the key levels, so from a risk
management perspective, there’s not much to do here. More aggressive sellers
might pile in on a break below the yesterday’s low but the risk to reward setup
would be worse. The red lines define the average daily range for today.

Upcoming Catalysts

Today we get the latest US Jobless Claims figures.

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

• Japanese yen surge continues in European morning trade
• Japan top currency diplomat Kanda says no choice but to respond to speculators
• US futures fall further as tech shares feel skittish
• Traders trim BOE rate cut bets for August after inflation data
• UK June CPI +2.0% vs +1.9% y/y expected
• Eurozone June final CPI +2.5% vs +2.5% y/y prelim
• Fed’s Williams says rate cut could be warranted in the coming months

Markets:

• JPY leads, USD lags on the day
• European equities lower; S&P 500 futures down 1.0%
• US 10-year yields up 0.8 bps to 4.175%
• Gold up 0.1% to $2,470.15
• WTI crude up 0.4% to $81.05
• Bitcoin up 0.3% to $64,850

It was an eventful session with some big market moves this time around in European morning trade.

The Japanese yen came to life with USD/JPY falling from 158.30 in Asia all the way to a low of 156.10, before a light bounce after.

The move was a strong one-sided pull lower but spread across three hours. It wasn’t quite the sharp minute moves that we saw during the intervention last week. But still, there could be the possibility of Japan giving things a slight nudge to help with the move lower.

I mean, they have been changing up their strategy as of late to intervene when market conditions favour their directional view.

There were also other factors in play during the session, most notably a selloff in equities. That alongside a weaker dollar is arguably exacerbating the drop in USD/JPY, coupled with a technical break here.

After the gains yesterday, US stocks look set for an off day with futures pushed lower. S&P 500 futures are down 1% with tech shares slumping hard. Nasdaq futures are down 1.6% while Dow futures are „only“ down 0.3%. Russell 2000 futures are down 0.8% but briefly erased losses early on in European trading.

The softer risk environment is seeing USD/CHF also down 0.8% to 0.8865 while EUR/USD is up 0.4% to 1.0940 on the day. At the same time, GBP/USD is also pushing above 1.3000 for the first time in a year as UK inflation remains stubborn in June. That saw traders scale back on bets for an August rate cut.

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

• Prior -0.2%
• Market index 214.1 vs 206.1 prior
• Purchase index 140.4 vs 144.3 prior
• Refinance index 613.0 vs 532.3 prior
• 30-year mortgage rate 6.87% vs 7.00% prior

The jump in mortgage applications in the past week comes as the average rate of the most popular US home loan drops by some 13 bps back under 7%. The rebound owes to a surge in refinancing activity, which offset a decline in purchases on the week.

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