The manufacturing sector has been contracting
basically all over the world with the biggest economies like US, China and
Eurozone being the highlights. We had recently a rally in copper prices due to
the expectations of more economic stimulus from China, but the market got
disappointed from the weak actions and it’s erasing the entire rally since the
beginning of June. As long as the central banks continue to tighten monetary
conditions and the global economy keeps on slowing down, we can expect lower
and lower prices for copper.

Copper Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the rally that
started from the bounce on the major trendline and the
3.54 support seems to
have ended at the 3.9575 resistance where we had also confluence from the
61.8% Fibonacci retracement level.
Copper sold off pretty heavily and the moving averages crossed
to the downside possibly signalling a restart of the downtrend. The target
should now be the major trendline and the 3.54 support below. A break below the
3.54 support would open the door for a big fall into the 3.14 low.

Copper Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the price
started to roll over as soon as it broke out of the rising channel. The recent
pullback seems to have ended at the 38.2% Fibonacci retracement level of the
entire drop. The buyers will need the price to break above the 3.8250 resistance
to get back some conviction and pile in for a new higher high above the 3.95
level.

Copper Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a key support zone at the 3.7550 level. We can expect more sellers piling
in in case the price breaks below the support and target the 3.62 level. On the
other hand, the buyers may lean on this support with a defined risk below it to
target the breakout of the 3.8250 resistance.

Upcoming Events

We will have some important economic
indicators in the next few days like the US Jobless
Claims and the ISM Services PMI tomorrow and the US NFP report on Friday. Weak
data, especially in the NFP report should bring recessionary fears back into
the market and lead to more downside for copper.

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

Headlines:

• RBA leaves the cash rate unchanged at 4.10%
• Full statement of the RBA monetary policy decision for July 2023
• Aussie pares losses after RBA setback earlier
• China major state-owned banks reportedly to have cut dollar deposits again
• ICYMI: China made a big change at the country’s central bank this week
• Germany May trade balance €14.4 billion vs €17.5 billion expected
• Some hope on the inflation front for the UK

Markets:

• NZD leads, EUR lags on the day
• European equities mixed; S&P 500 futures flat
• Gold up 0.3% to $1,927.98
• WTI crude up 1.6% to $70.91
• Bitcoin down 0.3% to $31,040

The 4th of July holiday in the US is putting a dampener on the market mood today. Major currencies didn’t do much in general, though we did see the aussie bounce around after the RBA decided to press the pause button and leave the cash rate unchanged.

AUD/USD fell initially from 0.6680 to 0.6645 before recovering to around 0.6690 now, up 0.3% on the day. Besides slight gains in the antipodeans, there wasn’t much else to take note of with dollar pairs keeping little changed mostly.

EUR/USD is hugging the 1.0900 handle, down 0.1% on the day. Meanwhile, USD/JPY is down just 0.2% to around 144.30-40 levels for the most part during the session.

There was a distinct lack of appetite and that is to do with US being out as a continuation from the weekend (there was an early market closure yesterday too).

Hopefully things will start to pick up tomorrow but do keep in mind that we have US non-farm payrolls on Friday and that could set markets into another lull before that.

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

The US data has been
consistently surprising to the upside since the last FOMC meeting and given the
Fed’s message of two or more rate hikes coming this year if the economy
performed as expected, the market started to price in a more hawkish path for
interest rates.

The RBNZ, on the other
hand, went on pause at the last meeting and unless we see the data surprise to
the upside, especially the inflation numbers, the central bank should remain on
hold.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the price has
rebounded strongly from the 0.6050 level, and it now looks like the NZDUSD is
targeting the trendline at the
0.63 handle. The moving averages are
again about to crossover and we should see more upside more here, but a lot
will depend on the next NFP and CPI data.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the break of
the 0.61 support resulted
in a fakeout and the price rallied back strongly above the resistance and it’s
now breaking above the upper bound of the bullish flag pattern.
The breakout should lead to even more conviction for the buyers and a rally
into the 0.63 handle where we find the previous swing high resistance and the
major trendline. The sellers are likely to step in there with a defined risk
above the level and target the 0.5987 support.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price is now diverging with
the MACD which
is generally a sign of weakening momentum often followed by pullbacks or
reversals. We should see the first rejection from the 0.62 swing high
resistance where the sellers are likely to pile in targeting a break below the
trendline and new lows. The buyers instead should wait for the price to come
into the trendline to position for more upside. Alternatively, the buyers may
pile in as soon as the price breaks above the 0.62 handle with conviction.

Upcoming Events

It’s Independence Day today for the US, so
liquidity will be thinner. In the following days we will have some important data releases like
the US Jobless Claims and ISM Services PMI on Thursday and the main event of
the week: the US NFP report on Friday.

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

In terms of the size of the rate hikes, it’s still a surprising hawkish one all things considered. The remainder of the year is going to be more interesting but if anything else, it is likely to see major central banks grow less hawkish over time. Some food for thought:

• A catch up to central banks as we get into the second-half of the year

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

This puts him in line as the next PBOC governor and is likely a directive for Yi Gang to step down from the post. Yi has been in charge of China’s central bank since 2018. As for Pan, he replaces Guo Shuqing as party secretary for the central bank with Guo now officially removed from his post as PBOC vice governor as well.

So, what does this tell us?

The reshuffle comes amid a time where the post-Covid recovery in China has pretty much come to a complete halt. It also comes as the yuan exchange rate is coming under pressure and also as Beijing are introducing a host of measures to try and tighten its grip on the financial sector.

According to Reuters sources, Pan’s appointment points to growing concerns within the country’s leadership over systemic risks in the financial sector. The way I see it, this is pretty much Beijing consolidating its power and policy direction as it looks to ensure a continuity of the ongoing monetary policy stance.

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

The FOMC continues to
expect two or more rate hikes this year if the economic data remains strong as
Fed Chair Powell has also reiterated at the ECB forum last week. In fact, the
data has been consistently surprising to the upside since the last FOMC meeting
and that led to a more hawkish market’s pricing.

The RBA decided to keep its
cash rate unchanged today accompanied by the usual hawkish comments and the
promise of doing more if the data suggests so. They repeated their
determination of bringing the inflation rate to target and will do what is
necessary to achieve that.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that since the tap
into the 0.69 handle, AUDUSD sold off pretty heavily with almost no pullbacks
into the 0.66 handle where we got a bounce. The price is now probably pulling
back as the selloff overstretched. We should start to see sellers piling back
in shortly as the price is approaching resistances like the moving averages and previous
swing points.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the divergence with the
MACD was
already signalling a loss of bearish momentum and what follows is generally a
pullback or a reversal. In this case, the price broke out of the trendline,
consolidated a bit and now we are likely to see an extension to the 0.67 handle
where we can find the previous swing high level and the 38.2% Fibonacci retracement level of
the entire selloff since 0.69.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price found a strong support at the
0.6640 level and bounced from it after the downward spike after the RBA’s
decision. We should now see a rally towards the 0.6710 resistance. The sellers
are likely to step in there with a defined risk above the resistance zone and
target the 0.6563 support. Alternatively, if the price breaks the 0.6640
support without getting first to the 0.6710 resistance, the sellers should pile
in anyway and ride the bearish wave after the breakout. The buyers, on the
other hand, should pile in even more aggressively if the price breaks above the
0.6720 level.

Upcoming Events

Today the US is on
holiday for Independence Day, so the we see a choppy price action or nothing at
all as liquidity is thinner. Nonetheless, we’ll have some important economic
releases in the following days like the US Jobless Claims and the ISM Services
PMI on Thursday and the main event of the week: the US NFP on Friday.

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

The NZD is the strongest and the CHF is the weakest as the North American session begins. Today in Canada they will observe Canada Day (July 1st holiday) and as a result will be closed for the day. The US is open to start the day, but stocks will close early at 1 PM as they start the July 4th celebration early (in reality many traders will be taking the day off today as well). The US bond market will close at 2 PM ET. The USD is mostly higher to start the 2nd half of the year.

In the second quarter, Tesla reported record vehicle deliveries of 466,140, an 83% increase from the same period last year and beating expectations of 448,350. This strong performance is believed to be a result of price cuts implemented earlier in the year to stimulate demand. Tesla’s shares rose by over 6% in pre-market trading.

As the second half of 2023 begins, U.S. stock futures remained mixed ahead of a shortened trading week due to the Independence Day holiday. The Nasdaq Composite was the standout performer in the first half of the year, experiencing its best first half since 1983. The gains were largely influenced by artificial intelligence flows into shares like Nvidia, Microsoft, Alphabet. Apple shares also surged and reached the $3 trillion market in capitalization level

Having said that, Apple is reportedly cutting its production targets for the mixed reality Vision Pro headset due to the product’s complexity. Despite its potential to be as influential as the iPhone, concerns remain about the headset’s $3,500 price tag and potential demand impact. Apple shares are trading down marginally by 0.43% in premarket trading

The future of Microsoft’s proposed $75 billion deal to acquire Activision Blizzard is expected to be decided by a San Francisco court this week, on a Federal Trade Commission request to temporarily block the merger due to potential anti-competitive impacts.

Finally, oil prices fluctuated as traders weighed the potential impact of additional Federal Reserve interest rate hikes on global economic activity and oil demand. Other analysts have suggested that oil supplies will likely tighten later this year following Saudi Arabia’s commitment to reduce output in July.

Overnight, several significant economic releases were reported. In China, the Caixin Manufacturing Purchasing Managers‘ Index (PMI) registered at 50.5, slightly below the previous figure of 50.9 but above the anticipated 50.0. This indicates a marginal expansion in China’s manufacturing sector. Meanwhile, Switzerland’s Consumer Price Index (CPI) saw a 0.1% month-over-month increase, falling short of the expected 0.2% rise and underperforming the prior rate of 0.3%. This result signifies a lesser-than-expected inflation rate in Switzerland’s economy. In Spain, the Manufacturing PMI was recorded at 48.0, aligning with expectations but showing a decline from the earlier 48.4, suggesting a contraction in Spain’s manufacturing sector.

For the upcoming economic releases:

• The Institute for Supply Management (ISM) Manufacturing PMI for the United States is due. The last recorded figure was 46.9, and it is forecasted to rise slightly to 47.0. The ISM Manufacturing Prices for the United States will also be released. The previous figure stood at 44.2, while the expected figure is slightly lower at 44.0. Employment is expected at 50.5 versus 51.4 last month. For your guide new orders were at 42.6. There is no estimate for that component.

Before the ISM, the S&P global manufacturing PMI for June will be released. Last month’s final came in at 48.4. The flash estimate came at 46.3 on June 23.

A snapshot of the markets currently shows:

• Crude oil is trading near unchanged at $69.90
• Spot gold is trading down $2.60 or -0.14% $1904.67
• Silver is down $0.18 -0.80% to $22.37
• Bitcoin is trading higher at $30,929, but below the high price of $31,268

In the premarket for US stocks, the major indices are trading mixed in premarket trading. The NASDAQ is higher while the S&P and Dow are trading down in early premarket trading.

• Dow Industrial Average is trading down -55 points after Friday’s 285.18-point rise
• S&P index is trading down -2.2 points after Friday’s 53.92-point rise (up 1.23%)
• NASDAQ index is trading up 8 points after Friday’s 196.59-point surge (1.45%)

In the European equity markets, the major indices are trading mostly higher with the exception of the German DAX

• German DAX is down -0.16%
• France’s CAC is up 0.10%
• UK’s FTSE 100 is up 0.39%
• Spain’s Ibex is up 0.45%
• Italy’s FTSE MIB is up 0.89%

In the Asian Pacific market today, markets closed higher

• Japan’s Nikkei rose 1.7%
• Australia’s S&P/ASX 200 index rose 0.59%
• China’s Shanghai composite index rose 1.31%

In the US debt market yields are continuing it’s run higher

• 2-year yield 4.952% +7.6 basis points
• 5-year yield 4.192% +6.0 basis points
• 10-year yield 3.856% +3.7 basis points
• 30-year yield 3.867% +1.4 basis points

In the European debt market, benchmark 10-year yields are higher as well:

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

• S&P 500 futures flat
• Nasdaq futures +0.1%
• Dow futures -0.2%
• Eurostoxx +0.2%
• Germany DAX -0.2%
• France CAC 40 +0.1%
• UK FTSE +0.4%

It is a sort of long weekend in the US with the 4th of July holiday coming up tomorrow. Adding to that, markets will close early today so appetite might be a bit sapped. But the encouraging part for investors is that we did see stocks brush aside the selling that took place two weeks ago, which prompted this question.

It could still be a bit too early to dismiss growth worries but at the end of it all, June was a stellar month for equities. We’ll see if that can continue into July. For now, it’s waiting on the next big data again and that will be the US non-farm payrolls on Friday.

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

Headlines:

• A catch up to central banks as we get into the second-half of the year
• Oil jumps as Saudi Arabia extends voluntary output cuts for another month
• UK June final manufacturing PMI 46.5 vs 46.2 prelim
• Eurozone June final manufacturing PMI 43.4 vs 43.6 prelim
• Switzerland June CPI +1.7% vs +1.8% y/y expected
• SNB total sight deposits w.e. 30 June CHF 491.9 bn vs CHF 508.0 bn prior
• UBS ups ECB terminal rate forecast to 4% as well
• Morgan Stanley bumps up ECB terminal rate forecast to 4% from 3.75% previously

Markets:

• NZD leads, JPY lags on the day
• European equities slightly higher; S&P 500 futures flat
• US 10-year yields up 3.4 bps to 3.852%
• Gold down 0.4% to $1,912.24
• WTI crude up 1.0% to $71.31
• Bitcoin up 0.9% to $30,649

It is a brand new week, month, quarter, and half-year for markets. But things are starting off with a calmer mood for the most part.

Instead, the notable headline came from the oil market as Saudi Arabia says that it will extend output cuts for one more month while Russia is also pulling back on oil exports by 500k bpd. That resulted in a spike in oil prices, with WTI crude running up from $70.30 to a high of $71.72 before keeping around $71.31 currently.

Meanwhile, the dollar is steady across the board, holding light gains as it covers back some losses from Friday. USD/JPY continues to tip toe towards the 145.00 mark but traders are still cautious of intervention risks by Japan.

EUR/USD is sitting just below 1.0900 while GBP/USD did drop to a low of 1.2660 before holding around 1.2675 currently, down 0.2% on the day.

There wasn’t much for major currencies to work with, as equities are lightly changed as well. US futures are holding flattish mostly while European indices are seeing just very minor gains, hoping to build on the optimism from the latter stages of last week.

In the bond market, Treasury yields are also up against a key technical test so there is that to watch out for.

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

The Dow Jones continues to
climb higher as the US economic data shows a resilient economy with a good
disinflationary trend despite an aggressive monetary tightening seen in the
past year and a half. In fact, despite the Fed members keep talking about two more
rate hikes coming this year, the market continues to rally as strong data
raises the chances of a soft landing. It’s likely that only ugly economic data
will start to weigh on the Dow Jones.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones
found support at the
red 21 moving average as the
US Consumer Confidence report surprised to the upside and the buyers started to
lean on the moving average to position for another rally. The price has broken
above the key 34477 resistance again and it will now probably look towards the
35289 high.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the price
couldn’t pull back all the way to the 34448 support where we had also the 61.8%
Fibonacci retracement level.
Instead, the Dow Jones started to bottom out on a previous swing high level and
jumped higher after the consumer confidence release. The moving averages have
crossed to the upside again as the trend turned bullish, and now the buyers
will target the 35289 resistance.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that from
a risk management perspective, a good support zone for the buyers would be the
34477 level where we can also find the 38.2% Fibonacci retracement level. The
sellers, on the other hand, will want to see the price breaking below the
support zone to pile in and target the 33448 level.

Upcoming Events

It’s
a full week on the data front
beginning with the US ISM Manufacturing PMI today, the US Jobless Claims and
ISM Services PMI on Thursday and concluding the week with the main event: the
US NFP.

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