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General market sentiment turned cautious last week, with equities in North America (Dow Jones and S&P 500 indices) and Europe (FTSE 100 and DAX 30 indices) spending most of their time lower. Those in Asia were mixed. Japan’s Nikkei 225 and China’s Shanghai Composite won. The Australian ASX 200 has weakened.
The cautious deterioration in sentiment led to a slowdown in the recent weakness of the US dollar. Growth-linked currencies like the Australian and New Zealand dollars weakened. The risk-averse Japanese yen strengthened. Anti-fiat gold prices fell as the greenback gained. Crude oil prices also fell slightly.
Following major central bank rate decisions of the RBA, BoC and ECB, traders will likely be interested in key inflation data. The US, UK and Canada will release their latest CPI data. These will continue to shape how central banks can approach policy tightening. This could cause some volatility in the US dollar, British pound and Canadian dollar.
At the beginning of the week, OPEC will publish the last monthly report on the oil market. WTI crude oil prices have weakened since July. It comes amid concerns about the prospects for global growth, as the Covid Delta variant has undermined demand issues. Retail sales in the United States can also spark volatility, especially if Covid shows increasing signs of penetration into the economy.
The California governor’s recall election on Tuesday could be a source of market volatility. Democratic Governor Gavin Newsom could be ousted by a simple majority vote and replaced by the leading Republican candidate Larry Elder. The latter could appoint a Republican senator if current Democratic Senator Dianne Feinstein resigns during her term. This would threaten the slim majority of Democrats in the Senate, which would result in being able to adopt fiscal policy.
WEEKLY PERFORMANCE OF THE US DOLLAR AGAINST CURRENCY AND GOLD
Fundamental forecasts:
US Dollar Outlook Based on Inflation Report Amid Fed Blackout Period
The update of the US Consumer Price Index (CPI) is likely to influence the US dollar during the Federal Reserve’s blackout period as the central bank prepares for a transient rise in the inflation.
S&P 500 and FTSE 100 forecasts for the coming week
Beware of the S&P 500 withdrawal at mid-month. FTSE 100 risks oriented towards a breakout of 7000
MEPs vote to increase NI tax, what does this mean for the GBP?
Will the GBP see long term effects as MPs vote to raise taxes?
Euro forecast: Positive EUR / USD outlook for the coming week, EUR / GBP too
With this month’s ECB Governing Council meeting now over, there is little to stop the euro from appreciating as euro area monetary policy draws closer.
Weekly Oil Forecasts: The Impact of Ida, Increased OPEC Supply, and Auction of China’s Oil Reserves
Brent Crude insensitive to the effects of Ida, increased OPEC supply and China’s oil reserves auctioning, as good demand forecasts for the second half of 2021 support the costs
Technical forecasts:
The fall in the US dollar slows, will earnings pick up? EUR / USD, USD / CAD, AUD / USD, GBP / USD
The weakness of the US dollar slowed down last week. Could the June advance resume? What is the technical outlook for EUR / USD, USD / CAD, AUD / USD and GBP / USD?
Dow Jones, Nasdaq 100, S&P 500 forecasts for the coming week
Stocks pull back a bit here, but so far the price action is not too pervasive and detrimental to the trend; support to watch in the coming days.
Gold Price Forecast: Short term bias is bearish, but technical confirmation is needed
After moving below the 200-day SMA, the outlook for gold prices has turned slightly negative, but to confirm the bearish bias sellers need to invalidate key Fibonacci support
Sterling technical forecast: GBP / USD, GBP / AUD, GBP / CHF charts for the coming week
The technical position of the British pound against the US dollar, Australian dollar and Swiss franc highlights the potential for exploitable trading levels. Here are the charts for GBPUSD, GBPAUD and GBPCHF for the coming week.
Canadian Dollar Forecast: Vulnerability to USD / CAD Recovery – Loonie Levels
The Canadian dollar could still stage a counter-offensive as the USD / CAD recovery remains capped by the annual opening. Loonie levels that rely on the weekly technical chart.
Weekly Crypto Forecasts: Bitcoin (BTC), Ether (ETH) and Cardano (ADA) Key Levels
Bitcoin prices recover from free fall, Ether and Cardano follow
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