Markets Week Ahead: Gold Prices, Dow Jones, Earnings Season, Euro, ECB
US equities wrapped up a cautiously optimistic week as the Dow Jones, S&P 500 and tech-heavy Nasdaq Composite climbed. Most gains occurred in the latter as the former two have yet to surpass peaks set in June as they spend most of their time in consolidation. Anti-risk assets like the US Dollar and to a certain extent the Japanese Yen underperformed. The growth-linked NZD gained.
Anti-fiat gold prices continued the climb to new 2020 highs as yields on longer-dated Treasuries diminished. This could be an early sign of fading confidence in the outlook for growth down the road. US coronavirus cases continued setting new highs this past week as certain states began seeing record upticks on Covid-19 fatalities.
Stock valuations in the world’s largest economy will start being tested as the second-quarter earnings season gets underway with major financial companies reporting in the week ahead. Further insight will also be revealed into how states and counties approach lockdowns should coronavirus cases and fatalities continue rising.
The Euro and DAX 30 will be closely eyeing the ECB rate decision as well as a meeting between EU leaders to find common ground over a €750 billion rescue package to support economic growth amid Covid-19. The British Pound and Australian Dollar will be watching fresh updates on UK and China GDP data respectively. Will US retail sales continue inspiring confidence in growth?
Two major events will dominate Euro trading in the coming week: an ECB meeting on Eurozone monetary policy, followed by an EU summit to reach agreement on a recovery fund.
The Japanese Yen may rise if a growing number of coronavirus cases around the world puts a premium on anti-risk assets. JPY’s gains may be amplified if corporate earnings fail to impress investors.
The Dow Jones and S&P 500 nervously face the earnings season ascoronavirus deaths could reimpose lockdowns. The DAX 30 eyes an EU rescue package as the FTSE 100 awaits GDP data.
Gold price gains seem to depend on monetary stimulus expansion and may turn lower as contraction of the Federal Reserve’s balance sheet underpins the US Dollar.
A plethora of UK data, however, external factors remain the key driver as GBP/USD edges towards 200DMA
The US Dollar index (DXY) may face range bound conditions over the coming days amid the failed attempt to test the June low (95.75).
This week, EUR/USD rallied to a multi-week high. Will bulls keep leading the price next week?
Gold price action continues to steal market headlines as the precious metal rockets to fresh multi-year highs. Can bullion keep climbing? Or is XAU/USD gearing up for a modest pullback after topping $1,800/oz last week?
It was a surprisingly quiet week in oil, with the net of this week’s price action showing a doji. But a longer-term formation has built that may open the door to that next trend.
The Nasdaq 100 trades at the top of a longstanding technical pattern, just as the arrival of earnings season looks to inject volatility into the market. Does this mean trouble at the top for the Nasdaq?
Coronavirus continues to spread rapidly in the US and Latin America causing risk sentiment to falter despite ongoing economic recovery
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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