Markets Week Ahead: Gold Prices, Dow Jones, US Dollar, FANG, Recessions
The spotlight this past week in financial markets seemed to be on precious metals. Gold and silver prices soared with the latter seeing the best week since 1998. This is as the haven-linked US Dollar experienced its worst week against its major counterparts on average since early June. The Euro and growth-linked Australian Dollar soared, with the latter trimming some of its gains later on.
Market sentiment turned sour into the end of last week, with the S&P 500, Dow Jones and Nasdaq Composite giving up gains. Escalating US-China tensions over the closure of consulates, worse-then-expected US initial jobless claims and disappointing earnings from Microsoft (following Netflix’s dismal report earlier) seemed to have contributed to the pessimistic tone in market mood.
The latter could be a sticking point for financial markets in a jam-packed week of event risk ahead. Tech companies such as Amazon, Alphabet, Apple and Facebook are releasing earnings reports, defending their relatively elevated stock valuations. Other more industrial-oriented companies to watch out for include Boeing and Airbus.
Nations are poised to enter technical recessions ahead. Countries like the United States, Germany, Spain and Italy will report second-quarter GDP. Keep in mind that markets are forward looking, and some of these prints may not come as a surprise absent significant misses in expectations. All eyes turn to what is expected to be more stimulus from the US at the end of the week.
Gold prices may extend their rally if the FOMC rate decision and outlook reinforces the narrative of economic stabilization in tandem with progress on another coronavirus relief bill.
The fundamental outlook for the British Pound looks relatively bleak amid renewed ‘no deal’ Brexit concerns and escalating UK-China tensions.
The Nasdaq stock index may face a meaningful pullback in the weeks to come as investors eye profit-taking after a historic 41% rally in the three month through June 2020.
The US Dollar may bottom out in a jam-packed week of event risk that could rekindle market volatility. All eyes are on the Fed, US GDP, the earnings season and more fiscal stimulus.
Having broken above the 1.15 level, EUR/USD is well placed to challenge the 1.1621 high reached in October 2018. However, a pullback is possible first after the pair’s recent strong gains.
The price of oil may stay afloat going into the end of July as it clears the June high ($41.63), while the RSI appears to be breaking out of a bearish trend.
This week, EUR/USD rallied to a multi-month high. Will the pair continue bullish price action in the coming days?
The Dollar decline could soon come to a halt if major price and trend support can hold, but if broken a much broader decline may be underway.
S&P 500 raises risk of wider pullback on bearish divergence, while FTSE 100 risks breaking of range.
Australian Dollar closed a five-week winning streak with the Aussie breakout soaring to fresh 2020 highs. Here are the levels that matter on the AUD/USD technical chart.
Gold prices put in their seventh consecutive week of gains and pushed up to the 1900 level for the first time in almost nine years. But can it last?
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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