2024-07-10 12:00

Euro (EUR/USD) Analysis and Charts EUR/USD takes back some of its earlier losses Fed Chair Powell’s comments offered the Dollar a little support Trade will likely be muted into Thursday’s US inflation numbers The Euro made back just a little ground against the United States Dollar in Asia and Europe on Wednesday as investors weighed the previous day’s Congressional testimony from Federal Reserve Chair Jerome Powell and looked forward to his second session on Capitol Hill. Arguably, he’s not told the markets anything they didn’t suspect (and hadn’t priced in) so far but the Dollar got a little boost from his comments, nonetheless. Essentially Powell stuck with the idea that more data are needed to nail down an interest rate cut this year, but that, hopefully, prices are heading in the right direction. The markets’ central thesis that a rate increase is highly unlikely remains very much in place. The broad expectation is that the Fed will have seen enough to begin carefully lowering US borrowing costs by September, as long as the inflation numbers permit it. But that expectation was in place before Powell spoke. EUR/USD is likely to trade pretty narrowly now, at least until Thursday when the markets will get a look at official US consumer price data, with a snapshot of German inflation also due. Economists expect overall, annualized US inflation to have decelerated to 3.1% last month, from May’s 3.3% rate. The core print is expected to be stickier though, holding steady at 3.4% -still too high for the Fed, but trending down. Germany’s ‘final’ June rate is expected to drop to 2.2% from 2.4%. The Fed Chair second day of testimony is typically of less immediate market impact than the first, but investors may well sit on their hands until Mr Powell has finished speaking, just in case. EUR/USD Technical Analysis EUR/USD Daily Chart Compiled Using TradingView The Euro remains court between medium-term up- and downtrend lines as its trading range narrows. The retracement level of 1.08426 continues to elude the bulls who have repeatedly tried and failed to get a daily close above that level in recent sessions. Near-term forays higher will probably attract suspicion unless this level can be durably topped, and that doesn’t look very likely although. Reversals find support around 1.08 ahead of the next retracement at 1.07964. The broad range between 1.0850 and 1.06488 seems very likely to bound the market, at least through the northern hemisphere summer trading period when volatility traditionally eases off at least a little. EUR/USD now trades very close to its 200-day moving average which comes in just a little below the current market at 1.07994. --By David Cottle for DailYFX https://www.dailyfx.com/news/euro-edges-up-as-key-us-german-inflation-numbers-approach-powell-on-tap-again-20240710.html

2024-07-09 18:30

JPMorgan Q2 Analysis and Chart Upcoming Earnings – What to Expect JPMorgan is set to release its Q2 2024 earnings on July 12, before the market open. Analysts project earnings of $4.19 per share, a 4.1% decrease from the previous year. Despite this forecast, JPMorgan has consistently beaten EPS estimates in recent quarters. However, the bank previously cautioned about an "uncertain" outlook due to geopolitical issues and inflation. For fiscal 2024, analysts anticipate EPS of $16.44, down 2.1% from 2023. Understanding various market scenarios is crucial for identifying opportunities. Market expectations have shifted from a "higher for longer" interest rate environment to anticipating a soft landing where inflation falls towards target and rates are eased. However, the possibility of a recession in the US and Europe remains a concern. Banks are generally well-positioned for all three outcomes, though some scenarios are more favorable than others. In a higher-for-longer scenario, banks can sustain higher net interest margins, particularly those with more floating-rate mortgages. US money center banks are likely to thrive, while regional banks may face challenges. A soft-landing scenario would challenge net interest margins but improve banks' alternative income sources. Banks can mitigate some risks through interest rate hedges, and lower rates might ease political pressures and windfall taxes imposed on banks in some European countries. A recession would be the most challenging scenario for banks, as they often act as proxies for the broader macroeconomic environment. Investor focus would shift to asset quality and potential loan losses, with US regional banks and the Chinese small to medium enterprise sector facing increased scrutiny. Stock Performance JPM stock has outperformed both the S&P 500 and the Financial Sector SPDR year-to-date, rising 18.9%. However, shares dropped 4% on May 20 after CEO Jamie Dimon announced limited stock repurchases at current prices. The stock also fell 6% following Q1 results, despite beating revenue and EPS estimates, due to lower-than-expected net interest income and full-year forecasts. Analyst Outlook Analysts maintain a "Strong Buy" rating on JPM, with 17 out of 24 analysts recommending a "Strong Buy." The average price target of $205.25 suggests modest upside potential. JPMorgan Stock Price – Technical Analysis JPMorgan has had an impressive run since October, rallying 57% and hitting a new record high in trading on 3 July.The price recently surpassed its May record high of $207.55, and has recorded higher highs and higher lows over the year so far. It remains above the 50-day simple moving average (SMA), while the 50-, 100- and 200-day SMAs are all pointing higher. The short-term view remains bullish, while the price holds above the June low at $190.50. https://www.dailyfx.com/news/jpmorgan-stock-price-at-record-high-ahead-of-q2-earnings-20240709.html

2024-07-09 15:03

US Dollar, EUR/USD, and GBP/USD Analysis Thursday’s US CPI report is the next driver of US dollar price action. EUR/USD and GBP/USD latest sentiment analysis US Fed Chair Jerome Powell gave little away today at his latest biannual testimony to Congress, reiterating his recent FOMC commentary. In his opening statement, Chair Powell said that the ‘The Federal Reserve remains squarely focused on our dual mandate to promote maximum employment and stable prices for the benefit of the American people. Over the past two years, the economy has made considerable progress toward the Federal Reserve's 2 percent inflation goal, and labor market conditions have cooled while remaining strong. Reflecting these developments, the risks to achieving our employment and inflation goals are coming into better balance.’ Semiannual Monetary Policy Report to Congress The US dollar index (DXY) nudged marginally higher after falling for four of the past five sessions, but the move was limited and left the DXY below the recent trend support. Thursday’s US CPI report (13:30UK) is now expected to be the next driver of US volatility. Core inflation y/y is expected to remain unchanged at 3.4%, while headline inflation y/y is forecast at 3.1%, down from 3.3% in May. US Dollar Index Daily Chart EUR/USD Sentiment Analysis Retail trader sentiment for EUR/USD is mixed. While 39.48% of traders are net-long, recent shifts in positioning suggest conflicting signals. The contrarian view indicates potential upward price movement, but changes in net-short positions present a nuanced outlook. Our current trading bias for EUR/USD remains mixed. GBP/USD Sentiment Analysis GBP/USD sentiment is currently mixed. With 33.70% of traders net-long, the contrarian view suggests potential price increases. However, recent changes in positioning present conflicting signals. Net-long positions have increased slightly daily but decreased significantly weekly, while net-short positions have grown both daily and weekly. This combination results in a mixed GBP/USD trading bias. What are your views on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/us-dollar-little-moved-on-chair-powell-s-testimony-eur-usd-and-gbp-usd-sentiment-analysis-20240709.html

2024-07-09 12:00

US Crude Oil Price and Analysis Bulls have failed at $84 as Beryl downgraded to tropical storm Refinery production on the Gulf Coast is reportedly re-starting The technical picture is cloudy but may point to further falls Oil Prices were lower again on Tuesday on reports that Hurricane Beryl left crucial energy architecture in the Gulf of Mexico largely unscathed, easing near-term supply concerns. The area is usually responsible for just under half of all the United States’ oil output. Some production facilities were evacuated as the hurricane approached, leading to a slowdown in refinery activity at coastal sites. However, Beryl weakened after making landfall in Texas and was downgraded to a tropical storm from a Category 1 hurricane. There was relief at major oil shipping docks in the region which either re-opened on Tuesday or were scheduled to do so soon. A ceasefire in Gaza remains tragically elusive, but efforts to get there continue. That prospect is also helping at the margin to ease worries about Middle Eastern oil supply. Federal Reserve Chair Jerome Powell will deliver his regular testimony to Congress later. At present the markets suspect, or hope, that US interest rates will at last start to fall in September. For as long as this prospect is live, there will probably be a floor under oil prices as investors anticipate increased energy demand. US inventory numbers will be closely watched for a repeat of recent, heavy drawdowns. US Crude Oil Technical Analysis Daily Chart Compiled Using TradingView Bullish momentum seems to have failed again at what looks like the top of a broad current range, in the $84 region. It might be too early to count on further falls though. Retracement support at $80.14 remains some way below the market and, for as long as it holds, the bulls might be inclined to push matters again. There is some danger that a ‘head and shoulders’ pattern might be forming on the daily chart. This would suggest that the market has indeed topped and might put the last two months’ strong gains from the $72 region back in doubt. As we head into Northern Hemisphere summer trading the most likely scenario is probably that the broad range seen since late November last year will hold, or as it has been since, end up being traded back into fairly quickly if escaped. It will likely take a major fundamental shift to see a range break, which in this market will probably mean either a change in the monetary policy outlook, or some left-field news out of major, traditional oil producers. IG’s own sentiment data underscore this, with traders bullish at current levels, but only very slightly so. --By David Cottle for DailyFX https://www.dailyfx.com/news/us-crude-oil-prices-retreat-as-storm-beryl-spares-texas-infrastructure-powell-up-next-20240709.html

2024-07-09 08:15

Japanese Yen (USD/JPY) Analysis and Charts The Bank of Japan may not hike interest rates this month but may begin to pare back its bond-buying program The BoJ looks set to reduce its bond-buying efforts at the end of this month. USD/JPY struggling to break higher ahead of Fed chair Powell’s Testimony. The Bank of Japan's most recent summary of market opinions, released earlier today, has highlighted a growing consensus among bond market participants: the need to curtail the central bank's bond-purchasing program. While the BoJ currently acquires bonds worth about 6 trillion yen each month, market experts are proposing a significant reduction, recommending monthly purchases be downsized to between 2 and 4 trillion yen instead. A reduced bond-buying program would allow Japan interest rates to move higher, aiding the central bank as it looks to start the process of tightening monetary policy. According to the latest money market forecasts, there is around a 60% chance that the BoJ will raise interest rates by 10 basis points at the July 31st meeting. If the BoJ stands pat, then interest rates are fully expected to be hiked at the September 20th meeting with a second rate increase seen on December 19th. USD/JPY is currently treading water just below multi-decade-high levels. While the Japanese Yen remains weak, recent USD/JPY price action has also been driven by the US dollar. The dollar index, DXY, continues to print a pattern of higher lows since the end of last year and press higher, although the recent failure to print a new higher high may temper further upside. Fed chair Jerome Powell is set to testify before Congress today and tomorrow, and lawmakers are likely to quiz Powell on the central bank’s current policy of keeping rates at elevated levels. USD/JPY remains capped at just below 162.00 with short-term support seen at 160.20. USD/JPY volatility remains low but traders should remain alert to any official intervention by Japanese authorities if USD/JPY breaks higher. USD/JPY Daily Price Chart All price charts using TradingView Retail trader data show 21.98% of traders are net-long with the ratio of traders short to long at 3.55 to 1.The number of traders net-long is 10.10% higher than yesterday and 18.24% higher than last week, while the number of traders net-short is 0.08% lower than yesterday and 9.90% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USD/JPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USD/JPY price trend may soon reverse lower despite the fact traders remain net-short. What is your view on the Japanese Yen– bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/japanese-yen-usd-jpy-bond-buying-rate-expectations-and-fed-chair-20240709.html

2024-07-08 14:03

Gold (XAU/USD) Analysis and Chart PBoC left its gold reserves untouched for the second consecutive month. Gold’s multi-month range remains in play. Gold prices are under slight pressure as China's central bank – the People’s Bank of China (PBoC) - holds off on purchases for the second straight month. This absence of a significant buyer – the PBoC have been a constant buyer of gold over the last 18 months - leaves the precious metal susceptible to profit-taking after last week’s NFP-inspired rally. The precious metal traded at a six-week high last Friday at just under $2,400/oz. but has drifted lower today after the weekend news. US interest rate cut expectations nudged higher at the end of last week after the latest US Jobs Report suggested a hiring slowdown. While the headline NFP number was slightly higher than expected, the prior month’s revisions, and the increase in the jobless rate to 4.1%, more than outweighed the headline beat. There is now a 74% probability of a 25bp cut at the September 18th FOMC meeting with a further quarter-point cut priced in by the end of the year. US Dollar Unchanged on Mixed US NFPs, Gold Grabs a Small Bid Data using Reuters Eikon Gold remains rangebound and is currently sitting in the middle of a multi-month range. The 20- and 50-day simple moving averages remain supportive, while a clean break above $2,287/oz. would leave range resistance at $2,450/oz. under threat. A break below the two moving averages would leave $2,320/oz. as the next level of interest. Gold Daily Price Chart Chart via TradingView Retail trader data shows 51.73% of traders are net-long with the ratio of traders long to short at 1.07 to 1.The number of traders net-long is 7.45% higher than yesterday and 14.76% lower than last week, while the number of traders net-short is 2.83% higher than yesterday and 17.61% higher than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Gold trading bias. What is your view on Gold – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/gold-xau-usd-slips-after-the-pboc-step-back-from-buying-for-the-second-month-20240708.html