USD edges higher as do US equities

USD corrects higher

USD gained across the board in the FX market yesterday, even against the Yen, which clung largely to the gains of the market intervention operation executed by Japanese and US authorities. Today we note the release of June’s JOLTS job openings figure for June, which could move the greenback, given also the release of the US employment report for July at the end of the week.

US equities supported

US equities remained supported by the risk-on approach of the market yesterday, as all three major US equity indexes, Dow Jones, Nasdaq and S&P 500 ended their day in the green. Also, the insistence of US President Trump for the talks with Iran to continue also improved the market sentiment. Nevertheless we still keep our focus on the tech sector as the major market mover for US stock markets. Furthermore, the earnings period is in full swing with SpaceX’s report being the highlight in today’s aftermarket hours.   

Oil prices edge higher

Oil prices edged higher yesterday after a sharp sell-off, as there is some uncertainty about the outlook of the US-Iran negotiations and the reopening of the Straits of Hormuz. Despite US President Trump holding off any attacks and insisting on the negotiation process, the Iranian side stated that no negotiations were taking place and no meetings were scheduled.

Gold remains stable

Gold’s price remained stable yesterday, resisting the strengthening of the USD. We still consider the negative correlation of gold with the USD, the developments in the Middle East, the worries for the Fed’s intentions as the key fundamental factors affecting gold’s price, and note the release of the US employment report for July on Friday as the next possible major market mover.

Other highlights for today

Today we get New Zealand’s Dairy prices, Canada’s trade data for June, the US factory orders for June and the US JOLTS job openings for the same month and later on we get the API weekly crude oil inventories figure. In tomorrow’s Asian session, we get New Zealand’s Q2 employment data, Australia’s and Japan’s final services and composite PMI figures for July, Japan’s overall labour cash earnings for June and China’s rating dog services PMI figure for July. On a monetary level, we note that BoJ is to release the minutes of the June meeting, while in the US Kansas Fed President Schmid is scheduled to speak.

Charts to keep an eye out

Given the release of New Zealand’s Q2 employment data we turn our attention to NZD/USD. On a technical level, after forming a new higher peak, the pair corrected lower teasing the 0.5865 (S1) support line. We maintain our bullish outlook for the pair as long as the upward trendline remains intact and the position of the RSI indicator tends to support our outlook. Should the bulls remain  in charge, we set the next possible target for NZD/USD the 0.5995 (R1) resistance line. For the bears to take over, we would require NZD/USD to break the 0.5865 (S1) support line, continue to break also the prementioned upward trendline, in  first signal that the upward motion has been interrupted and continue to break also the 0.5765 (S2) support level.

Nasdaq continued to rise since yesterday’s report, aiming for the 29675 (R1) resistance line. The RSI indicator has risen reaching the reading of 50, implying a neutral stance on behalf of the market for the index. We tend to maintain our sideways motion bias, yet warn for any bullish market tendencies of the index. Should the bulls take over, Nasdaq may aim break the 29675 (R1) resistance line opening the way for the 30770 (R2) resistance zone. Should the bears have the initiative, Nasdaq may break the 28200 (S1) support line and aim for the 26870 (S2) support level.  

NZD/USD Daily Chart

• Support: 0.5865 (S1), 0.5765 (S2), 0.5680 (S3).
• Resistance: 0.5995 (R1), 0.6090 (R2), 0.6220 (R3). 

US 100 Cash Daily Chart

• Support: 28200 (S1), 26870 (S2), 25375 (S3).
• Resistance: 29675 (R1), 30770 (R2), 32500 (R3).