Stay informed with CA Markets’ daily market update, providing the latest trends and insights in Forex and CFD trading. Our comprehensive analysis and expert advice are designed to keep you informed and ahead in CFD trading. Whether you’re navigating currency pairs or exploring diverse asset classes, our updates offer valuable perspectives to optimize your trading strategies. Trust CA Markets to deliver timely market analysis that empowers your decisions and enhances your trading experience.
Market Recap
USD: The USD dropped further overnight to 103.8 points despite stronger-than-expected second-tier US economic data. The main US equity markets decreased again, with the tech-heavy Nasdaq particularly hard hit due to potential tighter US restrictions on computer chip sales to China. The VIX, known as the ‘fear gauge,’ increased to its highest level since early May.
FOMC Beige Book: The report showed the US economy was growing slowly and inflation was cooling. However, industrial production, home starts, and building permits were all stronger than expected in June. FOMC Governor Chris Waller indicated that while the FOMC is getting closer to cutting the Funds rate, it is not there yet. This rules out a rate cut on July 31 but leaves the possibility open for the mid-September meeting.
AUD/USD: The pair eased back down to 0.6720 due to poor news on China. The tightening of US trade policy on computer chip sales to China may slow one of the stronger parts of Chinese manufacturing. The Australian labor force report for June, which is expected to show an increase in the unemployment rate to 4.1%, may impact the Reserve Bank of Australia’s cash rate decision in August. However, because the increase is expected, the impact on AUD/USD might be minimal.
AUD/EUR: The pair eased overnight to test resistance at 0.6159. AUD/USD could test 0.61 over the next twenty-four hours due to weakness in the Australian labor force report and bullish comments from the European Central Bank (ECB). The ECB is expected to leave interest rates unchanged, but the post-meeting communication will be closely watched.
AUD/GBP: Continued to ease. The stronger-than-expected UK CPIs have reduced the likelihood of a rate cut in August. The Bank of England is not expected to cut its Bank rate next month, which could further weigh on AUD/GBP.
AUD/JPY: Dropped almost two yen overnight to test support at 105.2 due to a weaker AUD and stronger JPY. Last week, AUD/JPY traded above 109.0. As suggested in our Weekly FX Strategy, AUD/JPY has been trading above fair value, estimated to be in the range of 95 to 101, centering on 98. The path of least resistance for AUD/JPY is down due to overvaluation.
Day Ahead
Today’s trading session is likely to focus on several key economic data releases, which could impact market sentiment and trading strategies:
- Japan: Tertiary Industry Activity m/m
- Eurozone: Trade Balance
- Canada: CPI m/m
- United States: Core Retail Sales m/m
Economic Data to Watch
- Japan: Tertiary Industry Activity m/m
- Eurozone: Trade Balance
- Canada: CPI m/m
- United States: Core Retail Sales m/m
Disclaimer
The information provided in this daily market update is for informational purposes only and should not be considered as financial advice. Trading Forex and CFDs involves significant risk of loss and may not be suitable for all investors. Past performance is not indicative of future results. CA Markets does not guarantee the accuracy or completeness of the information provided, and we recommend consulting with a qualified financial advisor before making any trading decisions. Users are solely responsible for their own trading activities and decisions.
