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Dow closes above $35k for 1st time

“The goal of a successful trader is to make the best trades. Money is secondary.” - Alexander Elder

 

 

HEADLINES

 

 

  • U.S. dollar posts second week of gains ahead of Fed meeting
  • Gold dips as yields perk up, dollar strengthens
  • Dow jumps more than 200 points to close above 35,000 for the first time ever
  • Big tech companies retake market reins with earnings on tap
  • BTC bulls await breakout above 50-day EMA
  • FOMC Preview: The hiking cycle is still far away – Rabobank
  • Driver of DXY rally switches from yield spreads to risk sentiment – MUFG

 

 

FOREX

 

 

U.S. dollar posts second week of gains ahead of Fed meeting

 

The U.S. dollar on Friday notched a second week of gains after a volatile few days when currencies moved with shifting risk appetite, with the market’s focus now on next week’s Federal Reserve meeting. Some analysts wondered, though, whether the dollar’s recent rally may be losing momentum.

 

 

COMMODITIES

 

 

Gold dips as yields perk up, dollar strengthens

 

Gold fell and was heading for a weekly dip on Friday as a stronger dollar, firmer yields and equity markets chipped away at its appeal. Bullion has shed 0.7% this week after briefly moving toward last week’s one-month peak, as fears over rising Delta variant COVID-19 cases have eased, prompting investors to move out of the safe-haven asset as risk appetite returned.

 

 

STOCKS

 

 

Dow jumps more than 200 points to close above 35,000 for the first time ever

 

U.S. equities rose Friday with the major averages hitting new records as they overcame concerns about economic growth from earlier in the week.

The Dow closed above 35,000 for the first time ever, bringing its gain for 2021 to more than 14%.The blue chip average rose 238.20 points, or 0.68%, to 35,061.55, gaining for a fourth straight day. It made the 1,000-point trek rather quickly, having closed above 34,000 for the first time ever back in mid-April.

 

 

Big tech companies retake market reins with earnings on tap

 

 

The rally on Wall Street faces a fresh test next week with a flood of earnings reports from major U.S. companies, including the tech and internet behemoths that have recently retaken leadership of the market. More than one third of the S&P 500 is set to report quarterly results next week, headlined by Apple, Microsoft, Amazon and Google-parent Alphabet, the four largest U.S. companies by market value.

 

 

CRYPTO

 

 

BTC bulls await breakout above 50-day EMA

 

A four-day winning streak brought the Bitcoin (BTC) prices closer to testing its 50-day exponential moving average (~$35,115) as resistance.

The wave, which was instrumental in strengthening Bitcoin's bullish bias across 2020 as support, flipped to become a resistance during the May 2021 sell-off. In doing so, it capped the cryptocurrency from extending its upside rebound moves many times.

 

 

ANALYSIS

 

 

FOMC Preview: The hiking cycle is still far away – Rabobank

 

“The next meeting of the FOMC takes place on July 27-28. The Fed’s baseline scenario is that the recent rise in inflation is temporary. However, Powell’s testimony to Congress showed that the Fed has started to describe what it would take to shift to an alternative scenario.”

“The FOMC will continue its discussion on tapering started in June. There will be two announcements in the remainder of the year: the decision to start tapering and “advance notice” of this decision. Both are likely to have more market impact than the actual start of tapering. “

“There is no update of the dot plot this month, so officially the median FOMC participant will still expect two hikes of 25 bps each in 2023. However, the discussions on inflation and COVID-19 may indicate which way the Committee is leaning as we head into the September meeting which does involve an update of the projections. Upside risks to inflation could lead to another upward shift in the dot plot, but the downside risks from a prolonged impact of COVID19 could still push the dot plot in the opposite direction.”

 

Driver of DXY rally switches from yield spreads to risk sentiment – MUFG

 

“First stage of USD rally was driven by hawkish Fed policy update as short-term US yields moved higher.”

“Global growth concerns have taken over more recently as main driver for stronger USD. Upcoming FOMC meeting could see market focus shift back to Fed policy and plans for QE taper.”

“We expect the USD to stay bid over the summer as support from global growth and Fed policy tightening concerns remain in focus. However, we expect both concerns to ease later this year resulting in a reversal of USD strength.”

 

 

CHART

 

 

US dollar / Canadian dollar – 4 hour Candlesticks

Source: GKFX Prime Metatrader 4

USD/CAD has formed a bearish pin-bar (or shooting star) reversal pattern on the weekly chart at resistance from the March 2021 highs. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

SOURCE

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/fomc-preview-the-hiking-cycle-is-still-far-away-rabobank-202107231637
https://www.fxstreet.com/news/usd-driver-of-dxy-rally-switches-from-yield-spreads-to-risk-sentiment-mufg-202107231644
https://www.cnbc.com/2021/07/22/stock-market-futures-open-to-close-news.html
https://www.reuters.com/article/us-usa-stocks-weekahead/big-tech-companies-retake-market-reins-with-earnings-on-tap-idUSKBN2ET210
https://cointelegraph.com/news/bitcoin-price-weekly-outlook-btc-bulls-await-breakout-above-50-day-ema
https://economictimes.indiatimes.com/markets/commodities/news/gold-dips-as-yields-perk-up-dollar-strengthens/articleshow/84699509.cms

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