Bitcoin prices have soared this weekend, negating the recent bearish trend that saw the price dip to $53,400 per coin at the start of the month. Currently, BTC is trading near $63K.
Two key factors are driving this surge. Firstly, the German government appears to have completed the sale of crypto assets, providing some stability to the market. Secondly, the assassination attempt on former President Trump has significantly influenced the market. Trump's rising popularity, bolstered by the strong public support following the attempt, has energized crypto holders. As a known advocate for cryptocurrencies, many believe his potential election win could benefit the crypto industry, prompting increased buying activity.
In other economic news, the Federal Reserve needed more data before justifying a rate cut. While the Fed thinks the labour market remains strong but not overheated, ING believes the Fed would like to see core inflation stabilize at or below 0.2% month-to-month to bring annual inflation down to 2%.
ING also suggests the unemployment rate needs to rise to 4.3% from the current 4.1% for the Fed to consider rate cuts. Markets anticipate the first rate cut in September, pending confirming data.
From New Zealand, the central bank surprised markets by stating that its restrictive monetary policy had significantly reduced New Zealand consumer price inflation. The central bank believes inflation will return to the 1-3% target range in the second half of this year. Consequently, the market is pricing in 60 basis points of rate cuts for this year. Upcoming consumer price figures from New Zealand, set to be published on Wednesday, July 17th, will be crucial in confirming or dispelling the central bank's view, affecting volatility in NZD/JPY, NZD/USD, and AUD pairs.
In the US, inflation rate moved lower, marking the first negative print since January 2023 with a decline of 0.1%, contrary to the anticipated 0.1% increase. This lower monthly inflation caused the annual CPI to drop to 3%, below the expected 3.1% and the previous 3.3%. This data buoyed risky assets, pushing GBP/USD and EUR/USD higher, with GBP/USD triggering a major pattern.
Looking ahead, several key economic reports will influence markets this week. On Tuesday, the Canadian Consumer Price Index and US Retail Sales will be released at 13:30 London time. Wednesday brings the New Zealand Consumer Price Index at 00:45, followed by UK inflation data at 07:00. Thursday features Australian unemployment figures, the UK labor market report, and the ECB rate meeting, with markets looking for hints of potential rate cuts by September. Additionally, earnings reports for Netflix and a rate meeting by the South African Central Bank will be watched closely.
Gold (XAUUSD)
As projected last week, Gold prices bounced from around $2,369, supported by declining US inflation and weak ISM figures from two weeks ago. The price might dip towards $2,347-$2,389, but the fundamentals and charts suggest continued support.
EUR/USD
The pair is trying to trade above a downward trend line from July 2023 and breach the June 4th highs. As long as it stays above 1.0863, the price is likely to push higher, potentially reaching the March high of 1.0980.
GBP/USD
Last week, we said the price could reach 1.30 if it traded above 1.2753, the price is now near this level, and the outlook remains bullish, having breached a triangle pattern and a smaller inverse head-and-shoulders pattern last week. The next major highs are at 1.3139 and 1.3343. A retracement towards 1.229-1.228 is possible, but the trend will stay upward if above 1.2772.
AUD/USD
We have been bullish over the last few weeks, and the trend is upward as long as AUD/USD trades above 1.06708. The rectangle pattern seen in the chart below suggests the price can reach the December high of 0.6859.
USD/JPY
Last week, the price experienced a major sell-off due to lower-than-expected US inflation figures and possible Japanese central bank intervention. The price is now at levels seen in late May. A low is likely to form between 157.84-154.47 to resume its uptrend. It is important to understand that the Bank of Japan can intervene in any moment.
Crude Oil (BRENT)
Crude oil prices are bouncing from last week’s mentioned range, with the trend remaining upward as long as it trades above $83.20. However, the actual trend is weak.
CAC 40 (FRA40)
The French stock market index, FRA 40, bounced from the 7,516 level as projected in recent weeks. The outlook remains upward as long as it trades above 7,407. With a hung parliament in France, major economic changes are unlikely, supporting the index. The next resistance level is 7,714.
Nasdaq 100 (NAS100)
The Nasdaq 100 continues to be strong. Traders are likely to support the trend on dips within the range of 20,053 to 20,274.
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