Daily Market Report

The U.S. Dollar was little changed on Monday due to the lack of economic releases while the three major indexes started the week on a positive note. The S&P500 and the Nasdaq managed to rebound snapping a four-day losing streak. The U.S. stock market’s bullish momentum was supported by better-than-expected corporate earnings as 80% of the S&P500 companies that reported their financial results exceeded forecasts according to FactSet. 
For the week ahead, all eyes will be on the upcoming U.S. inflation figures as the FED continues to monitor the recent changes in key economic data before deciding its next rate move in September. Looking at recent price action, the 30-stock index jumped 1.16%, the Nasdaq Composite added 0.61% and the S&P500 rose 0.9% which keeps the positive outlook intact.

Technically, the Dow remains in an uptrend as the daily chart is still showing a series of higher highs and higher lows. The index bounced a few points away from the key support of 34950 mentioned in our previous report as buyers regained control after we have seen a strong positive close yesterday. As of now, the Dow is expected to extend higher toward the nearest barrier at 35500 before facing new resistance. Therefore, the recent advance is likely to be limited while below the 35700 peak. The index is likely to trade sideways in the coming days until we see a break either below the 35000 psychological support or above the 35700 resistance.
In the FX Market, the U.S. Dollar was slightly higher than other major currencies as investors remain cautious about the future rates path. The EURUSD currency pair failed to overtake the key resistance located at the 1.1050 level which keeps the single currency under pressure in the near term. Moreover, we have seen a clear slowdown in the bullish momentum after breaking below the psychological support of 1.1000. Therefore, the pair is expected to trade sideways to lower in the coming hours toward the 1.0940-1.0920 support zone. In extension, a daily close below this zone can trigger a strong decline in the direction of 1.0865 followed by 1.0830. On the flip side, if the pair manage to hold above the 1.0920 support, a retest of the 1.1050 barrier cannot be ruled out in the near future.
In the commodity market, gold failed to hold last Friday’s gains and the focus has turned again on the daily support zone located between the 1925 and 1930 levels in addition to the rising trendline that was supporting prices since November 2022 low as per the chart below. From a wider angle, the yellow metal buyers are still preserving the positive momentum while the 1893 low remains in place. On the other hand, a break below the 1925 should expose the 1900 support while a stabilization above the 1925 can lead to a retest of the 1945 resistance level. To summarize, the short-term trend of gold is neutral, consequently, we will be waiting for further price action before confirming the next direction.
Moreover, WTI crude retreated after reaching the weekly resistance of 83.30. For the time being, the trend remains bullish and if prices continue to trade above the support zone located between the 79.10 and 78.30 levels, the positive outlook will remain unchanged. On the other hand, the nearest support stands at 81.50 followed by the 80.70 level. The uptrend is extended and any drop should be considered temporary before another rally begins.

Economic Analyst
Amine Hiani

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