Daily Market Report

The U.S. market closed lower on Wednesday following the FOMC meeting minutes which showed that more interest rates could be on the way during the coming months. Moreover, some FED officials are expecting a mild recession to start by the end of this year. Meanwhile, factory orders came out below expectations in May at 0.3%. Therefore, stocks traded lower after the market was closed earlier this week for independence day. All three major U.S indexes faced selling pressure with the Dow losing 0.38%, in the meantime, the S&P500 lost 0.2% while the Nasdaq Composite slid 0.18%.
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As of today, the focus will be on the latest job data from the U.S. as investors await the release of the ADP employment change. Figures are expected to have fallen from 278K down to 226K.

On the opposite, the unemployment claims are due to rise from 239K to 247K. A few minutes later, investors will be looking for the ISM services PMI followed by crude oil inventories.

In the FX market, the U.S. Dollar rose against a basket of major currencies after the FOMC meeting minutes gave a boost to the Greenback. Looking now at the latest price development in Oil, we can see that WTI crude extended its advance after successfully breaking above $71.00 a barrel. Therefore, a potential continuation to the upside remains possible in the near term and can target the next resistance located at the 72.60 level. From a wider angle, prices are moving inside a wide range between 75.00 and 67.00 levels which can lead to more choppiness in the near future. Overall, as long as the 67.00 weekly support remains in place, oil prices are likely to stay supported in the coming days with the OPEC meeting in focus.

On the other side, gold traded in line with our expectations as we have seen another rejection from the key resistance zone located between 1932 and 1937 levels as per the chart below. Sellers remain in control and the next level of interest stands at 1910 support. In extension, below this support might trigger fresh selling in the direction of the 1900 psychological level followed by $1885 per ounce. On the flip side, a daily close above the daily resistance zone mentioned above should confirm a potential reversal to the upside with 1950 as the next barrier.
Finally, we expect volatility to increase in the coming hours as we are heading to the weekly close, meanwhile, traders will be looking for the U.S. non-farm payrolls to drive their short-term trading decisions on Friday.

Economic Analyst
Amine Hiani

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