Daily Market Report

Market stability is expected to return after a week of significant economic data.

In the stock market, major U.S. indexes ended the week higher with the S&P reaching a thirteen-month high as the index entered the so-called bull market after climbing more than 26% since its last bottom. Moreover, the Dow rose 1.3%, marking progress for the third consecutive week, while the Nasdaq Composite added 3.3% to its value. With the Fed choosing not to raise interest rates for the first time in fifteen months, investors have begun to believe that the U.S. central bank is about to end its rate hike program soon. On the back of this, both the Nasdaq and S&P indexes have reached their highest levels since April last year.

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On the other hand, gold managed to bounce back near the main technical support located at the $1930 level, as it offset most of the losses suffered after the FED’s rate decision before finally settling near the $1960 barrier. In the short term, gold’s rise remains limited by its lack of positive momentum as prices are still unable to break through the $1970 barrier.

Similarly, oil prices rose after a negative start to the week as WTI crude prices settled back above the psychological level of $70 per barrel due to increased optimism about global growth as well as a reduction in Saudi production. Technically, a breakthrough over the resistance zone located between $74 and $74.50 levels is needed in the coming weeks to confirm the double bottom pattern that began at the 64.25 level. Otherwise, sideways trading is expected to continue in the near term.

In Europe, the ECB decided to increase key interest rates by 25 basis points as widely expected. Additionally, President Christine Lagarde said it was very likely that the rates would be raised again in July, leading to a strong Euro against the US dollar as this pair ended the trading week near 1.0950. While in Japan, the BoJ decided to keep interest rates unchanged at -0.1%, leading to another rally in the Yen pairs as the Japanese Yen remains one the weakest currencies in the FX market in the past weeks.

As of today, there will be only a few economic releases to watch mainly from the U.S., traders will be looking for the latest figures of the building permits and housing starts


Economic Analyst
Amine Hiani

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