Daily market report

During last week, both industrial and services PMI figures came out below expectations in the U.S. which weighed on the U.S. market performance on Friday as stocks resumed their decline ending a winning streak that lasted several weeks.
All major stock indexes retreated as the Standard Poor’s index lost 1.4%, the Nasdaq also fell by 1.4% and the Dow ended last week with a decline of 1.7%. The Standard Poor’s Index slid for the first time in five weeks, while the Nasdaq recorded its first drop in eight weeks and its worst weekly performance since March, meanwhile, the Dow ended a three-week rally.

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In the currency market, the U.S. Dollar rose on growing expectations for an extension of the Fed’s stringent monetary policy. The impact of the dollar’s progress was felt on gold prices, which continued to fall reaching the lowest levels for June at $1910 per ounce after sellers successfully pushed prices below the weekly support of 1930 as mentioned in our previous reports. Currently, the technical picture of gold remains negative in the short term, but the overall trend is still positive, therefore, the current corrective movement is expected to end soon.
On the other side, oil faced strong selling pressure after prices failed to exceed the $72.50 per barrel resistance. WTI crude fell to a low of $67.35 last week. Attention must therefore be paid to the psychological support at $67.00 per barrel in the coming days as a break beneath it could lead to a new wave of decline with increasing negative momentum.

In contrast, any potential bounce is likely to be temporary, and a daily close above the $72.50 barrier is needed to confirm a potential short-term price reversal to the upside, which can lead to a retest of the key weekly resistance zone located between 74.00 and 74.50 levels.

Looking at this week’s important economic data, analysts expect a drop in inflation levels in Canada as the CPI is expected to fall from 0.7% to 0.5% on a monthly basis, on the opposite, forecasts suggest a possible rise in Canada’s GDP. Moreover, in the United States, investors will be waiting for the quarterly GDP figures, which could rise from 1.3% to 1.4%. 

Finally, senior central bankers are due to participate in a panel discussion titled “Policy panel” at the ECB Forum which will be organized in Portugal.


Economic Analyst
Amine Hiani

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