Market Update – August 2/2022

Written by Stuart Cowell

USDIndex sinks again to 105.00, dragged lower by falling Yields (10yr -2.88% to 2.54%). US Stocks lower following record JulyHSBC +6.5% Boeing +5.96% Pearson +12.66% BBBY +14.77%. Asian markets pressured lower by Pelosi’s proposed visit to Taiwan and China promising “countermeasures” including “military actions”. (Hang Seng -2.68%, Nikkei -1.44%). European FUTS also lower. (-0.6%).  Oil tanks under $93, Gold spiked to  $1780  and BTC down under $23k.

RBA raised rates 50bp, as expected, (3rd consecutive month & fastest rate hike cycle since 1994) – BUT cooled forward guidance – will raise rates in months ahead, but “not on a pre-set path” #AUDUSD falls from 0.7030, to 0.6950, #AUDJPY -1.66%.

Biden announces US have killed head of Al-Qaeda, Zawahiri in Kabul drone strike.

  • USDIndex weakens further to test under 105.00 now. YEN & CHF outperform again in Asian session.
  • Equities – USA500 closed lower -11.66pts (-0.28%) (4118), US500FUTS at 4100 now.  4175 remains next key resistance 
  • Yields 10-year yield dived into close 2.60%, down again to 2.54% now. 
  • Oil – tanked to $93.00 from $101.80 highs on Friday. 
  • Gold – spiked to $1780 before cooling to $1773 now. Support at $1770 & $1766.
  • Bitcoin also weaker trades at $22.8K now, from as high as $24.4K. 
  • FX Markets – EURUSD rallied to test 1.0300 zone, USDJPY dived under 131.00 to 130.40 lows. Cable holds over 1.2200 and tests key 1.2260 resistance area.   

Overnight – AUD Building Approvals better than expected (-0.7% vs. -5.3%), Commodity prices lower (14.1% vs. 24.3%) UK House inflation a tick lower at 0.1% m/m. 

Today – Canadian Manufacturing PMI, New Zealand Unemployment, US JOLTS Report, Speeches from Fed’s Bullard, Evans & MesterEarnings BP (out – EPS exceed by +26%, profits a monster £6.95bn), CAT, UBER, AirBnBAMD, PayPal, Starbucks, Gilead, Marriott.

Biggest FX Mover @ (06:30 GMT) AUDJPY (-1.66%). Dovish RBA and Taiwan tensions hit the key most risk sensitive pair. Collapses from 92.500 to 90.75 lows. MAs aligned lower, MACD histogram negative & falling, RSI 22.5, OS & falling,  H1 ATR 0.294, Daily ATR 1.198.

About the author

Stuart Cowell

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.

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