Market Update – June 20/2022

Written by Stuart Cowell

USD holds at highs (USDIndex 104.13), Stocks mixed on Friday & third week lower (S&P500 -5.79% & worst week since March 2020, down -23% YTD) For the Dow, this was the 11th weekly decline out of the last 12 weeks, the worst trend ever. Futures steady. Yields rallied (US 10yr 3.24%), Asian markets have mostly slipped, (Nikkei -1.00%). Oil tanked close to -6% on Friday on fears of recession and Gold remains pressured by rising yields & strong USD. BTC broke below $20k over the weekend. Chinese imports of Russian oil +55%. Fed’s Waller & Kashkari support hiking another 75 bps in July, Mester said 2% inflation will take at least 2-yrs and Macron has lost his parliamentary majority, under pressure from both left & right.

Week Ahead – Will be dominated by Central Bank Speak topped by FED Chair Powell’s  2-day testimony to Congress. CPI & PMI data also due this week.

  • USDIndex rallied to 104.80 on Friday and holds at 104.15 today. 
  • Equities – USA500 +8 (+0.02%) at 3674, US500FUTS at 3691 now.
  • Yields 10-year yield higher (3.24% at close), trades at  3.23% now.   
  • Oil & Gold had weaker sessions – USOil crashed to $105.75 Friday from over $123 earlier in the week, trades at $108.00.  Gold could not breach $1850 and trades at  $1840 now.   
  • Bitcoin crashed to $18.8k continues to pivot around $20K.
  • FX markets – EURUSD down at  1.0525,  USDJPY holds at 135.00 zone (24-yr high) and Cable trades down at 1.2240. 

Overnight –  PPI in Germany hotter (1.6% vs 1.5%) down from 2.8% last month but up to 33.6% y/y in May.

Today – Speeches from Fed’s Bullard, ECB’s Lagarde, Lane, Panetta, Kazaks & BoE’s Mann, Juneteenth holiday in the US.

Biggest FX Mover @ (06:30 GMT) AUDUSD (+0.75%). Moves higher from 0.6900 test on Friday to  0.6980, as AUD gets a bid in the Asian session. Next key resistance 0.7000. MAs aligning higher, MACD histogram negative but turning higher, RSI 57 & rising,   H1 ATR 0.0017, Daily ATR 0.0072.

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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