Aug 2, 2017 – Market Update (DXY close to strong support area 92.64, 200 WMA & 91.88, BoJ keeping powerful QE, Iron ore down 1.8%, Plenty of USD liquidity supporting risk assets, Drop in US car sales to hurt, One Apple a day…, Tesla on stage today, Banks not happy with low volatility, Venezuela bonds struggling)

Mr Price Action/ August 2, 2017/ Market Update, Market Update Posts/ 0 comments

 

Short recap

 

Asia in green as techs were inspired by Apple’s earnings

Europe opening higher1

BoJ on a halfway to 2% inflation, must keep powerful QE in place

Structural reforms needed to boost inflation

Trump to address some China trade practices

Iron ore down 1.8% after three day rally (seems not sustainable) and reaching USD 70 per tonne

As it was on the back of Chinese steel producers just pre stocking

Drop to USD 50 may follow

Sep debt ceiling debate/vote coming

Plenty of USD liquidity supporting risk assets

 

Equities

 

Drop in car sales a risk for US economy

Lots of leased cars coming back to market, so automakers will face tough times

But stellar earnings from EU and US keep supporting stocks

Banks not happy with low volatility as it takes the bond trading profits down

Silicon Valley startups facing more pragmatic approach from investors, thus less money

Societe Generale putting EUR 300 mln aside

BP in talks with green car producers to offer a battery charging at its gas stations worldwide

 

Earnings

 

Apple surpassed expectations yesterday, hitting all time high in after market

Still struggling in China but moving focus from cars over to autonomous software and all around

 

Today reporting: MetLife, AIG, Time Warner, Symantec, Molson Coors, Tesla among others

 

Tesla – market is expecting a rise in revenue but not turning to profit will take time. Model 3 to be a drag for the time being.

 

Bonds

 

10-yr Trys yield at 2.27% vs 2.30% yesterday – down on US politics and North Korea

10-yr Bund yield at 0.48% vs 0.54% yesterday

Both Trys and Bund yields felt overnight

Situation in Venezuela getting worse

Sharply falling bonds just reflect the risk of potential sanctions to oil industry

 

DXY

 

Strong support at 92.64 and 91.88, weekly close crucial for further direction

Levels correspond with 1.2000 level in EURUSD

Combined with 200 WMA at 92.37 helped to support USD over the last 2 years

Likely to have attempts to break these levels

 

Source: Saxo Bank

 

EURUSD

 

Sentiment is on cautious side at these levels, market reassessing how USD is actually weak

Not likely to move to 1.2000 without any new USD negative news

What’s coming first? Trump or NFPs?

Support 1.1721 (10 DMA), 1.1785 (200 WMA) – to watch weekly close above 200 WMA

Closing below 10 DMA would make bullish momentum weaker

Resistance 1.1200 more psychological of nature

 

USDJPY

 

Small hurdle at 110.50

Resistance 110.97 (61.8% Fibo)

Support 110.14 (76.4% Fibo)

Bids sitting at 110.00, stops likely below 109.90

 

Data/events

 

ECB Governing Council meeting

Fed’s Mester (1600 GMT)

Fed’s Williams (1930 GMT)

 

Fri

US NFPs – 173k exp

 

Aug 24-26 Jackson Hole

Draghi’s show up highly expected in the light of potential tapering

Any clues on EUR 60 bln monthly purchase being taken down o 40…or?

Sep 7 – ECB

Sep 19-20 FOMC

 

 

Should you have any questions feel free to contact me anytime.

 

Good luck Champs!

 

Mr Hawk

 

 

 

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. Contact: landoftradingATgmailDOTcom

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