Economic calendar heats up in a big way

Next 24 hours: Yen surges after BOJ hikes rates, Fed decision ahead

Today’s report: Economic calendar heats up in a big way

The economic calendar is going to heat up in a big way from now into the end of the week. We’ve got the BOJ and Fed decisions today along with other first tier economic data and month end flow. This will then be followed up by the Bank of England on Thursday and the US jobs report on Friday.

Wake-up call

Chart talk: Technical & fundamental highlights

Choose pair:

EURUSD – technical overview

The Euro has been in a multi-month consolidation since bottoming out in 2022. Setbacks have since been exceptionally well supported on dips below 1.0500, with a higher platform sought out ahead of the next major upside extension. Look for a push through the 2023 high at 1.1276 to strengthen the constructive outlook and extend the recovery run towards 1.2000. Only back below 1.0400 negates.

  • R2 1.0982 – 8 March high – Strong
  • R1 1.0949 - 17 July high – Medium
  • S1 1.0798 - 530 July low– Medium
  • S2 1.0666 – 26 June low – Strong

EURUSD – fundamental overview

The Euro was discouraged on Tuesday with French data that showed very little bump from the Olympics. Meanwhile, German GDP came out in negative territory to add to the strain. The only saving grace for the single currency was an uptick in German inflation, which helped to mitigate the fallout. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

EURUSD - Technical charts in detail

GBPUSD – technical overview

Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The door is now open for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should be well supported ahead of 1.2500.

  • R2 1.3045 – 17 July/2024 high – Medium
  • R1 1.2889 – 29 July high – Strong
  • S1 1.2807 – 29 July low – Medium
  • S2 1.2778 – 9 July low – Strong

GBPUSD – fundamental overview

The Pound has been struggling with the latest headlines around the new UK government revealing a dismal state of public finances. The budget gap is likely to be filled with higher taxes and odds for a BOE rate cut this week have inched up above 50%. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

USDJPY – technical overview

The market remains confined to a strong uptrend, most recently extending to a multi-year high through 160.00. Key support comes in at 151.86, with only a weekly close below to delay the constructive outlook. Next major resistance comes in at 165.00.

  • R2 157.87 – 19 July high – Strong
  • R1 156.00 – 24 July high – Medium
  • S1 152.00 – Figure – Medium
  • S2 151.86 – 3 May low – Strong

USDJPY – fundamental overview

The market will spend much of the day and coming sessions absorbing the latest BOJ decision. The expectation is that the central bank will go ahead and raise rates. However, with real wages still negative, the local economy at risk, and the Yen having rallied quite a bit in recent weeks, it's possible this will set up as either a rate hold, or a sell the Yen on the fact once the rate hike is out of the way. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

AUDUSD – technical overview

There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.

  • R1 0.6799– 11 July high – Strong
  • R2 0.6703 – 22 July high – Medium
  • S1 0.6507 – 25 July low– Medium
  • S2 0.6465 – 1 May low – Strong

AUDUSD – fundamental overview

There wasn't much movement in the Australian Dollar on Tuesday, though the currency did struggle with discouraging Aussie housing data. June building approvals came in at -6.5% versus -2.3% expected. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

USDCAD – technical overview

Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.

  • R2 1.3900 – Figure – Medium
  • R1 1.3865 – 29 July/2024 high – Medium
  • S1 1.3756 – 2 July high – Medium
  • S2 1.3700 – 19 July low – Medium

USDCAD – fundamental overview

The Canadian Dollar slid to a fresh yearly low against the Buck on Monday, still struggling with faltering US equities, a dovish Bank of Canada, weaker local data, and softer commodities prices. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

NZDUSD – technical overview

Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.

  • R2 0.5982 – 23 July high – Strong
  • R1 0.5958 – 24 July high – Medium
  • S1 0.5858 – 29 July low – Medium
  • S2 0.5852 – 19 April/2024 low – Strong

NZDUSD – fundamental overview

A soft run of Kiwi data along with an ongoing slide in commodities prices and disruption in US equities has proven to be a big weight on the New Zealand Dollar in recent days. We have however seen some relief, most probably driven on overextended technicals. Key standouts on Wednesday’s calendar come from Aussie inflation, China manufacturing PMIs, the BOJ policy decision, German unemployment, Eurozone inflation, US ADP employment, Canada GDP, Chicago PMIs, pending home sales, and the Fed policy decision.

US SPX 500 – technical overview

Longer-term technical studies are in the process of unwinding from overbought levels. There is now room for a pullback towards previous resistance turned support in the form of the previous record high from April around 5,290 before the market considers a run to another record high.

  • R2 5679 – 16 July/Record high – Strong
  • R1 5593 – 23 July high – Medium
  • S1 5398 – 25 July low – Medium
  • S2 5352 – 23 May high – Strong

US SPX 500 – fundamental overview

Though we have seen a healthy adjustment of investor expectations towards the amount of rate cuts in 2024, the market still hopes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid into dips and consistently pushing record highs. Still, if there is a sense the Fed will need to be more sensitive towards erring on the side of higher rates, it could invite a much bigger disruption to stocks.

GOLD (SPOT) – technical overview

The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs and this next major upside extension into the 2500-3000 area. Setbacks should now be well supported above 2200 on a monthly close basis.

  • R2 2500 – Psychological– Strong
  • R1 2484 – 17 July/Record high – Medium
  • S1 2350 – 4 July low – Strong
  • S2 2287– 7 June low – Strong

GOLD (SPOT) – fundamental overview

The yellow metal has pushed record highs in 2024 with solid demand from medium and longer-term accounts. These players are more concerned about inflation, geopolitical risk and a less upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an end.

Peformance chart: 30-Day Performance vs. US dollar (%)

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