Gold, EUR/USD, S&P 500 Break Out as USD Tanks; Tesla Earnings Eyed

Most read: euro weather forecast: EUR/USD breakout is gaining momentum but Fibonacci resistance is on the radar

This past week, volatility hunting traders had a lot of it. it was there Big moves across all asset classesBut perhaps the most notable was the sharp decline in the US dollar in the run-up to, and more importantly, after the June inflation report.

Wednesday’s CPI numbers and the next day’s PPI data surprised bearishly, reinforcing the argument that price pressures are falling more quickly than initially imagined. This sentiment led traders to Re-pricing lowered the Fed’s tightening pathwhich reduces the possibility of further tightening beyond the quarter-point increase already discounted for the July FOMC meeting.

With US interest rate expectations turning in a less hawkish direction, gold prices have taken off after anemic behavior in recent weeks. Risky assets also gained upward momentum, especially rate-sensitive stocks in the technology sector. When all was said and done, the Nasdaq 100 advanced 3.52% over the week, while the S&P 500 managed a gain of 2.42%.

In the currency markets, the DXY fell around 2.23%, breaking below the psychological 100 level and reaching its weakest point since April 2022. Meanwhile, EUR/USD and GBP/USD saw sharp gains, with both pairs Overcoming major technical hurdles And reaching its strongest levels since the first quarter of 2022.

The main assets of the weekly performance

source: TradingView

Turning to high impact events next week, it will be the highlight of the US economic calendar Retail sales data for June, with estimates calling for a monthly increase of 0.5%. A strong reading could indicate strong household spending, which boosts bets of the Fed raising again sometime in the fall. On the contrary, a weak reading would have the opposite effect: it would reduce the odds of tightening after July.

Across the pond, UK inflation figures for June will take center stage. CPI annual address It is seen slowing to 8.2% from 8.7% previously, while the core is expected to remain unchanged at 7.1%. If price pressures hold, expectations for the Bank of England’s final interest rate could rise, boosting the pound in the short term.

Incoming economic data

source: DailyFX Economic Calendar

Last but not least, traders should also keep an eye on US earnings seasonWhich officially kicked off on Friday after the major banks released numbers. Big players like JP Morgan Chase, Wells Fargo and Citi delivered better-than-expected results, but their guidance failed to impress investors, leaving many financial stocks under pressure heading into the weekend.

Next week, more financial institutions will release their results, with Bank of America, Morgan Stanley and Goldman Sachs taking the top three spots to watch. Commercial and investment banks have a front-row view of the economy, so their forward-looking comments may provide insight into the outlook. However, any signs of worsening economic conditions could be negative for confidence.

in technology, Netflix and Tesla’s quarterly results will steal the spotlight. Both companies are huge by market capitalization, so fluctuations in their share prices can have a significant impact on the performance of the S&P 500 and Nasdaq 100. Check out the DailyFX earnings calendar for a more complete list of the top companies reporting revenue and EPS on the days coming.

Fundamental and technical forecasts

Sterling Outlook: Inflation data will drive GBP/USD and EUR/GBP

US inflation is on the way down, which takes the wind out of the US dollar’s sails. Will Next Week’s UK Inflation Report Ease The Recent Rise In Sterling?

Australian Dollar Forecast: The path of the US dollar is strengthening the Australian dollar

The Australian dollar had a spring in its stride last week as the US dollar fell after weak inflation readings. The new RBA governor could mean the same for monetary policy.

Euro Forecast: EUR/USD The breakout is gaining momentum but Fibonacci resistance is on the radar

The EUR/USD pair has rallied strongly over the past week, rising to its best level since February 2022. With momentum on its side, the outlook for the pair remains positive, but Fibonacci resistance may cover the upside in the future.

S&P and Nasdaq Weekly Outlook: US stocks are heading to the upside as second-quarter earnings begin

US stocks enjoyed another booming week as US inflation surprised to the downside, sending the dollar sharply lower and stocks rallying. Q2 earnings next

Gold Weekly Outlook: A breakout failed to rally as technical indicators show mixed signals

Spot gold attempted a slight recovery on Friday, as the $1960 handle continues to hold. Can gold prices finally take off towards the $2,000/oz mark?

US Crude Oil Weekly Outlook: The market is optimistic about China’s GDP

Crude oil prices rose for the third week in a row supported by a variety of supports and it looks like this trend will continue.

Renewed weakness in the US dollar: EUR/USD, GBP/USD, USD/JPY price settings

The US dollar’s decline to fresh multi-month lows against its peers coupled with a break below key support levels is a sign of renewed bearishness for the greenback. What is the outlook for EUR/USD, GBP/USD, USD/JPY?

Article text by Diego Coleman, Contributing Strategist at DailyFX.com

— Individual articles written by members of the DailyFX team