‘Follow the Money’: Major Players Betting on Vaccinations to Keep Global Economy Afloat

The coronavirus is in the news again, not last year’s pandemic fueling COVID-19 version, but the fast-spreading Delta variant. While dominating the mainstream news in the United States (See CNN and FoxNews), and globally on business website such as CNBC, Reuters and Bloomberg, to name a few, we’re not really seeing a major impact on the financial markets.

This is interesting to note because the mainstream story is centered on rising infection numbers, the slow pace of vaccinations and what is likely to happen if countries don’t start clamping down on the spread of the virus. In other words, people’s health. Some experts are even calling it a “life or death” situation.

In the financial markets, obviously we’re not seeing the same reaction as we did in 2020 with stocks dropping 20% in a matter of weeks and crude oil testing prices below $20 a barrel. Instead we’re seeing a relative calm.

Is this telling us to “follow the money?” Is this telling us that since the situation is not as bad as last year, there is no need to panic? Are the financial markets indicating there is not enough information yet to understand the impact of this new outbreak? Do we wait for the bad economic numbers or do we anticipate them?

The answer is all of the above.

Of course, I don’t recommend putting your finances ahead of your health. I don’t think anyone is doing that. Traders are making their decisions on what they know at this time. Some are even basing their decisions on their belief in the vaccinations.

In this case, they feel that enough people are vaccinated so major economic shutdowns are warranted at this time. But we’ve seen different reactions all around the globe, which could be adding to the confusion over what to do. Lighten up on the long side? Buy more, start selling? Move to the sidelines?

I don’t think I am going to be able to answer any of these questions in this article, but if I had to center on one, I’d have to say “follow the money”. But I should add that I am vaccinated, so I may be biased.

Here’s What Others are Saying and Doing

Fed’s Powell Downplays Delta Variant’s Threat to the Economy

The spread of the COVID-19 delta variant is raising infections, leading some companies and governments to require vaccinations and raising concerns about the U.S. economic recovery, according to the AP.

But on Wednesday, Federal Reserve Chair Jerome Powell injected a note of reassurance, suggesting that the delta variant poses little threat to the economy, at least so far.

“What we’ve seen is with successive waves of COVID over the past year and some months now,” Powell said at a news conference, “there has tended to be less in the way of economic implications from each wave. We will see whether that is the case with the delta variety, but it’s certainly not an unreasonable expectation.”

“Dining out, traveling, some schools might not reopen,” he said. “We may see economic effects from some of that or it might weigh on the return to the labor market. We don’t have a strong sense of how that will work out, so we’ll be monitoring it carefully.”

More Corporations are Requiring Workers to Get Vaccinated ~ Axios

The federal government in May said that it is legal for companies to require employees to get vaccinated for coronavirus.

Google CEO Sundar Pichai sent an email to employees announcing that those going back to the office needed to be vaccinated. The company is also extending its work-from-home policy through October 18.

Facebook said that anyone going back to work in their U.S. campuses must be vaccinated.

Netflix is requiring that the casts for all of its U.S. productions be vaccinated, as well as everyone who comes in contact with them.

Drop in UK COVID-19 Cases Indicates Infections Surge May Be Past Peak ~ Reuters

Early last week, the UK added to the confusion when it reported its lowest daily total of new coronavirus cases since July 4, adding to signs that a recent surge in infections driven by the spread of the Delta variant may have passed its peak.

Sydney Readies for the Army as Lockdown Fails to Squash Australia Delta Outbreak ~ CNN

Sydney’s poorest neighborhoods on Friday braced for military enforcement of the city’s toughest and longest lockdown of the COVID-19 pandemic as the infection as the infection numbers held persistently high five weeks since restrictions began.

The situation appears to be so bleak in Australia that economists are already predicting a third quarter contraction.

Oil Climbs, Notches Fourth Monthly Gain on Growing Demand – Reuters

The crude oil market is interesting since it sold off sharply early in July when the Delta-variant story first broke. The biggest concern was demand destruction.

Since then, however, both WTI and Brent have recovered enough to post a fourth monthly gain, with demand growing faster than supply and vaccinations expected to alleviate the impact of a resurgence in COVID-19 infections across the world.

Conclusion

The best advice appears to be: bet on the vaccinations to work, keep monitoring the global economy especially output and labor and keep an eye on gasoline demand.

For a look at all of today’s economic events, check out our economic calendar.

All Eyes on NFP as Fed Won’t Make a Move on Policy without Substantial Labor Market Growth

The Federal Reserve monetary policy statement and remarks from Fed Chair Jerome Powell set the tone in several financial markets last week with the biggest influence on the U.S. Dollar. Disappointing U.S. economic reports also weighed on the greenback.

Ahead of next week, however, investors are asking whether the sell-off represents a change in the longer-term trend or just a shift in momentum.

With the Fed not scheduled to meet until September 21-22, the move likely represents a shift in momentum since policymakers left in place their change in the timeline for the next interest rate hike that it announced in its June 16 monetary policy statement.

In last Wednesday’s announcement, all it did was push the possible start of tapering nearly seven weeks into the future. It didn’t remove the possibility of tapering and it didn’t move the timeline for the next rate hike so we really can’t call its policy statement “dovish”. It should probably be best described as “less-hawkish”.

Furthermore, the Federal Open Market Committee (FOMC) will have two Non-Farm Payrolls and Consumer Inflation reports under their belt before making its late September policy decision. With the labor market and inflation the biggest concerns for the Fed and likely to exert the most influence on policymakers, these are the two reports that traders should pay attention to during August.

The U.S. will release its Non-Farm Payrolls report on August 6 along with data on Average Hourly Earnings and the Unemployment rate. Non-Farm Payrolls are expected to show the economy added 895K new jobs in July. The unemployment rate is expected to dip from 5.9% to 5.7% and Average Hourly Earnings are expected to remain steady at 0.3%.

Labor Market Growth is Powell’s Major Concern

During July, Federal Reserve Chairman Jerome Powell mentioned his concerns about labor market growth twice in his public speeches. The first mention was mid-month in his testimony before Congress. The second was in his post-monetary policy statement press conference last Wednesday.

On July 14, Federal Reserve Chairman Jerome Powell told Congress that while the economy has come a long way back from its pandemic-induced depths, the labor market “still has a long way to go.”

“Labor demand appears to be very strong; job openings are at a record high, hiring is robust, and many workers are leaving their jobs,” Powell said. “Indeed, employers added 1.7 million workers from April through June. However, the unemployment rate remained elevated in June at 5.9 percent.”

Powell added that the official unemployment rate understates the real condition of the job market as many potential workers remain on the sidelines for reasons ranging from continued fear of COVID-19, enhanced unemployment benefits and difficultly finding child case.

At last Wednesday’s press conference, Powell fielded many questions about inflation, but he also said that hiring needed to progress further before the Fed would be ready to dial down its support for the economy.

“I’d say we have some ground to cover on the labor market side,” Powell said. “I think we’re some way away from having had substantial further progress toward the maximum employment goal.”

Conclusion

While the initial reaction to the Fed and Powell was to sell the U.S. Dollar because the notion of tapering was put on hold at its last meeting, the real move in the U.S. Dollar over the short-term is likely to follow the July Non-Farm Payrolls report, due on August 6.

A weaker-than-expected report for July will be bearish for the U.S. Dollar because traders will start reducing the chances of the Fed announcing the start of tapering at its September meeting. Furthermore, if July employment data is weak then the August report due in September is also likely to be weak if the COVID crisis gets out of control.

For a look at all of today’s economic events, check out our economic calendar.

China Manufacturing PMI Eases; Hong Kong, China Shares Tumble on Regulatory Restrictions, COVID Worries

China released economic data early Saturday that showed factor activity expanded in July as the slowest pace in 17 months as higher raw material costs, equipment maintenance and extreme weather weighed on business activity, adding to concerns about a slowdown in the world’s second-biggest economy, Reuters reported.

The report follows a week of volatile trading in Chinese markets that left Hong Kong Hang Seng Index 5% lower. Both Hong Kong and mainland-listed stocks fell on Friday, losing the partial recovery they made after diving earlier in the week.

China’s Factory Activity in July Grows at Slowest Pace Since February 2020

The official manufacturing Purchasing Manager’s Index (PMI) eased to 50.4 in July from 50.9 in June, data from the National Bureau of Statistics (NBS) showed on Saturday, but remained above the 50-point mark that separates growth from contraction.

Analysts had expected it to slip to 50.8. It was the lowest figure since the index slumped to 35.7 in February 2020, after China began lockdowns to control the coronavirus pandemic.

The official non-manufacturing Purchasing Managers’ Index (PMI) eased to 53.3 in July, from 53.5 in June, a separate survey from the NBS showed.

Hong Kong, China Stocks Resume Slump on Regulatory Concerns, COVID Jump

Shares in Hong Kong and China resumed their slump on Friday after rebounding in the previous session, with key indexes booking their worst monthly performance in years, as persistent concerns over regulatory crackdowns outweighed Beijing’s attempts to calm markets.

China’s blue-chip CSI300 Index closed down 0.8% and posted its biggest monthly loss since October 2018, while the Shanghai Composite Index lost 0.42%, capping its worst month since 2019.

Hong Kong tech shares slumped again, pulling the benchmark Hang Seng Index to its biggest monthly fall since October 2018.

The Hang Seng closed down 1.4%, following Thursday’s 3.3% rally. Tech giants such as Meituan and Alibaba led Friday’s decline. The Hang Seng Tech Index plunged 2.56%, extending its weekly fall to 6.7%.

Global investors have been dumping shares in Chinese companies after Beijing banned for-profit tutoring on core school subjects, following crackdowns earlier this year on the tech sector. The regulatory moves have revived worries about the risks of investing in China.

Finally, a resurgence in COVID-19 cases in mainland China and Hong Kong also dented investors’ risk appetite.

Chinese Companies Looking for US Listings Must File More Disclosures – SEC Chair

The chair of the US Securities and Exchange Commission said on Friday that he had asked staff to mandate certain disclosures from offshore issuers associated with China-based operating companies before registration statements can be declared effective.

Gary Gensler also said in a statement that the new disclosures will require Chinese companies tell the regulator and investors whether certain actions could affect the firm’s “financial performance and the enforceability of the contractual arrangements.”

For a look at all of today’s economic events, check out our economic calendar.

Japan, South Korean Shares Pressured by Chinese Technology Crackdown, Renewed COVID-19 Concerns

The major Asia-Pacific stock indexes finished lower across the board on Friday, ending a mostly bearish week on a down note. The markets were rattled all week as a Chinese crackdown on its technology sector and rising cases of the Delta coronavirus variant raged against still-dovish monetary policy and mixed earnings from a range of companies.

Friday’s Cash Market Performance

In Japan, the Nikkei 225 Index settled at 27283.59, down 498.83 or -1.80%. In Hong Kong, the Hang Seng Index finished at 25961.03, down 354.29 or -1.35% and South Korea’s KOSPI Index closed at 3202.32, down 40.33 or -1.24%.

China’s benchmark Shanghai Index settled at 3397.36, down 14.37 or -0.42% and in Australia, the S&P/ASX 200 Index finished at 7392.60, down 24.80 or -0.33%.

Nikkei Ends at Over 6-Month Low on Virus Worries, Earnings Lag

Japan’s Nikkei stock average closed at its lowest since the start of the year on Friday as spiking COVID-19 cases, some earnings disappoints and a decline in U.S. stock futures dented investor sentiment.

The Nikkei’s 1.8% decline on Friday was its biggest decline since June 21 and the lowest close since January 6.

For the month, the Nikkei slumped 5.24%, its worst performance since the coronavirus-induced market meltdown in March last year, after recording an 11th straight decline on the final trading day of the month.

In COVID-related news, Japan’s government on Friday proposed extending the state of emergency through August 31 for Tokyo and some other prefectures, as COVID-19 cases spike to record highs.

“The earnings weren’t that bad, but in terms of the outlook, there doesn’t seem to be a lot of confidence,” which is weighing on stocks, said Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management.

“The market is wary that the Nikkei could break below 27,000.”

South Korea Stocks Post Worst Month Since March 2020 on Weak China Shares, Virus Woes

South Korean shares tumbled more than 1% on Friday, and posted its worst monthly decline in more than a year, weighed by continued worries about the Chinese government’s regulatory crackdown and the COVID-19 pandemic.

The KOSPI ended down 40.33 points, or 1.24%, at 3,302.32, its sharpest daily fall in more than two months. The index ended the month down 2.86%, its sharpest monthly decline since March last year, and snapped an eight month winning streak.

In economic news, Friday’s data showed South Korea’s factory output in June rebounded from May on a boost in semiconductor and car production.

In COVID-related news, South Korea reported 1,710 new cases for Thursday, still near the record infections marked this week, even after the country imposed the toughest distancing measures in the metropolitan Seoul area and some neighboring cities.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Market Edges Lower on Mild Weekend Temperature Forecast

Natural gas futures fell on Friday as investors booked profits ahead of the weekend on fresh uncertainty generated by the latest weather patterns. Rather than guess at the weekend results, traders decided to take to the sidelines instead of risking a potential gap lower opening on Monday if the weekend weather came in milder than expected. According to Natural Gas Intelligence (NGI), traders were focused on a near-term shift in weather that is expected to usher in a reprieve from the oppressive heat that has defined the summer to date over much of the Lower 48.

On Friday, September natural gas futures settled at $3.914, down $0.145 or -3.57%.

NatGasWeather Short-Term Outlook

“National demand will ease to much lighter levels” over the coming week “as weather systems sweep across much of the eastern half of the U.S. with highs of upper 60s to lower 80s,” NatGasWeather said. The firm projected the coolest conditions across the Great Lakes and Northeast. “It will still be hot next week over the West and Plains, including much of Texas, but not enough to counter” the comfortable conditions in the East.

Higher Production Coming?

NGI is reporting that Texas Eastern Transmission Co. (Tetco) notified shippers ahead of trading Friday that it had received approval from federal regulators to return its 30-inch diameter system to full operating pressure, with capacity expected to increase by roughly 0.5 Bcf/d starting in the coming week.

Bespoke Weather Services said this would “have some impact on Henry Hub pricing specifically.” However, the firm doesn’t see the restored capacity “significantly affecting the supply/demand balance,” and it anticipates a return of upward pressure on prices in August.

“Production estimates held around 91.5 Bcf on Friday, shy of the 93 Bcf or higher that Bespoke has said may be needed to keep pace with demand that has been driven by both domestic cooling needs – particularly in the drought-stricken West – and robust levels of liquefied natural gas (LNG) activity. LNG feed gas volumes consistently approached 11 Bcf over the past week, putting export activity near capacity levels,” NGI wrote.

Short-Term Outlook

Although prices struggled last week, it’s not always about heat driven rallies in the summer. Most professionals put the emphasis on low supply heading into winter. If the U.S. starts the winter heating season under supplied then prices are likely to soar if it gets extremely cold.

As far as the summer heat is concerned, sure prices rise when there is intense heat, but production between the end of summer and the start of winter can help increase supply. This is why cold weather rallies are often the most dramatic if the heating season starts undersupplied.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – Sideways to Lower As Rangebound Trade Resumes

Gold prices are trading sharply lower late in the session on Friday amid profit-taking ahead of the weekend in reaction to a rebound in the U.S. Dollar index. The weakness has wiped out more than half of yesterday’s gains that were spurred by U.S. Federal Reserve Chair Jerome Powell’s reassure that a rate hike was not in the cards for the time being.

At 19:50 GMT, December Comex gold futures are trading $1817.40, down $18.40 or -1.00%.

Although the market is weaker on Friday, it’s still on-track for a weekly gain. In addition to Powell’s initial comment about a rate hike, bullish traders also responded positively to his remark that the U.S. job market still had some ground to cover before the Fed would pull back support.

Most traders agree that gold looks good at current price levels especially after forming a support base over a two-week period. The fact that the Federal Reserve didn’t really say anything that changes its direction on mortgage/bond purchases or rate hikes at least helps to put a floor under the market.

However, since the next Fed meeting doesn’t take place until September 21-22, gold traders are going to be without guidance from policymakers for nearly two-months. This means that they will be at the mercy of volatile economic reports and Fed speaker comments for weeks.

On June 16, the Fed moved up its date for the next Fed rate hike and the gold market collapsed from $1860.40 to $1754.50 in just 10 sessions before recovering to $1839.00 over the next 11 days.

It’s going to be hard to justify $1860.00 gold at this time and without the Fed saying anything meaningful until the third week of September, but the economic reports between now and then could do the talking for them.

Between last Wednesday’s meeting and the September 22 Federal Reserve policy statement, policymakers will have had a chance to see two Non-Farm Payrolls and Consumer Price Inflation (CPI) reports. But gold traders will have had the same chance so I think that over the next seven weeks or so, the U.S. economic data will play a greater role in determining the direction of gold prices.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Price Action Indicates Traders Believe Demand Will Outstrip Supply

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading relatively flat on Friday in a lackluster trade as investors do a little position-squaring ahead of the weekend following a volatile, but profitable week.

The catalyst behind this week’s gains has been reduced to the simplest of terms:  bullish traders believe that demand will continue to outstrip supply until at least the end of the year.

At 13:15 GMT, September WTI crude oil futures are trading $73.63, up $0.01 or +0.01%, and October Brent crude oil is at $75.13, up $0.03 or +0.04%.

The week began with a steep sell-off due to concerns over demand destruction as bearish traders increased bets the surging coronavirus delta-variant would slow down the pace of global economic growth.

After a plunge on Monday, buyers stepped in to successfully stop the price slide because they believe that demand will continue to grow the next four months, while vaccinations are expected to alleviate the impact of a resurgence in COVID-19 infections across the globe.

Although buyers and sellers battled it out for two sessions earlier in the week, those with a bullish outlook eventually prevailed when private industry and government inventories data confirmed the strong demand.

The case for stronger demand was further strengthened on Wednesday when the U.S. Federal Reserve confirmed that economic progress was being made. The supply picture even became a little rosier after a story circulated that progress in talks between the United States and Iran over a nuclear deal had stalled, further pushing forward an additional supply from the rogue nation.

Daily Forecast

Although the price action is a little mixed on Friday, the market remains underpinned. This is pretty clear evidence of the presence of buyers even as coronavirus cases rise and parts of the world revert back to lockdowns and restrictions that are not as harsh as we saw during the peak of the pandemic year in 2020. This also offers further evidence that bullish traders believe that higher vaccination rates will keep the new surge under control.

“The oil market no longer appears to be viewing the issue of the Delta variant with quite the same alarm as it was at the beginning of last week,” said Commerzbank analyst Carsten Fritsch.

“There is confidence that the ongoing vaccination campaigns in the industrialized countries will prevent any reintroduction of widespread mobility restrictions,” he added.

“Delta is a risk, but is it going to derail demand growth in the second half?  We may not see that,” said Commonwealth Bank commodities analyst Vivek Dhar.

This bullish theme is likely to carry over into next week with the next major challenge for traders – the fair pricing of crude oil – with OPEC+ expected to begin upping production by 400,000 barrels per day on August 1.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Daily Forecast – Gains Being Capped Amid Weaker Global Equity Markets

The Australian and New Zealand Dollars are trading lower on Friday, pressured by a drop in demand for higher risk currencies that is being fueled by a plunge in global equity markets.

The Aussie and Kiwi are being underpinned, however, by a weaker U.S. Dollar. Meanwhile, the Covid situation in Australia is worsening, raising fears that the country will experience another virus-related contraction during the third quarter.

At 08:00 GMT, the AUD/USD is trading .7391, down 0.0002 or -0.03% and the NZD/USD is at .7006, down 0.0003 or -0.03%.

Global Stock Market Weakness Fueling Lower Demand for Risky Currencies

Futures contracts tied to the major U.S. stock indexes fell early Friday as a soft earnings report from Amazon threatened to dampen an otherwise strong month ahead of July’s final day of trading.

European stocks retreated Friday as investors reacted to another deluge of corporate earnings and economic data.

Shares in Asia-Pacific declined again on Friday, heading for their worst month since March 2020, as volatile trading continued for Chinese tech stocks and Hong Kong’s Hang Seng index tumbled.

The S&P/ASX 200 in Australia closed 0.33% down to 7,392.60. Markets will be tracking the Covid situation in Sydney, which reported a record daily rise in Covid cases Thursday despite an extended lockdown. Reuters reported that authorities have requested help from the military in enforcing the lockdown.

New Zealand Building Consents Rise in June

The number of new dwelling consents approved in New Zealand rose a seasonally adjusted 3.8 percent in June compared with a 2.4 percent drop in the previous month, data from Statistics New Zealand showed on Friday.

Excluding apartments, flats, and retirement village units, the number of consents for new houses was up 0.1 percent.

Building consents were 24.0 percent higher than the same month a year ago.

Australian Economic Data

Australia’s Q2 Producer Price Index (PPI) rose 0.7% on a quarterly basis, beating the 0.4% growth in Q1. The Private Sector Credit rose 0.9% in June.

US Set to Release Slew of Economic Reports

At 12:30 GMT, traders will get the opportunity to react to U.S. reports on Core PCE Prices, Personal Income and Personal Spending. These reports can move the U.S. Dollar.

Core PCE Inflation is expected to show a 0.6% rise for the month. Personal Income is expected to have declined by 0.4%, while Personal Spending is expected to have risen 0.7%.

At 13:45, the Chicago PMI report is expected to come in at 64.2, down from 66.1.

At 14:00 GMT, Revised University of Michigan Consumer Sentiment is expected to come in unchanged at 80.8.

The direction of the AUD/USD and NZD/USD on Friday will be determined by whether risk sentiment is on or off.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Despite Bullish Fundamentals, the Market is Lower for the Week

Natural gas futures are trading lower early Friday amid profit-taking and position-squaring ahead of the weekend. According to NatGasWeather, the heat is expected to taper some in the coming days, which may be one of the reasons for the early weakness.

“National demand will be much lighter this weekend and next week as a series of weather systems over Canada advance aggressively across the eastern half of the U.S. with comfortable highs of 70s to mid-80s,” the firm noted.

At 06:57 GMT, September natural gas futures are trading $3.970, down $0.089 or -2.19%.

On Thursday, the futures contract jumped 2.32%, helped by strong fundamentals and a bullish government storage report. The storage surprise reminded investors that there is a supply/demand imbalance that could create problems this winter.

Weekly US Energy Information Administration Storage Report

The U.S. Energy Information Administration (EIA) reported Thursday that domestic supplies of natural gas rose by 36 billion cubic feet for the week-ended July 23. Ahead of the report, NGI wrote that this week’s EIA storage report was expected to show an injection into storage in the low 40s Bcf.

NGI also reported a Reuters poll found projections ranging from a build of 33 Bcf to 52 Bcf, with a median injection of 42 Bcf. Results of a Bloomberg survey showed estimates spanning 34 Bcf to 49 Bcf, with a median of 41 Bcf and a Wall Street Journal survey produced estimates from 39 Bcf to 47 Bcf with an average of 43 Bcf. The NGI model predicted a 49 Bcf injection.

Total stocks now stand at 2.714 Tcf, down 523 Bcf from a year ago and 168 Bcf below the five-year average, the government said.

Daily Forecast

Today’s early weakness has turned the market lower for the week. Given the bullish fundamentals including tight supply, low production and solid liquefied natural gas (LNG) demand, this move suggests that traders think the market is overpriced and may be due for a short-term pullback.

Daily September Natural Gas

Technically, the main trend is up, but momentum has been trending lower since Monday. A trade through $4.165 will signal a resumption of the uptrend. The main trend will change to down on a move through $3.154. This is highly unlikely however.

The minor trend is down. This is controlling the momentum. A trade through $3.837 will indicate the selling pressure is getting stronger.

The nearest support zone is $3.869 to $3.799. This zone stopped the selling on Wednesday at $3.837.

On the upside, the resistance comes in at $4.001 to $4.040. Trader reaction to this zone could determine the direction of the market on Friday. Look for a strong tone to develop on a sustained move over $4.040, and this week’s weak tone to continue on a sustained move under $4.001.

Buyers could return if the price is right, especially with NatGasWeather predicting heat intensifying August 6-11 with most of the Lower 48 warming back above normal with highs of mid-80s to 100s for a return to strong national demand.

“The big picture still looks bullish” for futures “and could be aided by any hotter weather shift,” Bespoke Weather Services said. “We say it over and over again, but until production can get to 2021 highs, it is difficult to see enough loosening in supply/demand balances to make the market more comfortable with the storage situation.”

For a look at all of today’s economic events, check out our economic calendar.

NASDAQ Bearish Divergence, Amazon’s After-Hour Losses Weighing on US Futures Overnight

U.S. stock index futures are down sharply in Friday’s pre-market session as a disappointing earnings report from Amazon.com threatened to dampen an otherwise strong month ahead of July’s final day of trading. The early price action has put the major futures indexes in a position to post a potentially bearish closing price reversal top. If confirmed, this could mean a weak start to August.

Early Trading Results

At 04:41 GMT, September E-mini S&P 500 Index futures are trading 4378.25, down 33.50 or -0.76%. September E-mini Dow Jones Industrial Average futures are at 34863, down 111 or -0.32% and September E-mini NASDAQ-100 Index is trading 34861, down 113 or -0.32%.

Possible Bearish Divergence

On Thursday, the S&P 500 Index and the Dow Jones Industrial touched record highs but the NASDAQ Composite underperformed. This created a divergence in the major indexes, suggesting weakness in the technology sector.

Weighing on the tech-heavy NASDAQ Composite during the regular session were shares of Facebook, which tumbled 4% after the social media company’s earnings report.

A disappointing IPO from online brokerage firm Robinhood helped cap NASDAQ’s gains throughout the regular session. The stock opened at $38 per share on Thursday, but eventually closed its debut session more than 8% lower at $34.82 per share.

The weakness carried over into the after-hours and pre-market sessions after e-commerce giant Amazon and social media platform Pinterest released their earnings reports to investors.

Amazon equity sank 7.4% in extended trading after it reported its first quarterly revenue miss in three years and gave weaker guidance. The move in Amazon’s stock helped weigh on NASDAQ-100 futures. Pinterest fell even further, down 19%, after saying it lost monthly users during the three months ended June 30.

Thursday Recap

Thursday’s positive session came despite a government report that showed U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less than the 8.4% Dow Jones estimate. Meanwhile, weekly initial claims surprisingly came in higher-than-expected.

Helping to underpin the markets was the Fed news from late Wednesday. Many investors were relieved that the Federal Reserve signaled no imminent plans for dialing back asset purchases.

Fed Chairman Jerome Powell also noted that while the economy has come a long way since the COVID-19 recession, it still has a ways to go before the central bank considers adjusting its easy-money policies.

Near-Term Outlook

The bearish divergence between the NASDAQ and the other major indexes could be an early sign that a major top is forming. If the tech-heavy NASDAQ trades sharply lower, it will drag the technology sector of the S&P 500 with it. The Dow is not likely to feel as much pain since it is tech unweighted.

The U.S. stock markets could be facing several near-term headwinds including summer vacation until after the U.S. Labor Day holiday. This would lead to low volume trading sessions. Overvaluation is another concern as well as the coronavirus outbreak.

One major concern is that investors won’t have a clue as to what the Fed is planning to do about tapering until it meets on September 21-22.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Markets Called Higher on Opening as Investors Hope to Ride Wall Street’s Bullish Wave

A strong performance on Wall Street on Thursday and a rebound in Hong Kong the previous session following a steep plunge earlier in the week is expected to lead to stronger openings in the Asia-Pacific region on Friday.

In the U.S., the major stock indexes rose to record levels as investors shrugged off economic data pointing toward slower-than-expected growth. Investors also showed a delayed reaction to dovish news from the Federal Reserve the previous session.

Many investors were relieved that the Federal Reserve signaled no imminent plans for dialing back asset purchases. Fed Chairman Jerome Powell cautioned that although the economy is making progress towards its goals, it has a ways to go before the central bank would actually adjust its easy policies.

In economic news, U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less than the 8.4% Dow Jones estimate.

Meanwhile, a separate data point showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and above a Dow Jones estimate of 385,000.

Asia-Pacific Investors Hoping to Feed Off Wall Street’s Gains

Asia-Pacific investors are hoping to build on gains from Thursday fueled by a rebound in Hong Kong from a two-day slump earlier in the week and after the U.S. Federal Reserve left its benchmark interest rate near zero.

On Thursday, Hong Kong’s Hang Seng Index jumped 3.3% to close at 26,315.32. The index had dived more than 8% over two days early this week.

Meanwhile, Chinese tech stocks in Hong Kong, which were hit hard by the market rout earlier in the week, soared. Shares of Tencent jumped 10.02% while Alibaba gained 7.7% and Meituan climbed 9.49%. The Hang Seng Tech Index soared 8% to 6,958.77.

Helping to ease concerns in the region was the news that China’s securities regulators told brokerages late Wednesday that the country will allow Chinese firms to go public in the U.S. as long as they meet listing requirements, a source familiar with the matter told CNBC.

Traders should pay particular attention to the Australian stock market. Prices should firm because of strength in the energy and gold sectors due to strong gains on Thursday. Crude oil futures settled 1.41% higher. Gold futures posted a 1.54% gain.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis –

The U.S. Dollar fell to its lowest level since June 29 on Thursday, a day after the U.S. Federal Reserve said the job market still had “some ground to cover” before it would be time to ease monetary stimulus, knocking the wind out of a month-long rally by the greenback.

At 20:01 GMT, September U.S. Dollar Index futures are trading 91.875, down 0.442 or -0.48%.

The index, which is still up 1.6% since the Fed’s June 16 meeting, after a hawkish shift from the U.S. central bank, found little support from U.S. economic data on Thursday.

Gross Domestic Product data showed that while the U.S. economy grew solidly in the second quarter, boosted by massive government aid, growth fell short of economists’ expectations.

GDP increased at a 6.5% annualized rate last quarter, the Commerce Department said on Thursday, well below the 8.5% rate economists polled by Reuters had forecast.

Meanwhile, a separate data point showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and above a Dow Jones estimate of 385,000.

Daily September U.S. Dollar Index

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier on Thursday when sellers took out a pair of main bottoms at 92.075 and 91.995. A trade through the closing price reversal top at 93.195 will change the main trend to up.

The first support is a pair of long-term retracement levels at 91.945 to 91.850.

If the selling pressure continues then look for another steep break into another pair of retracement levels into 91.490 to 91.370.

On the upside, the nearest resistance is a long-term Fibonacci level at 92.495.

The main range is 89.545 to 93.195. The primary target of this current sell-off is its retracement zone at 91.370 to 90.940.

Daily Swing Chart Technical Forecast

The direction of the September U.S. Dollar Index into the close on Thursday is likely to be determined by trader reaction to 91.950 and 91.850.

Bullish Scenario

A sustained move over 91.950 will indicate the presence of buyers. If this is able to generate enough upside momentum over the short-run, we could see a rebound rally into the Fibonacci level at 92.495.

Bearish Scenario

A sustained move under 91.850 will signal the presence of sellers. This could trigger another acceleration to the downside with the next major area a potential support cluster at 91.490, 91.505 and 91.370.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Update – Trading on Strong Side of Retracement Zone Gives WTI Clean Shot at $74.90 – $76.07

U.S. West Texas Intermediate crude oil futures are trading higher late in the session on Thursday as investors continue to bet that demand would outstrip supply into the end of the year.

The trade started firm as the latest government reports released on Wednesday showed supplies in the United States further tightened after shrinking to the smallest levels since January 2020.

The rally then picked up steam throughout the session as the U.S. Dollar plunged to its lowest level since June 29, following dovish comments from Federal Reserve Chairman Jerome Powell late Wednesday. A weaker dollar can boost investor demand for dollar-denominated commodities, including crude oil.

At 18:40 GMT, September WTI crude oil is trading $73.59, up $1.20 or +1.66%.

Although Powell may have expressed a dovish tone about policy, the Fed did say in its monetary policy statement that the U.S. economic recovery is still on track despite the rise in coronavirus infections. This bodes well for future demand, which took a hit recently on worries over demand destruction due to the renewed outbreak of infections.

In other bullish news, Reuters reported that crude may have gotten an additional boost from chatter from Iran that suggested a nuclear deal was not imminent. An agreement between the U.S. and Iran is potentially bearish because it would bring more oil into the market.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum is trending higher. A trade through $74.90 will change the main trend to up. A move through $65.01 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A trade through $70.56 will change the minor trend to down.

The main range is $76.07 to $65.01. The market is currently trading on the strong side of its retracement zone at $71.85 to $70.54, making it support.

Daily Swing Chart Technical Forecast

We’re looking for the upside bias to continue as long as September WTI crude oil can hold above the retracement zone at $71.85 to $70.54.

The daily chart indicates the market has room to run with the next potential upside targets coming in at $74.90 and $76.07.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Futures (GC) Technical Analysis – Decision Time for Gold Bulls at $1839.00 – $1839.90

Gold futures are trading more than 1% higher on Thursday at its highest level since July 15 on the back of dovish comments from Federal Reserve Chairman Jerome Powell who suggested late Wednesday the central bank was unlikely to hike rates anytime soon. Powell based this suggestion on the notion that the U.S. job market still had “some ground to cover” before it would be time to pullback support to the economy.

At 18:18 GMT, December Comex gold futures are at $1835.10, up $30.50 or +1.69%.

After trading sideways for about two weeks, pent-up demand took over, triggering a spike to the upside which began with a mild reversal bottom late Wednesday. Fundamentally, the move is being supported by a plunge in the U.S. Dollar. Traders could also be showing a delayed reaction to the recent news that showed U.S. Real Treasury yields hit an all-time low.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier in the session when buyers took out $1814.50. The trend will change back to down if sellers take out the two main bottoms at $1795.60 and $1793.10.

The main range is $1910.10 to $1754.50. Its retracement zone at $1839.90 to $1859.70 is the next upside target zone. Trader reaction to this zone could determine the near-term direction of the market.

On the downside, support is lined up at $1816.10 and $1795.00.

Daily Swing Chart Technical Forecast

The late session momentum indicates that December Comex gold has a clean shot at the cluster formed by the main top at $1839.00 and the main 50% level at $1839.90.

Sellers could show up on the first test of $1839.00 – $1839.90. However, the latter is also a trigger point for an acceleration into the next potential upside target at $1859.70.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Mid-Session Technical Analysis for July 29, 2021

The Euro hit its highest level against the U.S. Dollar since July 6 on Thursday after the U.S. Federal Reserve’s reassurance that interest rate hikes remain distant. The recent losses in the single-currency had already lost momentum leading into Wednesday’s Federal Reserve meeting and Chairman Jerome Powell’s remark that rate increases were “a ways away” was enough to drive it higher.

At 13:55 GMT, the EUR/USD is trading 1.1882, up 0.0038 or +0.32%.

The EUR/USD was also boosted by disappointing U.S. economic news. The U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less that the 8.4% Dow Jones estimate.

Meanwhile, a separate data point showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and above a Dow Jones estimate of 385,000.

In the Euro Zone, bond yields rose on Thursday as investor sentiment reached a record high and state-level data hinted that German inflation would exceed expectations.

Euro Zone economic sentiment hit a record high in July, estimates from the European Commission showed, though a drop in optimism among consumers and the slower rate of increase may signal the peak is fast approaching.

Finally, German consumer price increases accelerated in July, with several states reporting annual inflation rates between 3.4% and 4.3%, suggesting a national-estimate would exceed the 3.3% expected in a Reuters poll.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The main trend changed to up earlier today when buyers took out the last swing top at 1.1881. The rally stopped just short of the next swing top at 1.1895. A trade through 1.1752 will change the main trend to down.

The short-term range is 1.1975 to 1.1752. The EUR/USD is currently testing its retracement zone at 1.1864 to 1.1890. The latter is a potential trigger point for an acceleration to the upside.

The main range is 1.2218 to 1.1752. If there is an upside breakout then look for the rally to possibly extend into its 50% level at 1.1985.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD into the close on Thursday is likely to be determined by trader reaction to 1.1864 and 1.1890.

Bearish Scenario

A sustained move under 1.1864 will indicate the presence of sellers. If this move creates enough momentum then look for the selling to possibly extend into 1.1819.

Bullish Scenario

A sustained move over 1.1890 will signal the presence of buyers. Taking out 1.1895 will reaffirm the uptrend. The daily chart indicates there is plenty of room to the upside so watch for a near-term acceleration into 1.1975 and 1.1985.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – On Pace to Challenge $1839.90 with Tapering Off the Table for Now

Gold futures are surging on Thursday as Treasury yields dipped and the U.S. Dollar Index plunged in reaction to the somewhat dovish or less-hawkish tone exhibited in yesterday’s Federal Reserve monetary policy statement and Fed Chair Powell’s post-statement press conference.

At 12:37 GMT, December Comex gold futures are trading $1828.70, up $24.10 or +1.34%.

Briefly, gold prices have spiked to a two-week high after Powell reassured investors that a rate hike is not in the cards anytime soon, sending the dollar to multi-week lows.

Is this the resumption of the rally that ended a year-ago next week? No. This is likely only a position-adjustment because the Fed failed to deliver a more-hawkish message on tapering. But enjoy the ride since the next Federal Reserve meeting isn’t until September 21-22.

However, by then it will have two more Non-Farm Payrolls reports and two more consumer inflation reports under their belt. If the labor market shows strength and inflation remains steady then look for the Fed to announce its tapering plan. This news will put a cap on gold prices.

Gold could get a further boost if stocks sell off sharply. Despite bullish earnings reports and the mixed message from the Fed, the stock market is looking a little tired at current price levels. If the major players decide to pack it in for summer vacation in August with a plan to return after the U.S. Labor Day holiday the first week of September or later, we could see heighten volatility, which would send investors into gold.

The current upside target for gold is $1839.90 to $1859.70. Trader reaction to this zone will then determine the longer-term direction of the market.

US Economic News

Helping to boost gold prices is this morning’s disappointing economic data. Signs of a weakening economy are bullish for gold because if it continues into September, it could encourage the Fed from starting the tightening process.

The U.S. second-quarter gross domestic product accelerated 6.5% on an annualized basis, considerably less than the 8.4% Dow Jones estimate.

Meanwhile, a separate data point showed that 400,000 people filed initial claims for unemployment benefits for the week ended July 24. That level is nearly double the pre-pandemic norm and above a Dow Jones estimate of 385,000.

Daily Forecast

The upside momentum is strong enough to drive December Comex gold futures into $1839.90 to $1859.70. What it does there will determine whether the rally continues into at least $1900.00 or pulls back to $1795.00.

It will get there faster if the stock market weakens.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Prices Jump to Two-Week High as Focus Shifts Back to Tight Supply

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Thursday as investors continued to play down the impact of the surge in coronavirus cases on global demand, while focusing more on the tight supply picture.

At 12:02 GMT, September WTI crude oil is trading $72.85, up $0.46 or +0.64% and September Brent crude oil is at $75.26, up $0.52 or +0.70%.

This notion is being support by comments from ANZ analysts who said in a note, “The (oil inventory) falls suggest the rise in cases of COVID-19s Delta variant is having little impact on mobility.”

US Crude Stockpiles Slide as Imports Fall – EIA

U.S. crude stockpiles last week fell to their lowest since January 2020 as imports and production dropped, the Energy Information Administration said Wednesday and Reuters reported.

Crude inventories fell by 4.1 million barrels to 435.6 million barrels in the week to July 23, more than analysts’ expectations in a Reuters poll for a decrease of 2.9 million barrels.

Gasoline stocks fell by 2.3 million barrels, more than double forecasts for a 916,000-barrel drop.

Distillate stockpiles, which include diesel and heating oil, dropped by 3.1 million barrels, data showed, also exceeding expectations for a 435,000-barrel drop.

Stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures fell by 1.27 million barrels to 35.4 million barrels, also their lowest since January 2020, EIA said. Inventories in the Midwest overall fell to the lowest level since October 2018.

Net U.S. crude imports fell last week by 616,000 barrels per day, while weekly field production fell by 200,000 bpd to 11.2 million bpd.

Refinery crude runs fell by 132,000 bpd, and refinery utilization rates slipped 0.3 percentage points, EIA data showed.

Daily Forecast

The drop in gasoline and distillate stocks is probably generating the upside momentum on Thursday, which is a good sign for future crude oil demand. So far, we’re not seeing any signs of demand destruction from the new coronavirus outbreak despite what the mainstream media is saying.

There is risk to the demand outlook due to new restrictions, lockdowns and mask mandates around the world, but so far there has been no noticeable impact on demand for fuel. Furthermore, the Federal Reserve even said on Wednesday in its policy statement that the U.S. economic recovery is still on track despite the rise in coronavirus infections.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Supported by Renewed Weather-Driven Demand in August

Natural gas futures are trading flat shortly before the release of the latest weekly government storage figures at 14:30 GMT. Ahead of the report, the market is being supported by expectations of strong weather-driven demand and steady export activity. This, despite a steep sell-off at the start of the week due to profit-taking, volatility associated with the expiration of the August futures contract and a slight shift toward lower cooling demand.

At 11:08 GMT, September natural gas futures are trading $3.967, unchanged.

Short-Term Weather Forecast

NatGasWeather said that heat is still expected to taper some in coming days. “National demand will be much lighter this weekend and next week as a series of weather systems over Canada advance aggressively across the eastern half of the U.S. with comfortable highs of 70s to mid-80s,” the firm noted.

However, the forecaster also said Wednesday, protections show heat intensifying August 6-11 as most of the Lower 48 “warms back above normal with highs of mid-80s to 100s for a return to strong national demand, Natural Gas Intelligence (NGI) reported.

Liquefied Natural Gas Exports Hovering Near All-Time Highs

NGI also reported that LNG export levels are holding strong this week just shy of 11 Bcf/d – a level near all-time highs. LNG exports to fuel cooling needs in Asia and Europe are soaking up supply and feeding imbalance worries. Estimates this week showed production around 91 Bcf, below recent highs and well below levels prior to the pandemic. The divergence between demand and output has provided price support for futures.

Weekly US Energy Information Administration Storage Report

NGI wrote that this week’s EIA storage report, covering the week-ending July 23, is expected to show an injection into storage in the low 40s Bcf.

NGI also reported a Reuters poll found projections ranging from a build of 33 Bcf to 52 Bcf, with a median injection of 42 Bcf. Results of a Bloomberg survey showed estimates spanning 34 Bcf to 49 Bcf, with a median of 41 Bcf and a Wall Street Journal survey produced estimates from 39 Bcf to 47 Bcf with an average of 43 Bcf. NGI model is predicting a 49 Bcf injection.

Daily September Natural Gas

Daily Forecast

Ahead of the EIA report, the deficits, combined with ongoing demand, are fueling the imbalance concerns.

“The big picture still looks bullish” for futures “and could be aided by any hotter weather shift,” Bespoke Weather Services said. “We say it over and over again, but until production can get to 2021 highs, it is difficult to see enough loosening in supply/demand balances to make the market more comfortable with the storage situation.”

Technically, the main trend is up, but momentum has been trending lower since Monday. A trade through $4.165 will signal a resumption of the uptrend. The main trend will change to down on a move through $3.154. This is highly unlikely however.

The minor trend is down. This is controlling the momentum. A trade through $3.837 will indicate the selling pressure is getting stronger.

The nearest support zone is $3.869 to $3.799. This zone stopped the selling on Wednesday at $3.837.

On the upside, the resistance comes in at $4.001 to $4.040. Trader reaction to this zone could determine the direction of the market on Thursday. Look for a strong tone to develop on a sustained move over $4.040, and this week’s weak tone to continue on a sustained move under $4.001.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – Weak after Fed Pushes Potential Tapering Decision into Late September

The Dollar/Yen is trading lower on Thursday after the Federal Reserve failed to strike the hawkish cord that the markets had expected in its monetary policy statement released on Wednesday and Fed Chair Jerome Powell reiterated the Fed was not ready to think about raising interest rates.

At 07:32 GMT, the USD/JPY is trading 109.813, down 0.097 or -0.09%.

The USD/JPY started to weaken on Wednesday after the Federal Reserve gave no clue about when it might start reducing its purchases of government bonds, even as it said the economic recovery is on track.

Even though investors didn’t think the Fed would make any major announcements at this meeting, I don’t think they expected policymakers to be this quiet about their tapering plans. This now leaves investors with essentially little guidance from the Fed until its next policy meeting on September 21-22.

The Fed said after its latest policy meeting ended on Wednesday that the economy has been strengthening despite a rise in coronavirus infections, and that accelerating inflation remained the result of “transitory factors.” The Fed remained upbeat and flagged ongoing talks around the eventual withdrawal of monetary policy support.

In a news conference following the release of the statement, Fed Chair Jerome Powell said the U.S. job market still had “some ground to cover” before it would be time to pull back from the economic support the U.S. central bank put in place in the spring of 2020 to battle the coronavirus pandemic’s economic shocks.

The Fed’s policy statement, issued after the end of a two-day policy meeting, reflected that confidence as the central bank continues debating how to wind down its bond purchases.

There appeared to be progress in that discussion, though no clear timetable for reducing the bond purchases. Powell said there was “very little support” for cutting the $40 billion in monthly purchases of mortgage-backed securities “earlier” than the $80 billion in Treasuries, and that once the progress begins “we will taper them at the same time.”

Daily Forecast

Although it is not being reflected in today’s price action, the upbeat tone of the Fed’s policy statement could mean the Fed will announce the start of tapering at its September 21-22 meeting.

Since the labor market seems to be a major concern, the Fed will have two monthly Non-Farm Payrolls reports under their belt at that time. Furthermore, it will also have two monthly consumer inflation reports. So there will be plenty of data available to make the call on tapering.

If there is an early decision, it could be made at the Jackson Hole Central Bankers’ Symposium August 26-28.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Main Trend Changes to Up on Trade Through .7397

The Australian Dollar is trading higher on Thursday, following through to the upside following yesterday’s reversal to the upside. After an early session setback on Wednesday, the Aussie posted a dramatic recovery into the close following a lukewarm Federal Reserve statement and dovish remarks from Fed Chair Jerome Powell.

At 06:45 GMT, the AUD/USD is trading .7385, up 0.0011 or +0.15%.

On Wednesday, the Federal Reserve concluded its two-day meeting of the Federal Open Market Committee (FOMC) by making no move on asset purchases. Shortly thereafter, Powell cautioned in his press conference that although the economy is making progress toward its goals, it has a ways to go before the central bank would actually adjust its easy policies.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7397 will change the main trend to up. A move through .7290 will signal a resumption of the downtrend. Taking out .7397 will also turn .7317 into a new main bottom.

The minor trend is also down. A new minor bottom has formed at .7317.

The minor range is .7290 to .7397. Its pivot at .7343 is support.

The AUD/USD is currently straddling a long-term Fibonacci level at .7379.

The short-term range is .7503 to .7290. Its retracement zone at .7397 to .7422 is the next upside target. The upper or Fibonacci level at .7422 is a potential trigger point for an acceleration to the upside.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD on Thursday is likely to be determined by trader reaction to .7379.

Bullish Scenario

A sustained move over .7379 will indicate the presence of buyers. This could lead to a change in the main trend and a labored rally into .7397 to .7422.

The trigger point for an acceleration to the upside is .7422 with the primary upside target .7499 to .7503.

Bearish Scenario

A sustained move under .7379 will signal the presence of sellers. This could trigger a pullback into .7343. If this level fails then look for the selling to possibly extend into the .7317 minor bottom. Taking out this level could trigger a further break into the main bottom at .7290.

For a look at all of today’s economic events, check out our economic calendar.