Job growth in the US slowed significantly in July. Nonfarm payrolls increased by just 114,000, well below expectations. The unemployment rate has risen to 4.3%, the highest since October 2021. The data prompted fears of an economic slowdown as stock market futures declined and Treasury yields fell, while the Federal Reserve is still contemplating potential rate cuts amid mixed economic signals and easing inflation.
NASDAQ
NASUSD (Daily). In just 60 trading days, the Nasdaq rose 22.5% on the back of the tech boom. That led to massive profit-taking by investors and the price dropped 11.5% from its all-time high. 18,400 is a bargain level, we will go Long and aim for 20,000 to exit.
EURO
Headline inflation in the eurozone rose unexpectedly to 2.6% in July, up from 2.5% in June, despite a slight easing in services sector price growth, with core inflation reaching 2.9%. This came after GDP data showed the eurozone's economy grew by 0.3% in Q2, surpassing expectations. The European Central Bank may consider further cuts in September as economic growth remains subdued despite the higher-than-expected inflation figures.
EURUSD (Daily). Having a sudden reversal last Friday due to the non-farm payroll data, this pair may meet its resistance again. We believe this pair will continue to be range-bound as the Fed and ECB are both in easing mode.
OIL
The recent escalation in tensions between Israel and Iran, along with related actions involving Hezbollah and other regional players, has heightened concerns about a broader conflict in the Middle East that could potentially disrupt oil supplies and lead to price spikes. Investors may consider maintaining a diversified portfolio with assets like gold and oil to protect against such uncertainties.
WTIUSD (Daily). Based on the last 6 months of trading, 72.40 is an area of high demand. Coupled with the uncertainties in the Middle East, we are looking to buy at this level.
GOLD
Gold prices fell on Friday due to profit-taking after rising earlier in the session on expectations of US rate cuts fueled by weaker jobs data. The metal gained 1.8% over the week due to increased safe-haven demand amid Middle East tensions and lower interest rate expectations. Analysts anticipate further upside potential despite short-term fluctuations.
XAUUSD (H4). Making a double top around the all-time high, Gold has seen a rough correction recently. Amidst the war situation, a rate cut and the US election, we believe Gold will be a roller coaster ride in the next few months. This will be good news for intraday and short-term swing traders.
Fullerton Markets Research Team
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