Dollar Weakens, Indices Surge: A Notable Start to the Week
03 July 2023
This week began on a quieter note, but the ripple effects of last week's movements are still apparent. The US dollar witnessed a decline last week, on the USDJPY resulting in its exit from an upward channel formation and signaling a strong sell. Conversely, indices such as the S&P 500 ended the week with an impressive upswing, setting new long-term highs.
Dow Jones and NASDAQ are also inching close to establishing new long-term highs, requiring only to surpass mid-June's levels. Monday's European sessions are expected to start with an increase. For instance, DAX is recapturing territory above its long-term uptrend line, while French CAC has ascended beyond key horizontal and dynamic resistances, triggering a strong buy signal.
On the Forex market, Monday marked rises in NZD and AUD, while the Japanese Yen weakened, thus fueling a notable upswing in AUDJPY. The price is currently breaking free from the wedge pattern, yielding a buy signal.
Monday's economic calendar is quite busy. It kicks off with the inflation figure from Switzerland, projected at 0.2%, followed by the US's ISM Manufacturing PMI, forecasted at 47.2, a slight increase from the previous 46.9.
Commodities started this week on the front foot, backed by the weakening dollar. Gold is poised for a bullish correction, which could potentially end the two-week downtrend witnessed in this instrument.