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4 Global Market Updates- 4 August, 2022

In this article, we have covered the highlights of global market news about the US Dollar Index, EUR/GBP, USD/JPY and Australia’s trade surplus.
The US Dollar Index seems cautious at about 106.30.

As measured by the US Dollar Index (DXY), the dollar continues to trade cautiously at 106.30 against a background of rising US yields and shifting risk appetite trends.

The dollar’s recovery has slowed down in reaction to recent hawkish remarks from FOMC members Daly, Bullard, and Mester, who justified more tightening in the coming months. This development is also consistent with the rise in US rates throughout the curve, notably in the short end.

EUR/GBP Price Analysis: Below 0.8440, bears are in control and the BOE is watching

As buyers make another effort to overcome the prior support level from March on early Thursday morning in Europe, bids on the EUR/GBP increase to 0.8310. Nevertheless, on Tuesday, the cross-currency pair fell to its lowest levels since April 22 before rebounding off 0.8340.

However, the pair’s most recent rebound draws insights from the RSI circumstances that were almost oversold. The quotation is still below the support line that later turned into resistance around 0.8380. The weekly resistance line, located at 0.8385, presents another obstacle for short-term EUR/GBP investors.

Even if the pair moves beyond 0.8385, the EUR/GBP bulls may face resistance from the 200-DMA level and the 61.8 percent Fibonacci retracement of the March-June upswing, which are located respectively at 0.8400 and 0.8440.

The onus then shifts to the buyer, and prices may increase in the direction of the swing high from late July, which was about 0.8585.

EUR/GBP

On the other hand, the recent bottom at 0.8340 limits the EUR/GBP prices’ immediate downside during the recent decline. The next move seems to go southward toward the low of 0.8295 on March 23.

The possibility of seeing a further decline toward the annual low set in March, at 0.8200, cannot be ruled out if EUR/GBP continues bearish above 0.8295.

USD/JPY is likely to remain range-bound in the short future – UOB

The resistance around 134.60 is unlikely to be threatened by the overbought circumstances, according to the 24-hour view: “We anticipated USD to ‘move further’ yesterday. Our prediction came true, as USD increased to 134.54 before abruptly falling again. The upward trend has paused, and the USD is not expected to continue. For now, it’s more probable that the USD will fluctuate between 133.10 and 134.50.

Within the next three weeks: “Our position has not changed from yesterday (03 Aug, spot at 133.50). The current USD weakness is over, as was indicated. The USD is anticipated to trade in the range of 131.30 and 135.60 for the time being as the recent price movements are likely the beginning of a wide consolidation period.

Australia’s trade surplus has reached a new high, according to Westpac.

“The jump in exports helped the surplus rise to $17.7 billion in June.”

The $14.6 billion result for Westpac and the $14.0 billion market median in June was beyond forecasts.

Note that the May results were reduced from $16.0 billion to $15.0 billion, nevertheless setting a new record high before the June result.

Off a very low basis, “export profits rose during the June quarter, indicating a mix of stronger prices and a welcome increase in volumes.”

“In April, exports increased by 5.4 percent. In May, they increased by 8.9 percent. In June, they increased by 5.1 percent. We had predicted that the export market would stabilise in June.

The growth of 0.7 percent on the import side “fell short of our expectations, an anticipated 3.2 percent,” according to the report.

Weakness was mostly caused by a decrease in civil aircraft as well as a softening in automotive imports, which are still being hampered by supply chain problems.

Please click here for the Market News Updates from 3 Aug, 2022.

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