Forex Signals Brief for Aug 4: US Stocks Keep Dragging Markets Higher
Rowan Crosby • 2 min read
US Market Wrap
US equity markets once again were the leading trade yesterday. The NASDAQ put in yet another strong performance and is back trading at near-record highs.
The flight to quality has been apparent, during the latter half of the COVID saga and once again the big tech stocks are making the most of the sentiment. The moves were also helped yesterday, by a better than expected ISM Manufacturing print from the US, which is giving investors some hope.
Interestingly though, there was a little bit of decoupling between the risk-on trade in the major forex pairs and US equity markets. Which might suggest the likes of the EUR/USD and AUD/USD is running out of steam at the moment. Or perhaps the selling in Greenback is slowing down.
The Data Agenda
Data looks to be very thin today and there is likely not going to be much to watch on that front at all.
In Europe, there is only some second-tier data at best with Eurozone PPI and Spanish unemployment.
While in the US, we might get seme response to factory orders for June, although this is clearly a lagging indicator.
Later in the US session, we do get API inventories, which could impact WTI, in what is an otherwise quiet session ahead.
Forex Signal Update
The FX Leaders Team hit 3 winners from 6 trades yesterday, as we had a very busy Monday to get the week underway.
Gold – Pending Signal
GOLD looks like it is really coiling underneath this $1975 level and that could mean a big break to the upside. I am expecting a big move in either direction here very soon, so this is one to watch.
GBP/JPY – Pending Signal
The GBP/JPY has been drifting higher of recent times, however, we are seeing that 139.00 is a significant resistance level. We will be looking to short opportunities under that level.
Once again it is ETH that is doing a fair bit of the heavy lifting in the crypto space. Price is still flirting with $400, and only days ago we were having this same discussion when price was at $300.
At the same time, futures are trading with record volumes and when we see price taking out key levels on volume increases, that is often a very bullish sign.