Weekly Market Analysis: June 28 — July 4, 2020
The TradeConnect weekly financial market overview is now live. Don’t forget to download our app for direct access to each financial market.
Highlights:
- ZCash prints a new 4-month high.
- The U.S. dollar had a pretty slow week.
- The Mexican peso is notably weak right now.
- Stock indices remain vulnerable.
- Oil is trading sideways.
- Buyers are still controlling the gold market.
Crypto
While most of the big cryptos are still trapped in range-bound market conditions, ZCash smashed through a month-long consolidation on Tuesday, 23 June, ending the day in the 57.80 region. ZCash is the most bullish of the main cryptos at the moment, with a good performance since mid-March.
Although Ethereum is also stuck in a range, it also appears to be relatively strong compared to most other cryptocurrencies. On the other hand, EOS and Dash are some of the weaker cryptocurrencies at the moment.
Many cryptocurrencies are trading sideways or lower.
Forex
The U.S. dollar declined early last week, only to recover most of those losses between Wednesday and Friday. Overall, it was a pretty flat week for the Greenback.
Other currencies also experienced some whipsaw last week. The British pound had a good start to the week but got hurt in the latter part. The GBP/USD may offer some good short (sell) opportunities in the weeks ahead, especially if the U.S. dollar strengthens due to risk aversion.
Traders who like emerging market currencies can check out the USD/MXN. The Mexican peso (MXN) weakened against the U.S. dollar last week, in a week that the dollar traded lower against most of the major currencies and also the South African rand, which is also an emerging market currency like the peso. This highlights a definite underlying weakness in the Mexican peso which could persist in the week(s) to come.
Economic News
This Friday is Independence Day in the U.S, so the U.S. employment change numbers and the unemployment rate will be released on Thursday instead of Friday. This event can trigger substantial market volatility, so keep an eye on this if you have any open trades.
Other important economic news events include the UK GDP numbers on Tuesday and the U.S. FOMC Meeting Minutes on Wednesday.
Stock Indices
The S&P 500 tried to break higher last week, only to be pulled down towards the end of the week, ending the week in the red. Most other global indices felt less pain than the S&P 500 but the general outlook for indices is grim at the moment.
On many of the index daily charts, we notice candles with wicks protruding to the upside. This could be an early warning of further index declines in the weeks ahead.
Energy
Although oil prices are moving sideways at the moment, the general direction is higher. It doesn’t seem like we’ll see aggressive buying pressure in the next two weeks, but with oil, you never know.
At this moment, both WTI and Brent crude are holding above their 20-EMAs on the daily charts, which is encouraging for bullish market players. However, during the last couple of weeks, the bearish pullbacks have become steeper, which is a warning to buyers.
Precious Metals
When stocks are not performing great, gold is generally expected to do well. This is the case at the moment, with gold performing exceptionally well, closing the week at very close to $1,770 an ounce.
Gold is a good safe-haven asset and if investor sentiment sinks lower in the weeks to come, gold could be one of the more buoyant assets in the market.
Conclusion
- Most cryptos are still trading sideways or lower.
- The British pound and Mexican peso are vulnerable to decline further.
- Global indices still look negative.
- Oil prices are holding up well but as we mentioned last week, the bullish move seems to be somewhat exhausted.
- Gold is doing really well at the moment, despite being quite expensive.
