US Market Review 9th July 2021

by Charalambos Constantinides

Brent Futures have been rising since the bottom of the last significant downward move on March 24th 2021. The price reached new yearly highs on July 6th, before retreating below the already penetrated 161.8% Fibonacci extension level at 76.00 level. The 50 Day Moving Average (MA50) is crossed above the 100 Day Moving Average (MA100) indicating a bullish sentiment. The Relative Strength Index is also above the mid-50 level and still below the oversold 70 level sloping upwards, also indicating a bullish sentiment. The price is now at the 74.70 area after it fell to the 72.00 area this week.
For the bulls, important resistance levels exist at 77.83 dervied from the July 6th top, and also at 86.70 derived from the old top of October 4th 2018.
For the bears, important support points exist at 71.70 where the MA50 stands now, also at 70.00 inisde support top of May 18th, and finally at 68.50 where the MA100 is trending now.

From the U.S, there are no material stats to consider later in the day. The lack of stats will leave the markets to consider the latest set of minutes from the ECB and FED and updates on the Delta variant of the coronavirus, as well as G20 meetings comments. Important to pay attention to CAD Employment Change and Unemployment rate figures.

• United States equity markets extended losses on Thursday to close the trading session in the red zone. Most concerns revolved around rising COVID-19 cases globally and the threat of the Delta variant. The Olympics leadership announced that Summer Olympics in Tokyo will be held without spectators following Japan's declaration of the fourth state of emergency.
The Dow lost 0.75%, while the S&P 500 closed with 0.86% below the flatline. The Nasdaq 100 dropped 0.60%.

• The improvement in the U.S. labor market stalled again last week, as the number of people filing initial claims for jobless benefits edged up from a week earlier.
Labor Department data showed that initial jobless claims rose to 373,000, disappointing hopes for a new post-pandemic low of 350,000. Last week’s total was also revised up by 7,000 to 371,000. The numbers come at a time of growing concern that the U.S. economy’s rebound may be topping out, as favorable base effects fade and the spread of new variants of Covid-19 threatens to cause fresh havoc in parts of the country where vaccination rates have lagged.

• After several months of subdued increases in consumer credit, moments ago the Fed reported that in May, total consumer credit surged by the most on record, soaring by $35.28 billion, nearly double the consensus estimate of $18 billion and sharply higher from last months' $20.04 billion. The monthly increase was a whopping 10% SAAR, pushing the total to a new record high of $4.279 trillion.
What was behind the surge? Well, one month after we noted a surprising dip in credit card usage in April, in May Americans went all out, and splurged, pushing revolving credit, i.e., credit card debt, higher by a whopping $9.2 billion, the biggest monthly increase since December 2019, and pushing total revolving debt to $974.6 billion.

• Important Daily Events:

• At 12:30 (GMT) CAD Employment Change numbers are expected. This indicator is measuring the change in the number of employed people during the previous month.

• At 12:30 (GMT) CAD Unemployment Rate coming up. This indicator is measuring the Percentage of the total work force that is unemployed and actively seeking employment during the previous month.

• At 14:00 (GMT) US Final Wholesale Inventories m/m are also due. This indicator is showing the change in the total value of goods held in inventory by wholesalers.

• During the day, the Fed Monetary Policy Report is anticipated to come out at any time. The G20 meetings will also take place during the whole day. While it's not an institution, the G20 is an influential global policy-making body operating at the highest level, and their initiatives and policies can impact the currency markets.

US Indices Yesterday:

• Dow Jones -0.75%
• S&P 500 -0.86%
• Nasdaq -0.72%

Sources: Investing.com, forexfactory.com, fxempire.com, breakingthenews.net, zerohedge.com