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July 3, Wall Street short position tracking agency S3 Partners latest research report shows that despite the strong rebound of the US stock market after a 25% plunge this year, the short positions of the S&P 500 and Nasdaq 100 have continued to rise steadily this year. Researchers pointed out that this increase in short positions in sync with the rising market may reflect that investors are adopting a "contrarian strategy" - shorting at highs to hedge risks, or expressing doubts about the sustainability of the recovery. Specific data show that the proportion of short positions in the S&P 500 index to outstanding shares has climbed from 5.4% at the beginning of the year to above 5.8%, and the short position ratio of the Nasdaq 100 index has expanded from less than 5.2% to about 6.1%. It is worth noting that although the S&P 500 index has hit new highs recently, as of Wednesday, the cumulative increase this year is only 6%, far lower than the average increase of 15%-20% in major global markets. S3 specifically emphasized: "Among the major global stock indices, only a few have performed worse than the S&P 500 index, causing its increase to lag significantly behind the global average."Germanys final composite PMI for June was 50.4, in line with expectations and the previous value of 50.4.Germanys final services PMI for June was 49.7, in line with expectations of 49.4 and the previous value of 49.4.July 3, a survey released on Thursday showed that the French service industry showed signs of stabilization in June, with the pace of contraction of business activity falling to the lowest level in nine months. The final value of the HCOB French service industry PMI in June rose to 49.6 from 48.9 in May, indicating that activity in the industry decreased only slightly. The final value was higher than the initial value of 48.7 points. Jonas Feldhusen, a junior economist at Hamburg Commercial Bank, said the survey showed that new export orders grew and business confidence increased, although uncertainty about US President Trumps tariffs could weigh on market sentiment. Business confidence among French service providers improved significantly in June. Easing inflationary pressures and loose monetary policy will support household consumption and business investment in the coming year.Frances final composite PMI for June was 49.2, in line with expectations of 48.5 and the previous value of 48.5.

EUR/USD Hovers around 1.0540s as Bears Take a Breather

Daniel Rogers

May 07, 2022 10:14

The EUR/USD pared some of Thursday's losses and is poised to end the week on a positive note, snapping four straight weeks of losses despite a risk-averse financial market climate. At 1.0552, the EUR/USD is up 0.13 percentage points.

 

US markets have extended their losses for a second day in a row, indicating that sentiment is still negative. Earlier in the North American session, the US Department of Labor released April's Nonfarm Payrolls report, which indicated that the US economy added 428K jobs, which was higher than the 390K jobs that analysts had predicted. Leisure, hospitality, manufacturing, transportation, and warehousing led job growth.

 

The Unemployment Rate stayed constant at 3.6%, while Average Hourly Earnings increased by 5.5% y/y, a decrease from the previous month's figure of 5.6%.

 

According to sources cited by Reuters, "nothing in today's employment report would modify the Fed's predicted course" and "current market sentiment does not place much confidence in the Fed's ability to get inflation under control without a recession."

 

Analysts at ING wrote in a note that "the unemployment rate remained unchanged at 3.6 percent instead of falling to 3.5 percent as anticipated, which in combination with a softer average hourly earnings figure of 0.3 percent month-on-month rather than the 0.4 percent consensus forecast (and slower than the 0.5 percent gain in March) may be interpreted as a signal of less inflationary pressures in the labor market."

 

The US Dollar Index, a measure of the greenback's value against a basket of six currencies, is currently up 0.11 percent, standing at 103.664, while the 10-year US Treasury yield has touched a yearly high of 3.131 percent.

Technical Price Forecast for EUR/USD

From a daily chart standpoint, the EUR/USD exchange rate remains bearish. Despite Friday's favorable price action for the shared currency, the major remains susceptible to additional selling pressure, despite the efforts of ECB members to bolster the EUR.

 

The EUR/USD is neutrally bullish on the 1-hour time frame chart in the near future. The 50-hour simple moving average (HSMA) moved above the 200-hour simple moving average (HSMA), a bullish indicator, although the EUR/USD remains range-bound due to the nearly horizontal slope.

 

First upwards resistance for the EUR/USD would be the April 2017 peak near 1.0569. Breaking above would reveal Friday's daily peak, just shy of 1.0600, followed by the R1 daily pivot at 1.0620. On the downside, the 200-HSMA at 1.0550 would be the initial support for the EUR/USD. A breach of the latter would expose the swing low from February 2017 at 1.0494, the S1 daily pivot at 1.0470, and then 1.0450.

 

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