Independence Day Calm: Market Volatility Hits a Low

The start of July on the market has been fairly calm, mostly due to the U.S. Independence Day celebrations that left Tuesday relatively quiet. This lull is particularly noticeable when looking at American indices, which have essentially stayed put.

In contrast, Europe paints a different picture. European indices began Wednesday with a slide, and if this trajectory continues, we could be facing a third consecutive bearish day. The conclusion of last week was marked by positivity, but the beginning of this week is shaping up to be a bit ominous. For instance, the DAX appears to be in the process of creating the top of the right shoulder of a head and shoulders pattern. If we see a breakout of 15700 points, we could be dealing with a strong long-term sell signal.

Moving over to the Forex market, the U.S. dollar is experiencing slight strengthening, resulting in a decline for EUR, while USDJPY is climbing marginally. At the moment, USD ranks among the strongest currencies in the bundle. Additionally, we’re seeing unusually low volatility in yen pairs, which are currently moving sideways.

Let’s switch gears and examine commodities. There’s an observable upswing for precious metals and oil. Nevertheless, the long-term sentiment for both remains negative.

Today’s economic calendar brings a couple of critical events for oil and the dollar, as well as the indices. These include the OPEC meetings and the release of FOMC meeting minutes, both of which could significantly influence the market. These announcements are expected to come later, at the end of the U.S. session. The day has already seen the release of the Caixin Services PMI from China, which came in lower than expected at 53.9. All in all, it’s a relatively quiet day in the market, but these events could spark some action.

Source: https://www.axiory.com/analytics/market-news/independence-day-calm-market-volatility-hits-a-low