Gold Rush Settles Down & GBP/JPY

GURU WISDOM

“If you don’t follow the stock market, you are missing some amazing drama.” –Mark Cuban
 

Gold < 1800

$1800 was a psychological resistance and so having passed it, now the level is being tested as support by the market. Renewed strength in the dollar was the principal cause for what is so far just a small pullback in a bull market.
 

USD Comeback

The dollar was a mirror image of gold, pulling back from a monthly low in what was mostly a technical rebound. EUR/USD too dropped back from 4-week highs while AUD/USD and NZD/USD dropped back from recent tops.
 

Trump’s finances

The turning point on Thursday seemed to come from the Supreme Court decision to allow a New York prosecutor access to the US President’s personal financial records. Trump famously never gave over his tax return in the 2016 Presidential election, breaking a longstanding tradition. The court did deny access to Congressional Democrats but details of Trump’s finances looks like they will see the light of day, possibly even before November’s election.
 

China Bull has horns

Better than hoped Chinese inflation data helped Chinese shares to another day of gains. It was a healthy combination of consumer prices falling to bolster consumption and producer prices deflating less, offering more stability for manufacturers. CPI was steady at 2.5% y/y, PPI edged up to-3% y/y.

The Shenzhen Component index was the outperformer, closing over 2%. That was despite a more cautious tone from state media that reminded investors that “Experience suggested that economic fundamentals were always the basis for changes in valuation, and only a long-term bull market could yield sustained profits.”

GBP/JPY has been trending higher in July but today formed a bearish engulfing pattern on the 4hr chart at a confluence of resistance including the 136 round number, the 50% retracement of its June decline and a series of old highs and lows.