DOW JONES FUTURES SELL-OFF INTENSIFIES AMID RECESSION FEARS

American stock futures tumbled as concerns about the country’s economy continued. Dow Jones shed 375 points while the Nasdaq 100 and S&P 500 declined by more than 1.40%. It is estimated that investors have lost over $9 trillion. This decline is mostly because of the ongoing logistics challenges and the soaring inflation. In a statement on Wednesday, the Fed Chair said that the bank will continue with its hawkish policies in a bid to lower inflation. He also warned that a recession could happen during this process.

The FTSE 100 and the British pound declined sharply as investors reacted to the latest economic data from the UK. Sterling dropped by 0.50% against the US dollar while the FTSE 100 fell by about 2%. Data published by the Nationwide Society showed that home prices have started falling as mortgage rates rise. The house price index dropped from 0.9% in May to 0.3% in June. It fell from 11.2% to 10.% on an YoY basis. Additional data revealed that the country’s current account deficit soared to 51 billion pounds in Q1. This was the biggest increase ever recorded. The country’s economy also expanded by just 0.8% in Q1. Therefore, the BOE will find it challenging to hike rates in a period when the economy is contracting.

The Australian dollar moved sideways after the latest Chinese manufacturing and non-manufacturing PMI data. According to the government, the country’s manufacturing PMI rose slightly from 49.6 to 50.2 as the country continued to reopen following the recent lockdowns. The non-manufacturing PMI also recovered from 47.8 to 54.7. Therefore, there is a possibility that the Australian economy will see more demand in the coming months. Meanwhile, according to the Australian statistics agency, the housing and private sector credit rose to 0.6% and 0.8%, respectively.

AUDUSD

The AUDUSD pair moved sideways after the latest economic data from China. It is trading at 0.6880, where it has been in the past few days. It has moved slightly below the dots of the Parabolic SAR and the 25-day moving average. The Relative Strength Index (RSI) has moved to the neutral point at 42. Therefore, the pair will likely remain in this range ahead of next week’s RBA decision.

EURUSD

The EURUSD pair continued its remarkable sell-off as the US dollar strength continued. The pair dropped to a low of 1.0400, which was the lowest level since June 17. It has moved below the 25-day moving average. It has also dropped below the ascending trendline. At the same time, oscillators like the William % Range and the Relative Vigor Index (RVI) have continued dropping. The pair will likely continue falling in the coming days as bears target the parity level.

EURCHF

The EURCHF continued falling as the euro sell-off accelerated. It is trading at 0.9955, which was the lowest level since March this year. The pair is also slightly below the parity level of 1.00 and below all moving averages. Oscillators have also moved below the oversold level. Therefore, the pair will likely continue falling in the near term.