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Markets Are Waiting For U.S. Investors to Return After Long Independence Day Weekend

European stock markets were mixed on Monday with German DAX edged lower by 0.08% and British FTSE 100 up by 0.12%, futures on U.S stock indices were almost unchanged.

Neutral dynamics of stock indices was expected as the Independence Day was celebrated yesterday in the United States and stick exchanges were closed. Market were unable to move in either direction without U.S. investors. So, today we may see the true beginning of the week upon American liquidity would return to the market. And we may expect higher volatility today after the long weekend in the United States ahead of the FOMC minutes that is due to be released on Wednesday.

Retail trader may expect more trading opportunities, but also they should be cautious ahead of the FOMC minutes. In this regard any trading operations should likely to be closed by the end of the trading day as strong spikes during FOMC Minutes release could be expected.

The U.S. stock market may suffer high volatility too in regard to signals of tighter monetary policy by the Fed send last FOMC meeting, when S&P 500 stock index fell by 3% just in two days. This time situation looks better as S&P 500 index is holding above 4310 points and is likely to move to the resistance at 4440 points. In the alternative scenario the index may move below 4310 points with a possible further downside to the support level at 4220 points.

Crude market prices are consolidating around three-year highs with Brent crude prices hit $77.50 per barrel after OPEC+ failed to raise crude production quotas in August and by the end of 2021. So, we should not ignore the scenario of breaking through to the $80.80 per barrel.

Gold prices continue to recover to the upper margin of the trading range at $1750-1800 per troy ounce following weakening U.S. Dollar and falling 10-year U.S. Treasuries yields to 1.43%. We may expect gold prices to fain by Wednesday to $1800-1810 per ounce and would further depend from FOMC Minutes rhetoric.

FX market has no clear picture as EURUSD may slide lower to 1.15300, but no clear signs of such movement has been formed. As long as the pair is lower 1.19300 level basic is a downside scenario. But if the pair could hold itself firmly above this level it may have a chance of the upside movement to 1.20700 or even 1.21600, where sell positions would be interesting to consider.

GBPUSD has the potential to go lower to 1.37400. If the pair would reach 1.39700 or 1.40200, sell positions would be reasonable to open with the target at 1.37400.

The USDJPY is squeezed in-between two important levels. If the pair would surge to 112.00 it would be almost ideal to open sell positions with short term and midterm target at 109.75.