Markets in Turmoil: A Deep Dive into Thursday's Selloff and Friday’s Uncertain Horizon

The macroeconomic calendar on Thursday weighed heavily on the markets. In Australia, employment change was negative, with a decrease of 14.6 thousand, and the unemployment rate rose from 3.5% to 3.7%. This disappointing data from Australia added to the bearish sentiment that has pervaded markets globally.

As we head into Friday, the economic calendar is relatively light but holds a significant release with the UK retail sales numbers, which are expected to decline by 0.6%. This data may act as a catalyst for further market movements amid an already skittish atmosphere.

Moving over to the U.S., the Dow Jones Industrial Average on Thursday tested the critical horizontal support at 34,500 points. Traders are watching this level closely; if it fails to hold, further declines could be in store. In line with the broader market sell-off, the NASDAQ reached its lowest level since June 2023.

The currency markets are also experiencing significant volatility. The EURUSD is continuing its descent, while the USDJPY is indicating potential initial signs of a bearish correction. Notably, as Friday progresses, the JPY is emerging as the strongest currency, contrasting starkly with the weaknesses of the AUD and NZD, which have been persistently soft throughout the week.

In the commodities sphere, Gold remains in a precarious position below the critical $1,900 per ounce level. Oil, after rebounding from its significant resistance levels ($83 for WTI and $88 for Brent), continues to mirror the broader market's bearish sentiment.

As we conclude the week, the primary narrative is clear: bears are in control. Three days of steep declines from Tuesday through Thursday have effectively erased the gains from the first half of July. Friday brings uncertainty; while a breather may be due, there are scant signs of a significant turnaround as of yet. Traders will be keeping a close eye on key support and resistance levels and will be vigilant for signals that could indicate the market's next big move.