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KostiaForexMart

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  1. On the verge of inflation: how the Dow Jones and S&P reacted for the third session in a row On Tuesday, amid expectations of important economic releases during the short holiday week, US stock markets fell, marking the third consecutive decline for the Dow Jones and Standard & Poor's 500 indexes. Investors are in a wait-and-see mood as they analyze potential changes in Federal Reserve policy. Tesla (TSLA.O) rose 2.92% on CEO Elon Musk's announcement that he would test self-driving technology for the company's vehicles, available to both new and existing customers in the United States. Over the current week, the stock price has increased by about 4%, although during the year their quotes have decreased by more than 28%. Market participants are particularly focused on the Personal Consumption Expenditures (PCE) price index, the Federal Reserve's main tool for assessing inflation. It is expected that the latest data on this indicator will be published on Friday, a day when trading on American exchanges will not be held due to the celebration of Good Friday. It is predicted that in February the inflation index will increase by 0.4%, reaching 2.5% at the annual level. Meanwhile, core inflation, which excludes volatile items such as food and energy, is expected to rise 0.3% for the month, keeping annual growth at 2.8%, according to expert forecasts. "Friday is key. All attention will be focused on this day, and any events before then will be perceived as background. Therefore, we should not expect significant changes in the market until the data is published," said Stephen Massocca, deputy president of Wedbush Securities. San Francisco. "It would be extremely risky for the market if there were any speculation that Fed rates have not yet peaked. Any hint from the Fed that interest rates could be raised further could signal an immediate shift away from risk assets." The U.S. economic sector is growing, with February orders for durable goods exceeding forecasts and equipment investment pointing to the start of a recovery. According to the Conference Board, consumer confidence remained virtually unchanged in March at 104.7. The Dow Jones Industrial Average lost 31.31 points, down 0.08%, to 39,282.33. The S&P 500 was down 14.61 points (down 0.28%) at 5,203.58, while the Nasdaq Composite was down 68.77 points (down 0.42%) at 16. 315.70. Last week, all three major US indexes hit new all-time highs after the Federal Reserve confirmed its forecasts for three interest rate cuts this year. Market expectations for the Fed to cut rates by at least 25 basis points in June continue to rise, now reaching 70.4% probability according to CME's FedWatch tool, up markedly from last week's 59.2%. Shares of the media and technology group linked to Donald Trump rose 16.1% to close at $57.99 after temporarily hitting $79.38 on the first day of trading following its reverse merger with the company. , specializing in the issue of securities. McCormick (MKC.N) jumped 10.52% to become the top gainer in the S&P 500, as its first-quarter sales and earnings beat market expectations. Shares of Seagate Technology (STX.O) also posted strong gains, rising 7.38%, after analysts at Morgan Stanley upgraded the hard drive maker's stock from overweight to overweight. At the same time, United Parcel Service (UPS.N) shares lost 8.16% following the release of the company's 2026 guidance. On the New York Stock Exchange, decliners outnumbered advancers by a 1.24-to-1 ratio. A similar trend was seen on the Nasdaq, where decliners outnumbered advancers by a 1.34-to-1 ratio. Trading volume in US stock markets reached 10.43 billion shares, less than the average volume of 12.23 billion shares over the past 20 sessions. Trading activity is expected to remain moderate throughout the current week, and as the holidays approach, volumes may decline further. The pan-European stock index STOXX 600 gained 0.24%, while MSCI's index of Asia-Pacific shares ex-Japan closed 0.25% higher at 535.59. Market attention is focused on the Japanese yen, which remains at its weakest against the dollar since 1990 despite the Bank of Japan raising interest rates last week for the first time in 17 years. The dollar strengthened 0.1% against the yen to hit 151.56, raising the risk of Japanese intervention to prevent further weakening of its currency. In October 2022, the dollar/yen exchange rate rose to 151.94, followed by a decline due to intervention. Japanese Finance Minister Shunichi Suzuki on Tuesday expressed readiness to consider options to stabilize the yen, reiterating statements made the day before by the country's top monetary policy official. The US dollar was marginally weaker, down 0.06% at 7.248 against the offshore Chinese yuan, which strengthened thanks to an unexpectedly high trading range setting. The yuan's fall the previous Friday, after a period of market volatility, had sparked concern among investors, with some speculation that China could loosen controls on its currency, allowing it to fall. Spot gold rose 0.24% to $2,176.69 an ounce, while U.S. gold futures rose 0.09% to $2,176.80 an ounce. In the cryptocurrency space, Bitcoin lost 1.74% to $69,753.73, while Ethereum fell 1.55% to $3,572.7.
  2. The main events by the morning: March 26 Bitcoin has returned to the area above $71 thousand. A day earlier, investment guru Jim Roger said that the cryptocurrency would collapse to zero. He does not see any long-term value in it, believing that the crypt will disappear. The United States has imposed sanctions against Russian operators of CFA and blockchain services. In the list: Atomize, Lighthouse, Distributed Registry Systems, Web3 Tech, B-Crypto, Netexchange, Masterchain. The Cabinet of Ministers of Russia ordered the sale of 27.5% in the Sakhalin-2 operator company for 95 billion rubles. Gazprom's daughter Sakhalin Project will buy a share, TASS reports. France may come into direct conflict with Russia in the event of the defeat of the Armed Forces of Ukraine. The LCI channel claims that there are several scenarios for the entry of French troops into the territory of Ukraine, including the deployment of NATO troops in fortified areas and trenches of the Armed Forces of Ukraine, as well as the possible construction of a military plant in Kiev or the deployment of troops in Odessa. Hamas has confirmed its unwillingness to make concessions. According to Reuters, the Palestinian movement informed the mediators that it would insist on a complete ceasefire in the Gaza Strip, as well as demanding the complete withdrawal of the Israeli military from the region and a «real exchange» of prisoners of war. The March package of assistance to Ukraine from the United States in the amount of $300 million was used back in November. According to Politico, a representative of the American administration said that these funds are currently «not available for use,» and the approval of assistance was rather a symbolic gesture.
  3. Changes to the trading schedule – March/April 2024 We’d like to inform you that due to public holidays celebrated in March/beginning of April, there will be changes to the trading schedule. Please refer to the table attached on the site to see all the changes and plan your activities accordingly.
  4. Wall Street's decline driven by tech sector and Fed rates The global stock index also showed a decrease on Friday, setting a course for a weekly decline after seven consecutive weeks of gains, while the dollar strengthened, heading for its most significant weekly gain since mid-January as the latest US inflation data fueled new hopes for interest rate cuts. Data released on Friday showed a slight increase in US import prices in February, as the rise in the cost of petroleum products was partially offset by modest growth in other areas, suggesting an improvement in the inflationary landscape. Stocks this week faced challenges after US consumer and producer price data indicated that inflation remains persistent, dampening expectations that the Federal Reserve would cut rates by its June meeting. Market assessments of a Fed rate cut of at least 25 basis points in June stand at 59.2%, down from 59.5% in the previous session and 73.3% a week ago, according to CME's FedWatch Tool. The central bank is expected to maintain interest rates at its meeting next week, but investors will closely monitor the central bank's economic forecasts, including interest rate projections. On Wall Street, the Dow Jones Industrial Average (.DJI) fell by 190.89 points, or 0.49%, to 38,714.77, the S&P 500 (.SPX) lost 33.53 points, or 0.65%, to 5,116.95, and the Nasdaq Composite (.IXIC) dropped 155.35 points, or 0.96%, to 15,973.17. Over the week, the S&P 500 lost 0.13%, the Dow dropped 0.02%, and the Nasdaq decreased by 0.73%. Additionally, a study by the University of Michigan showed its preliminary consumer sentiment and inflation expectations data barely changed in March, while a separate report indicated that US factory production in February increased more than expected. Adobe (ADBE.O) shares fell by 13.7% the day after the company forecasted second-quarter revenue below analysts' estimates, citing competition and weak demand for photos, illustrations, and videos integrated with artificial intelligence. Among other declining stocks, Ulta Beauty (ULTA.O) shares fell by 5.2% after its projected annual profit came in below Wall Street estimates, as rising supply chain costs and intensified promotional activities negatively impacted its profits. The S&P 500 technology index (.SPLRCT) dropped by 1.3% for the day, leading the downturn among sectors. Shares of Microsoft (MSFT.O) fell by 2.1%, marking one of the index's most significant declines. The semiconductor index (.SOX) decreased by 0.5% on Friday, registering its most significant weekly percentage drop since the beginning of January. Announcements related to AI at Nvidia's (NVDA.O) GTC developers conference, scheduled for March 18-21, will be closely watched. The Russell 2000 index of small-cap companies (.RUT) fell by 2.1% for the week. Friday's volume was the highest of the year on US exchanges, with 18.76 billion shares traded. The average full-session volume over the last 20 trading days was about 12.4 billion. Although Wall Street's AI-driven growth has stalled, the S&P 500 index has continued to rise by 7.3% since the beginning of the year. According to data released on Friday, US factory production in February grew more than expected, but the January figure was sharply revised downwards, as production continues to be constrained by higher interest rates. The dollar index gained 0.05% to 103.43, recovering some of the previous week's decline with a 0.71% increase, while the euro rose 0.06% to $1.0889 for the session. The sterling weakened by 0.13% to $1.273. Against the Japanese yen, the dollar strengthened by 0.49% to 149.05, despite expectations that the Bank of Japan is expected to end its negative interest rate policy at its meeting next week. The MSCI global stock index (.MIWD00000PUS) fell by 5.07 points, or 0.66%, to 767.58, heading for its third consecutive daily drop, the longest streak since the beginning of the year, and a 0.48% decrease for the week. The STOXX 600 index (.STOXX) closed down by 0.32%, while the broader European index FTSEurofirst 300 (.FTEU3) fell by 7.42 points, or 0.37%. The yield on benchmark 10-year US Treasury bonds rose by 1 basis point to 4.308% after reaching 4.322%, the highest level since February 23. The yield on 10-year bonds this week jumped by 22 b.p., the most significant increase since mid-October. The yield on 2-year Treasury bonds, which typically moves in step with interest rate expectations, rose by 3.9 basis points to 4.7297% and increased by 24.6 b.p. for the week, marking the biggest jump in two months. Oil prices fell a day after exceeding the $85 per barrel mark for the first time since November. Oil indices finished the week with a growth of more than 3%. U.S. crude oil decreased by 0.27% to $81.04 per barrel, and Brent crude fell by 0.09% to $85.34 per barrel.
  5. US election: Wall Street at a crossroads The S&P 500 and Nasdaq indices ended the trading session in the negative on Friday, retreating from the record highs reached during the day. This decline occurred against the backdrop of a decline in the sector of chip manufacturers and mixed data on the labor market, reflecting the exceeding of expectations for the number of jobs created while the unemployment rate rose. During the trading session, the S&P 500 and Nasdaq indices briefly hit all-time highs, but by evening their dynamics changed to decline. The Philadelphia Semiconductor Index (.SOX) experienced a noticeable drop, losing 4% by the close of the day after earlier reaching the day's high. Shares of Nvidia (NVDA.O), highly regarded in the market for its contributions to the development of chips for artificial intelligence, suffered a 5.6% loss, ending their six consecutive sessions of gains. This was despite the fact that they were up more than 5% in early trading. Broadcom (AVGO.O) shares in the chipmaker index also experienced a significant decline of 7%, driven by low investor expectations for the company's full-year outlook. In addition, Marvell Technology (MRVL.O) lost 11.4% in value after its first-quarter guidance fell short of market expectations due to weaker demand. The stock posted gains at the open after data showed that U.S. job growth accelerated in February, with job openings in the nonfarm payroll sector rising by 275,000, exceeding analysts' forecasts for a gain of 200,000. At the same time, the January jobs data was downwardly revised. There is also an increase in the unemployment rate in February to 3.9% compared to the previous figure of 3.7%, which was maintained for three months. It should be noted that the rate of wage growth fell to 0.1% on a month-over-month basis. Brian Price, head of investment management at Commonwealth Financial Network, highlighted a trend toward more restrained spending on the part of consumers. This is reflected in shares of Costco Wholesale (COST.O), which posted a 7.6% decline as its quarterly sales volumes fell short of expectations due to moderate demand for higher-priced goods. Nevertheless, Price emphasized that overall market sentiment remains optimistic with the anticipation of continued growth in the absence of any negative factors. He expressed his belief that the market is focused on the continuation of the favorable situation: inflation is expected to be maintained at a moderate level and the Federal Reserve is expected to initiate a policy of easing economic conditions. Upcoming data for February, which will be released next week and include information on the consumer price index (CPI) and retail sales, will provide additional information that could influence the assessment of the possibility of lowering interest rates. In a speech on Thursday, Jerome Powell, chairman of the Federal Reserve, shared his view that the central bank is nearing the point where it is confident enough that inflation is falling, allowing it to begin the process of lowering interest rates. While investors continue to analyze possible profits and keep an eye on monetary policy, they are also beginning to consider a new factor that could significantly impact market conditions this year - the upcoming U.S. presidential election in 2024. In an address to the nation on Thursday, US President Joe Biden put forward a proposal to raise corporate taxes, while his predecessor and potential Republican Party rival, Donald Trump, earlier in 2017 passed legislation aimed at cutting taxes for companies and the wealthy. Biden also expressed pride in U.S. economic achievements during his presidency. It is difficult to determine how politicians' proposals and initiatives ahead of the election will affect asset market prices. The winner of the election is likely to face the challenge of dealing with a divided Congress, which could significantly complicate any legislative initiatives. This uncertainty does not stop analysts from trying to assess how political changes may interact with other key elements influencing market dynamics. Such factors include increasing interest in the business outlook for artificial intelligence and adjusting expectations about when the Federal Reserve might begin easing monetary policy. The S&P 500 Index (.SPX) has made notable gains, up 7.4% YTD and near all-time highs. Polls show a tight contest between the 81-year-old Biden and 77-year-old Trump. Despite the U.S. economy performing better than most advanced economies, the American people generally express higher confidence in Trump's economic competence in polls. As part of his speech on Thursday, Biden unveiled an initiative to impose a 21% minimum tax on the profits of corporations whose revenues exceed $1 billion, building on the provisions of the 2022 Clean Energy Act. In addition, he expressed his intention to reinstate his "billionaires tax" initiative, which would impose a minimum tax of 25% on the income of U.S. citizens whose wealth exceeds $100 million. Analysts note that the Republicans' success in the elections is likely to entail an extension of the 2017 tax cuts, which could lead to higher inflation. At the same time, the Democrats' victory will result in an increase in tax rates for households and corporations with high income. The Dow Jones Industrial Average (.DJI) index of industrial companies closed down 68.66 points, or 0.18%, stopping at 38,722.69. The S&P 500 Index (.SPX) fell 33.67 points, or 0.65%, to settle at 5,123.69, while the Nasdaq Composite (.IXIC) fell 188.26 points, or 1.16%, to 16,085.11. Among the 11 key sectors in the S&P 500, the technology sector (.SPLRCT) posted the largest decline, losing 1.8%. It was followed by the consumer staples sector (.SPLRCS) with a 0.8% drop, where Costco made a significant contribution. Over the past week, the S&P 500 Index declined 0.26%, the Nasdaq fell 1.17%, and the Dow Jones lost 0.93%. Meanwhile, real estate stocks (.SPLRCR) were the biggest gainers, rising 1.1%. Behind them are shares of energy companies (.SPNY), which grew by 0.4%. Shares of Gap (GPS.N) jumped 8.2% as the retailer beat Wall Street analysts' forecasts for fourth-quarter results. That was due to increased demand for a revamped assortment of Old Navy and Gap-branded merchandise during the holiday season, as well as lower volumes of discounted merchandise. On the New York Stock Exchange, the number of stocks that increased in value outnumbered those that declined by a ratio of 1.25 to 1, with 708 new highs versus 48 new lows. On the Nasdaq exchange, the number of stocks that increased totaled 2,086, while 2,192 declined, showing a predominance of declining over rising stocks with a ratio of about 1.05 to 1. The S&P 500 index marked 65 new 52-week highs and recorded no new lows, while the Nasdaq recorded 351 new highs and 83 new lows. Trading volume on U.S. exchanges reached 12.29 billion shares, which compares with an average of 12.08 billion over the past 20 sessions.
  6. Keynote speech by Fed Chairman Jerome Powell The euro and the British pound continue to strengthen against the US dollar amid weak fundamental statistics coming from the United States recently. However, today we are anticipating a more interesting event: a speech by the Federal Reserve Chairman on Capitol Hill. Today marks the first of two speeches before Congress. Powell will first speak at the House Financial Services Committee and then repeat a similar speech at the Senate Banking Committee tomorrow. It is expected that legislators will pose a number of important questions to him, concerning not only the economy and monetary policy but also the operation of the banking system. The discussion will include the widely criticized proposal by the Federal Reserve to increase capital requirements for large banks. However, the cost of borrowing will also be an important issue on the agenda. Since July 2023, the Fed has maintained interest rates at their highest level in the last two decades, making access to credit increasingly difficult for many Americans. This affects purchases of homes and cars, not to mention servicing credit card debt. Lately, Democrats have sharply criticized Powell's actions. Senators Sherrod Brown and Elizabeth Warren have called on the Fed's head to lower interest rates soon, arguing that there is no longer a need for such a strict approach. Although recent inflation data suggest otherwise, many dovish policymakers consider the inflation spike to be temporary. It is clear that even against the backdrop of slowing economic growth, the Fed is in no hurry to make changes to interest rates. The labor market remains strong, and the monthly inflation rate in January this year was much higher than economists' expectations. Persistent concerns about price pressure have rallied central bank representatives who are convinced that additional evidence is needed that inflation is firmly moving towards the 2% target before starting a cycle of lowering interest rates. Some experts note that the longer the Fed delays the rate cut, the higher the chances that they will be lowered by the November presidential elections, which are almost certain to be a rematch between President Joe Biden and former President Donald Trump. While Fed representatives have repeatedly stressed that their decisions were independent of politics, lowering interest rates closer to election day could lead to sharp criticism of the Central Bank's work from Trump and the Republicans. Obviously, lowering rates at the time of presidential elections would benefit the Democrats and Biden, which they will surely take advantage of. As for the euro/dollar pair, demand for the euro persists after a series of weak statistics from the US. Now, bulls need to think about how to push the price to 1.0875. This will allow them to test 1.0900. From there, the pair may reach 1.0930, but doing so without support from major players will be quite challenging. The next target is the peak of 1.0965. If the trading instrument declines to 1.0835, I expect some serious actions from major buyers. If they do not take action, it would be wise to wait for the pair to hit the low of 1.0790, or to open long positions from 1.0760. As for the pound/dollar pair, bulls need to drag the price to the nearest resistance at 1.2730 to start an uptrend. This will allow them to target 1.2770, above which it will be quite difficult to break through. The next target is the area of 1.2800, after which we can talk about a more rapid surge to 1.2830. In case of a decline, bears will try to take control over 1.2690. If they succeed, breaking through this range may push the pair towards the low of 1.2660 with the perspective of reaching 1.2630. More analytics on our website: https://bit.ly/3VobLUv
  7. 2025: Gold and oil raise rates In Asian markets on Tuesday, gold prices remained within a narrow range amid fears of long-term interest rate hikes. The absence of trading signals was also due to a holiday in the American market. Gold demonstrated some strengthening, reaching the $2000 per ounce mark after recovering from a two-month low over the last two trading sessions. However, current fluctuations in gold prices are still occurring within the range of $2,000-$2,050, which was established for the majority of 2024. Spot gold prices increased slightly by 0.1% to $2,019.17 per ounce, while the price of gold futures expiring in April settled at $2,030.20 per ounce as of 23:34 Eastern Time. Analysts from Citibank highlight three main catalysts that could push gold prices to $3000 per ounce and oil to $100 per barrel in the next 12-18 months. Among them are a sharp increase in gold purchases by central banks, stagflation, and a deep global recession. Currently, gold is trading around the $2016 mark and could rise by approximately 50% in the event of any of these scenarios materializing. Analysts point to dedollarization in central banks of developing countries as the most likely path to reaching $3000 per ounce of gold. This would lead to a doubling of gold purchases by central banks and shift the focus of demand from jewelry to gold as the main driver. Central bank gold purchases have reached record levels in recent years, aiming to diversify their reserves and reduce credit risk. Leading this trend are the central banks of China and Russia, as well as India, Turkey, and Brazil, actively increasing their gold bullion purchases. According to the World Gold Council, global central banks have maintained a level of net gold purchases exceeding 1000 tons for two consecutive years. In the context of a global recession, a deep economic downturn could force the United States Federal Reserve to drastically cut rates, which, in turn, could be the reason for gold prices to rise to $3000. Gold traditionally exhibits an inverse correlation with interest rates, becoming a more attractive asset compared to fixed income in a low-rate environment. Stagflation, combining high inflation with economic slowdown and rising unemployment, could also trigger a rise in gold prices, despite the low likelihood of such a scenario. Gold is perceived as a safe haven in periods of economic instability, attracting investors looking to avoid risks. In addition to the above factors, Citi suggests that the baseline scenario for gold involves reaching a price of $2150 per ounce in the second half of 2024, with an expected average price just over $2000 per ounce in the first half of the year. Record prices may be achieved by the end of 2024. Although geopolitical tensions in the Middle East provide support for gold prices, a more significant price increase is restrained by the prospect of long-term interest rate hikes in the US. Traders are lowering expectations regarding the Federal Reserve's imminent rate cuts following reports of high inflation in the US, and statements from Fed officials reinforce assumptions about maintaining high interest rates over a longer period. The outlook for gold in the near future remains uncertain, similar to the situation in the market for other precious metals. Prices for platinum and silver show a decline, and copper experiences a slight drop in price, despite a reduction in the base interest rate in China, the largest importer of the metal. In the context of the oil market, analysts consider a scenario where oil prices could once again reach $100 per barrel, considering risks associated with geopolitical tensions, actions by OPEC+, and possible supply disruptions from key oil-producing regions. Tensions in the Middle East, particularly the conflict between Israel and Hamas, and increasing tension on the border between Israel and Lebanon highlight potential risks for oil suppliers in the OPEC+ region.
  8. XAU/USD: review and analysis The positive factor for raw materials currently lies in the fact that the dollar bulls are awaiting important economic events regarding the path and timing of the Federal Reserve's interest rate reduction. This week, the FOMC minutes will be published, which is expected to contribute to some impulse in the precious metal. Also, a decent increase in Treasury bond yields provides some support for the U.S. dollar and limits the rise of the non-yielding yellow metal. In addition, the overall positive tone in the stock markets contributes to restraining the global increase in the price of gold. And since yesterday was a holiday in the United States, there were no significant movements in the markets. From a technical point of view, any upward movement is likely to encounter some resistance near the $2,030 level, where the 50-day SMA is located, with subsequent testing. If this level is decisively surpassed, it will create a foundation for further growth beyond the intermediate barrier at $2,044–2,045 towards the supply zone at $2,065. On the other hand, the 100-day SMA, currently around $1,992–1,991, may act as immediate support before the $1,983 region or the two-month low reached on Wednesday. Following this is the 200-day SMA, currently tied to the $1,965 area, and in the case of a decisive breakthrough, it will be considered a new trigger for the bears. After that, gold may accelerate its decline to the November 2023 low, with some obstacles along this path.
  9. Inflationary explosion in the US: how do the dollar and bonds react? The consequences of high inflation are felt across the financial market. Specifically, the main Wall Street indices reacted to this news with a decrease after the publication of data indicating a higher than expected rise in consumer prices. This event pressured the expectations regarding the imminent lowering of interest rates, which in turn led to an increase in the yield of US Treasury bonds. Among other things, the Dow Jones Industrial Average recorded its most significant drop in almost 11 months after the US Department of Labor's report showed an unexpected increase in consumer prices in January, especially due to the rise in housing costs. Against this backdrop, market indices, which were on the rise in anticipation that the Federal Reserve System (FRS) would begin to lower rates as early as May, showed negative dynamics. The S&P 500 index, for example, closed above the 5000 point mark for the first time, and the Dow Jones index traded near record-high values. However, the publication of inflation data revised expectations regarding the FRS's policy, increasing the likelihood that rate cuts may not occur until June. Mega-cap companies sensitive to rates, such as Microsoft, Alphabet, Amazon.com, and Meta Platforms, showed a decrease in stock prices amid the rise in yields of US Treasury bonds to a two-month high. A similar situation was observed among chip manufacturers, including Micron Technology, Qualcomm, and Broadcom, which led to a 2% drop in the Philadelphia SE Semiconductor index. The real estate, consumer discretionary, and utilities sectors faced the most significant losses among the 11 major industry indices of the S&P 500, especially real estate, which reached its lowest values in more than two months. Small-cap companies also felt the pressure, with the Russell 2000 index showing the most significant daily drop since June 2022. "Various statements by Federal Reserve System officials in recent weeks have indicated that the market-anticipated rate cuts in the first half of the year might have been premature. The latest consumer price index data certainly confirms this trend," commented Bob Elliott from Unlimited Funds. The consumer inflation data followed a modest revision of inflation figures for the last quarter of 2023, giving investors temporary relief regarding inflation expectations. The Cboe Volatility Index reached its highest level since November, highlighting the growing market concern. The S&P 500 and Nasdaq Composite indices lost 1.37% and 1.79% respectively, while the Dow Jones Industrial Average fell by 1.36%, marking its most significant decline since March 2023. Among other developments, JetBlue Airways shares surged by 21.6% after Carl Icahn disclosed his stake in the company, calling the shares "undervalued." Arista Networks' shares declined by 5.5% following a gross profit forecast below expectations, and Marriott International lost value after forecasting annual earnings below analyst expectations. Cadence Design Systems and toy manufacturer Hasbro also faced a drop in share value after publishing gloomy forecasts. Meanwhile, Tripadvisor shares jumped by 13.8% following the announcement of the creation of a special committee to review deal proposals. The total trading volume on US exchanges reached 12.9 billion shares, comparable to the average of the last 20 sessions at 11.71 billion shares. The US stock market continues to demonstrate record levels, supported by leading technology companies and expectations of Federal Reserve rate cuts. The global stock index MSCI and the Stoxx 600 European index also showed a decline amid current events. The dollar index reached a three-month high, and bitcoin set a new record since December 2021, despite subsequent declines. Data on US retail sales and the producer price report are expected shortly, which may further influence market sentiments. The rise in oil prices continues amid tensions in the Middle East and Eastern Europe, with Brent crude futures and West Texas Intermediate showing significant increases. Meanwhile, gold prices fell below the key level of $2000 per ounce after the CPI data was released, reaching a two-month low.
  10. GBP/USD: Pound slightly weakens, but selling still risky as dollar remains weak The pound-dollar pair surged by more than 200 points yesterday, reacting to the publication of inflation growth data in the United States. The resonant release put an end to discussions about the Federal Reserve's future steps—at least in the context of the December meeting. The probability of the Fed raising interest rates in December decreased to 5%, meaning the market is almost certain that the U.S. regulator will maintain the status quo next month. The inflation report played the role of a cold shower for dollar bulls. Last week, Federal Reserve representatives, including Chairman Jerome Powell, thoroughly heated the public with their hawkish statements, so the sharp shift in sentiment significantly impacted the greenback. The U.S. Dollar Index dropped from 105.60 to 103.80 in just a few hours, reflecting the anti-rally of the American currency. The GBP/USD pair did not stay on the sidelines and updated a two-month price high, testing the 1.2500 level for the first time since September. But, as they say, "not everything is rosy." The pound rested on its laurels only briefly, as inflation data in the United Kingdom were also published following the U.S. report. It can be said that today, GBP/USD buyers also experienced a cold shower, as almost all components of the UK data were in the red. Certain conclusions can be drawn here as well, primarily regarding the prospects of tightening monetary policy by the Bank of England. These conclusions do not favor the pound as they suggest the central bank will maintain the status quo after the upcoming meetings. For instance, the overall Consumer Price Index in the UK sharply dropped to zero month-on-month (forecasted to decline to 0.1%) after two consecutive months of growth (0.5% in September). In the year-on-year calculation, the overall index also ended up in the red, reaching 4.6% (forecast at 4.8%)—the weakest growth rate since October 2021. For comparison, the overall CPI was at 6.7% YoY in September. A separate line needs to be drawn for the core Consumer Price Index, excluding energy and food prices. In June and July, it was at 6.9%, but it dropped to 6.2% in August. In September, the indicator again demonstrated a downward trend (6.1%), as well as in October—5.7% (while most experts predicted a decline to 6.0%). This is the lowest value of the indicator since March 2022. The Retail Price Index, used by British employers in salary negotiations, similarly ended up in the red zone: -0.2% MoM (forecasted to grow by 0.1% MoM) and 6.1% YoY (forecasted to grow to 6.3%)—a two-year low, the weakest growth rate of the indicator since October 2021. However, some components of the data entered the green zone but remained in the negative territory. For example, the Producer Purchase Price Index in the year-on-year calculation rose to -2.6% (forecast at -3.3%), and the Producer Selling Price Index reached -0.6% YoY (forecasted to decline to -1.0% YoY). Commenting on the published report, the chief economist of the Office for National Statistics stated that the decline in inflation occurred against the backdrop of falling energy prices. According to him, the downward trend in key indicators is associated with the decrease this month in the maximum level of energy prices, which limits the amount that suppliers can charge consumers per unit of energy. The sharp decline in inflation in the United Kingdom is a significant blow to the positions of the British currency. However, an interesting situation has developed for the GBP/USD pair: the dollar is knocked out after yesterday's release, and the pound is knocked down after today's news. Sellers of the pair managed to muffle the upward impulse but failed to turn the situation in their favor. At the moment, it is challenging to say whether sellers of GBP/USD will be able to reverse the trend. Despite the weak positions of the pound, the pair may resume its upward movement due to further weakening of the American currency. The disappointment of the dollar bulls is too great: just last week, Powell stated that the current level of the Fed's rate might be "insufficient" to curb inflation. However, after the publication of CPI growth data in October, his words lost their relevance. Therefore, rushing to sell GBP/USD now may not be advisable—after a short pause, buyers may regain the initiative in the pair. From a technical perspective, the pair is currently testing the support level of 1.2450 (the upper line of the Bollinger Bands indicator on the daily chart). In this price range, the downward pullback has stalled. This is another signal indicating the unreliability of short positions. It is advisable to consider selling only after sellers firmly establish themselves below the 1.2450 target—in this case, the next price target will be the level of 1.2340 (the Tenkan-sen line on D1).
  11. Trading Signals for GOLD (XAU/USD) for October 20-23, 2023: sell below $1,980 (21 SMA - double top) Early in the European session, gold is trading around 1,977.41, above the 21 SMA, and below the 8/8 Murray. Gold reached a new high around 1,982.12 and is showing indecision which is likely to trigger a strong technical correction in the coming hours. Since October 4, gold has been trading within an uptrend channel and has now reached the top of this channel, which means that a technical correction could occur in the next few hours with the target in the area of 1,944 (21 SMA). Yesterday, during a speech by the Fed Chairman, expectations were generated that the Fed would not raise interest rates anymore. This fueled the demand for gold as a safe haven asset reaching a new high. As investors do not expect any further interest rate hikes this year, gold could continue to rise. However, we should expect a technical correction to occur as long as gold trades below the psychological level of $2,000. A good level to buy could be around 1,944 (21SMA) or around 6/8 Murray at 1,937. Both levels could give us the opportunity to buy again with goals at the psychological level of $2,000. On the other hand, if XAU/USD continues to rise and reaches the 8/8 Murray level around $2,000 in the next few hours, it could face strong rejection. This 8/8 area acts as strong resistance and a key level. We could use the pullback to sell below this area with the target at 1,937. The eagle indicator once again reached the extremely overbought zone. So, we expect a technical correction to occur in the next few hours. Hence, our strategy could be to sell below 1,980 with targets at 1,962 and 1,944.
  12. EUR/USD: Short-term rise and bearish outlook. Markets eye Fed meeting Traders are showing a renewed appetite for the euro at the start of this week. However, it is essential to remain cautious. The trend remains bearish, and the eurozone calendar remains almost empty. The US dollar is under the spotlight this week. Meanwhile, some predict another US dollar rally. What to expect from EUR/USD this week? The euro will likely face pressure against the greenback in the coming weeks, especially after dipping below a critical level last week. With no new data from the eurozone, the Fed's upcoming rate decision might not add to this pressure and could even boost the pair's quotes. Everything hinges on the message from the US regulator. The following trading sessions will be tense. The direction for the EUR/USD pair remains unclear, even if some think otherwise. As we know, markets can quickly shift their sentiment. Following the European Central Bank's (ECB) recent decision on interest rates, the euro began to decline. The decision confirmed rates would remain steady for the foreseeable future, signaling a pause in rate hikes. The euro hovered near 1.0675, the lowest level since March 2023. There were initial attempts for a euro rally after the ECB decided to hike rates by 25 basis points, peaking at 1.0729, but these efforts did not bear fruit. This could lead to a test of this year's range between 1.0500 and 1.1000. Markets expect the ECB to tighten its policy by approximately 11 basis points and cut by 25 basis points in July 2024. This could pressure the euro, especially if followed by a soft review. The current instability of the EUR/USD pair suggests a stronger dollar position, especially after falling below the 200-day moving average on the daily chart. Analysts at Societe Generale say that this looks ominous. Upcoming economic data is anticipated to show a slowdown, implying a downturn in the eurozone due to high interest rates. This economic slowdown will work against the euro. The euro might remain at risk until economic growth in the eurozone starts to rebound. The only silver lining for the euro or British pound, in a context where growth forecasts drive currency trajectories, is that growth expectations for the UK and eurozone are already bleaker than in the US. This should help prevent a dramatic drop in the EUR/USD or GBP/USD pairs, but the pound could still reach 1.2000 and the euro could fall below 1.0500 if we do not see any positive economic news in the near future. Euro Technical Analysis The EUR/USD pair is bracing for a rebound from the multi week low of 1.0630 that was recorded on Friday. If the pair breaks the 15 September low of 1.0631, the next targets will be the 15 March low of 1.0516 and then the 6 January 2023 low of 1.0481. If the pair breaks through the level of 1.0827 (200-day simple moving average), it could encourage a bullish move to 1.0922 and then the August 30 high of 1.0945. A break above this level could facilitate a test of the psychological level of 1.1000 and the August 10 peak at 1.1064. Fed meeting The US central bank is preparing to release its latest decisions and recommendations, which may cause volatility for the US dollar. However, many experts believe that major changes in the Fed's monetary policy are unlikely. Highlights include Rate Forecasts: Many economists expect the Fed to keep rates at 5.25-5.50%. Fed Dot Plot. This chart will show how FOMC members see future interest rate movements. Most members will likely indicate that the current rate level will remain unchanged through the end of 2023. Risks for the US dollar. If the dot plot shows that some Fed members are considering a rate cut in 2024, it could put pressure on the dollar. Fed Summer Indicators. Two CPI inflation reports are expected to be close to consensus. These data, along with other economic indicators, will confirm that the current level of interest rates is likely adequate to stabilize inflation. Based on these projections and analysis, the Fed's decisions may confirm the current trend in monetary policy and, as a result, the resilience of the dollar in global markets. US Dollar Technical Analysis The US dollar index is near its 2023 high of 105.88. Short-term support and resistance levels are located at 104.44 and 105.88 respectively. The long term support level is marked at 103.04. Bullish Scenario. If the DXY closes above 105.88 during the week, it could signal further dollar strength in the medium term. Bearish Scenario. If the index reverses and breaches the level of 104.44, it could signal a significant decline to 103.04. Economic Outlook. Despite the current difficulties, the US dollar continues to attract investors due to high interest rates, especially compared to the economic situation in Europe and elsewhere.
  13. EUR/USD: The euro falls after hawkish ECB surprise The European Central Bank surprised market participants by raising interest rates by 25 basis points. We must pay tribute to the ECB – it hasn't forgotten how to surprise! Although such unexpected moves, typical of, say, the Reserve Bank of New Zealand, are not characteristic of the ECB – they indicate a weak level of communication. Some hints of hawkishness were heard from certain representatives of the Bank (for example, Klaas Knot suggested not underestimating the potential for a hawkish scenario), but overall, the market was largely expecting a different outcome. The probability of maintaining the status quo was estimated at around 60-70%, and this confidence was also shaped by cautious/dovish statements from ECB members. Weak PMIs, ZEW, IFO, a contradictory report on inflation growth in the eurozone, weak retail sales, a decline in industrial output, and a slowdown in the Chinese economy – all these factors also spoke in favor of a wait-and-see stance. Therefore, the ECB's decision is one that goes "against the grain." However, the determination (in the current circumstances, it can even be called boldness) of ECB members did not help the single currency. Ironically, the unexpected hawkish surprise from the ECB sent EUR/USD plunging. Reacting to the results of the September meeting, the pair hit nearly a 4-month low, marking it at 1.0650 (the lower Bollinger Bands line on the daily chart). So, what is the reason for such an anomalous market reaction at first glance? The devil, as always, is in the details. The ECB raised interest rates by 25 bps with one hand but effectively put an end to the current cycle of monetary policy tightening with the other. The central bank signaled that interest rates have "reached a level that will make a substantial contribution to containing inflation." Such wording is difficult to interpret, so EUR/USD traders viewed the ECB's decision as the "final chord" of the current cycle. Interestingly, ECB President Christine Lagarde tried to soften the message during the final press conference, stating that "it is not possible to definitively say that ECB rates have reached their peak at this time." However, judging by the EUR/USD reaction, market participants have already drawn conclusions about the prospects for further monetary tightening. It is important to note again that most ECB officials were cautious or dovish in the run-up to the September meeting, pointing out signs of economic slowdown (especially after the release of PMIs), cooling labor markets, slowing inflation (particularly core HICP), and a slowdown in bank lending. Thus, they hinted at the need to maintain the status quo. However, after the September meeting, it became clear that inflation, which is still at a high level, worries ECB officials more than the deteriorating economic outlook. The latest inflation report reflected the "stubbornness" of European inflation. The Consumer Price Index remained unchanged at 5.3% in August (against expectations of a decline to 5.1%). This gauge has been steadily declining since October 2022, moving from its peak of 10.6% to the current target of 5.3%. However, the downtrend has recently stalled. As for core inflation, the situation is somewhat different. Core HICP, excluding energy and food prices, rose actively until March, reaching 5.7%. Then, the gauge gradually lost momentum but remained within a range: it was at 5.3% in May, 5.5% in June and July, and finally, in August, the index returned to 5.3%. This report was published two weeks ago on August 31st. Since then, discussions in the expert community about the ECB's future actions have not subsided. After a series of disappointing economic reports (as listed above), hawkish expectations diminished, and the balance tipped in favor of a wait-and-see stance. However, as we can see, the ECB decided to "squeeze" inflation without considering the fragile economic growth in the eurozone. At the same time, the ECB weakened the euro with its "conclusive" rhetoric. In particular, it was stated that interest rates are already at a level that will be maintained "for a sufficiently long time." According to the ECB, this will significantly contribute to reducing inflation. The central bank hinted that another round of monetary tightening within the current cycle is possible, but such a step would be of an extraordinary nature. This rhetoric did not sit well with the euro, particularly with EUR/USD buyers, resulting in the pair remaining below the 1.06 level. From a technical perspective, the bears reached the support level at 1.0650, which corresponds to the lower Bollinger Bands line on the daily chart but failed to break through it. Therefore, selling appears risky right now, as you may "catch a price bottom." Short positions should be considered once the pair breaks through 1.0650 (in which case the bearish target will be around 1.0600) or during bullish corrections. In the latter case, the target would be 1.0650.
  14. Trading Signal for GOLD (XAU/USD) on September 12-13, 2023: buy above $1,919 (3/8 Murray - 21 SMA) Early in the European session, gold (XAU/USD) is trading around 1,923.19, above the 3/8 Murray, and above the 21 SMA. On the 4-hour chart, we see that gold is consolidating within a bullish trend channel formed since August 6. If theinstrument remains above 1,919 in the next few hours, we could expect it to continue rising and the price could reach the top of this channel around 1,930. According to the 4-hour chart, the bears are gaining strength in the short term, but overall, XAU/USD remains consolidated around 1,920 - 1,930. XAU/USD is above the daily pivot point which gives it a positive outlook. The key level is 1,923, above which gold is expected to continue rising to 1,930 and up to 1,953 (5/8 Murray). In case gold trades below 1,919, a bearish acceleration is expected to occur, but for this, we should wait for confirmation below 1,915, which could be seen as a signal to sell with the first target of 2/8 Murray at 1,906. The price could even reach the psychological level of 1,900. Meanwhile, gold might produce a positive signal if it manages to settle above 1,920. Then, there will be an opportunity to buy with targets at 1,930, 1,937, and 1,953. The eagle indicator is giving a positive signal. However, if the gold price falls below 1,915, we should avoid buying. If this scenario does not occur at the current price levels, we could buy with the target at 1,953 in the short term.
  15. The euro could be heading down for a long time The euro kicked off the new week with some negative traction. In previous articles, I've already drawn your attention to the statements of some members of the European Central Bank's Governing Council, which boiled down to a simple idea – the hawkish rhetoric is fading, and the ECB is preparing to conclude the process of tightening monetary policy. Thus, the decrease in demand for the euro is quite natural. On Monday, ECB President Christine Lagarde refused to answer questions about the rate at the September meeting. Some of her colleagues actively hinted that rates should be kept at peak levels for as long as possible but didn't mention new rate hikes. On Wednesday, Peter Kazimir said that interest rates could rise by another 25 basis points. This could happen as early as next week, although a pause in September with a subsequent increase in October or December is also possible. In my opinion, it doesn't matter when exactly the ECB will raise rates for the last time. The key point is that until the tightening process is complete, there is at most one more hike. Right now, it's not even important how high inflation is in the European Union and how quickly it is decreasing because rates have been the priority for the market over the past year. Since the ECB may raise rates for the last time and the Federal Reserve may raise rates for the last time, it may seem that the euro and the dollar are in similar conditions. However, this is not the case. First, the sentiment suggests a decline. Second, the US currency has been falling for quite a while, and during this period, the Fed has been more aggressive than the ECB. This implies that the euro is a bit more expensive than it should be. I believe that most factors currently favor further depreciation. I would also like to note another statement from another member of the ECB's Governing Council, Francois Villeroy de Galhau, who stated that interest rates are near their peak, echoing Kazimir's rhetoric. Villeroy also noted that there is currently no recession, and inflation will not slow down to 2% until at least 2025. This implies that the central bank will not further tighten its policy to avoid causing a recession in the European economy, and they can afford to wait on inflation. Based on the conducted analysis, I came to the conclusion that the upward wave pattern is complete. I still believe that targets in the 1.0500-1.0600 range are quite feasible. Therefore, I will continue to sell the instrument with targets located near the levels of 1.0636 and 1.0483. A successful attempt to break through the 1.0788 level will indicate the market's readiness to sell further, and then we can expect to reach the targets I've been discussing for several weeks and months. The wave pattern of the GBP/USD pair suggests a decline within the downtrend. There is a risk of completing the current downward wave if it is d, and not wave 1. In this case, the construction of wave 5 might begin from the current marks. But in my opinion, we are currently witnessing the construction of the first wave of a new segment. Therefore, the most that we can expect from this is the construction of wave "2" or "b". I still recommend selling with targets located near the level of 1.2442, which corresponds to 100.0% according to Fibonacci.
  16. The most interesting events this week The previous trading week was filled with important events and reports. When looking at the range and movements of both instruments, one might wonder: why was it so subdued? It was reasonable to expect stronger movements and market reactions. To briefly recap, key reports from the United States turned out weaker than market expectations. Even the stronger ones left a peculiar impression. GDP grew by 2.1% in the second quarter, not the expected 2.4%. The ADP report showed fewer new jobs than expected. Nonfarm Payrolls reported more jobs, but the previous month's figure was revised downward. The ISM Manufacturing Index increased but remained below the 50.0 mark. The unemployment rate rose to 3.8%, which few had anticipated. Based on all these reports, one might have assumed that it was time to build a corrective upward wave, but on Thursday and Friday, the market raised demand for the US dollar, so both instruments ended the week near their recent lows. So what can we expect this week? On Monday, the most interesting event will be European Central Bank President Christine Lagarde's speech. On Tuesday, another speech by Lagarde, as well as Services PMIs of the European Union, Germany, and the United Kingdom. We can also expect speeches by other members of the ECB Governing Council. I advise you to monitor the information related to Lagarde's speeches. If she softens her stance, it can have a negative impact on the euro's positions. Wednesday will begin with a report on retail trade in the EU and end with the US ISM Services PMI. We can consider the ISM report as the main item of the week, although the ISM Manufacturing PMI that was released on Friday did not stir much market reaction. It is likely that the index will remain above the 52.7 mark, which is unlikely to trigger a market reaction. On Thursday, you should pay attention to the final estimate of GDP in the second quarter for the European Union. If it comes in below 0.3% quarter-on-quarter, the market may reduce demand for the euro. The US will release its weekly report on initial jobless claims. On Friday, Germany will publish its inflation report for August, and that's about it. There are hardly any important events and reports this week. Based on the conducted analysis, I came to the conclusion that the upward wave pattern is complete. I still believe that targets in the 1.0500-1.0600 range are feasible, and I recommend selling the instrument with these targets in mind. I will continue to sell the instrument with targets located near the levels of 1.0637 and 1.0483. A successful attempt to break through the 1.0788 level will indicate the market's readiness to sell further, and then we can expect the aforementioned targets, which I have been talking about for several weeks and months.
  17. Growth in yields and stable inflation suggest further rate hikes. USD, EUR, GBP Review The net short position in USD grew by $490 million to -$16.272 billion over the reporting week after a strong correction a week earlier. The decline is largely related to long positions on the euro, and in terms of other major currencies, the notable trend is selling across all significant commodity currencies (Canadian, Australian, New Zealand dollars, and also the Mexican peso). The yen and franc are slightly doing better, i.e., there is demand for safe-haven currencies and a sell-off in commodity currencies. Since long positions in gold have decreased by $4.5 billion, we can expect increasing demand for the US dollar. PMIs for the eurozone, the UK, and the US will be published on Wednesday, which can significantly influence the rate forecasts of the European Central Bank, the Bank of England, and the Federal Reserve. Last week, we witnessed a clear uptrend in bond yields, suggesting increased demand for risk amid more upbeat economic reports. At the same time, we see a sharp deterioration in China's economy, which, on the contrary, points to slowing demand. This dilemma may be resolved after the release of the PMIs, so we can expect increased volatility. EUR/USD The final estimate confirmed that the euro area annual inflation rate was 5.3% in July 2023, with core inflation unchanged at 5.5%. Since there are no seasonal factors that could explain the price increase at the moment, it would be best to assume the most obvious explanation - price growth is supported by broad price pressures in the growing services sector. Stubborn inflation supports market expectations that the ECB will raise rates in September, and this increase is already reflected in current prices. The strong labor market is also in favor of a rate hike. After a sharp decrease a week earlier, the net long position in the euro grew by $1.275 billion, putting the bearish trend into question. The settlement price is below the long-term average, giving grounds to expect a continuation of the euro's decline, but the momentum has noticeably weakened. A week earlier, we assumed that the bearish trend would continue. Indeed, the euro consistently passed two support levels, but did not reach the 1.0830 level. The resistance at 1.0960, which the euro can reach if a correction develops, is still considered in the long term. We assume that the trend remains bearish, and the 1.0830 level will be tested in the short term. GBP/USD Inflation in July fell from 7.9% to 6.8%. This is mostly due to the fall in the marginal price of OFGEM (Office of Gas and Electricity Markets) from 2500 pounds to 2074. Without this decline, inflation would have still fallen, but much less - to 7.3%. Despite the sharp decline, inflation remains at a very high level, and further falls in the marginal price of energy carriers are unlikely. The NIESR Institute suggests that, among the possible scenarios for future inflation behavior, we should choose between "very high", assuming an average annual inflation of around 5% over 12 months, and "high persistence", which is equivalent to an annual level of 7.4%. Needless to say, both scenarios imply inflation higher than in the US, so the likelihood of a higher BoE rate remains, leading to a yield spread in favor of the pound. These considerations do not allow the pound to fall and support it against the dollar, while against most major currencies, the dollar continues to grow. After three weeks of decline, the long position in GBP grew by $302 million to $4.049 billion. Positioning is bullish, the price is still below the long-term average, but, as in the case of the euro, an upward reversal is emerging. In the previous review, we assumed that the pound would continue to decline, but UK inflation pressure remains stubborn, which changed the rate forecast and supported the pound. A correction may develop, and the nearest resistance level is 1.2813. If the pound goes higher, the long-term forecast will be revised. At the same time, we still consider the bearish trend, and the chances of restoring growth are high, with the nearest target being the support area of 1.2590/2620.
  18. EUR/USD. Weekly preview. US retail sales, Fed minutes, ZEW indices Over the course of the first two weeks of August, the EUR/USD pair has failed to establish a clear direction. Despite prevailing bearish sentiments, sellers have been unable to solidify their position at the base of the 9th figure, let alone breach the support level at 1.0870. All of this indicates that the bears are hesitant, who are eager to lock in profits as soon as the price dips below the 1.0950 level (the middle line of the Bollinger Bands indicator on the weekly chart). The significant events of the previous week, like China's foreign trade data, the downgrade of American banks' ratings by Moody's, and the US inflation reports, led to a certain level of volatility. However, once again, the price remained within the confines of the 9th figure, with a brief impulsive surge to 1.1062. The pair completed a circle and returned to it's previous positions. The economic calendar for the upcoming trading week is relatively modest, although not entirely devoid of events. Let's review the main highlights of the next five days. Monday - Tuesday At the start of the trading week, the pair is likely to trade with the momentum of Friday. Monday's economic calendar is almost empty, with perhaps the German Wholesale Price Index being of interest. This indicator is expected to show a positive trend, but will still remain in the negative territory, both on a yearly basis (-2.6%) and on a monthly basis (-0.1%). The main release on Tuesday is the US Retail Sales report. Positive dynamics are anticipated here. According to forecasts, retail sales volume in the US is expected to increase by 0.4% in July, following a 0.2% growth in June. Excluding auto sales, the indicator is also projected to rise by 0.4%. Additionally, the Empire State Manufacturing Index, which is based on a survey of manufacturers in the New York Federal Reserve District, will be released on Tuesday. Here, on the contrary, negative dynamics are expected, with the indicator predicted to decline to -0.3. Furthermore, on Tuesday, Neel Kashkari, the President of the Federal Reserve Bank of Minneapolis, will be speaking. He could potentially generate increased volatility among the dollar pairs. Firstly, he holds voting rights in the Committee this year. Secondly, Kashkari has already commented on recent inflation releases, and his tone was rather positive. According to him, the US central bank has made "good progress" in combating inflation. If he voices similar rhetoric next week, the dollar might come under pressure again. During the European session on Tuesday, traders should pay attention to the German ZEW Economic Sentiment indices. In particular, the business sentiment index for Germany in August is expected to remain at the July level of -12 points. The business expectations index is expected to deteriorate to -15 points (the worst reading since December 2022). The current situation index is also projected to worsen to -63 points (the lowest reading since November of the previous year). Wednesday On Wednesday, EUR/USD traders will focus on the minutes of the July Federal Reserve meeting. Recall that the outcomes of the July meeting did not favor the US dollar. Among all the possible scenarios, the Fed implemented perhaps the most dovish one. The US central bank tied the fate of the interest rate to the dynamics of key macroeconomic indicators. The central bank retained the key formulations of the accompanying statement in their previous form, and Fed Chairman Jerome Powell, during the final press conference, indicated that the September Fed meeting could end with either another rate hike or keeping it unchanged. He emphasized that the central bank in the fall will evaluate the entire set of macroeconomic data "with special emphasis on progress in the field of inflation." The Fed's indecisive stance was interpreted against the US dollar. A hawkish tone in the minutes of the July meeting could provide support to the US dollar, especially since this meeting took place before the release of US inflation data for July. However, in my opinion, the document will likely reflect the Fed members' hesitant stance, considering the corresponding formulations in the final communique. In addition, on Wednesday, the report on the volume of building permits issued in the US will be released (expected growth of 1.1%), as well as the industrial production report (also expected to grow by 0.3%, following two months of negative dynamics). Thursday On Thursday, traders should focus on the Philadelphia Federal Reserve's Manufacturing Index. The indicator has been in the negative zone since September 2022. According to forecasts, in August, the index will also remain below the "waterline" but will demonstrate positive dynamics, rising to the level of -9.8 points. Furthermore, on Thursday, traders could also pay attention to the Initial Jobless Claims data in the US. Over the past two weeks, this indicator has been rising, and according to forecasts, this trend will continue: next week, the number of claims is expected to increase by 250,000 (last week - 248,000, the week before last - 227,000). Friday The economic calendar for the final trading day of the week is not packed with events for the EUR/USD pair. The only thing of interest is the eurozone inflation data for July. We will learn the final assessment of July's Consumer Price Index (CPI), which, according to forecasts, should match the initial assessment (a decrease in the Consumer Price Index and an increase to 5.5% in the core CPI). Conclusions The EUR/USD pair is in a hanging state. In order to develop a downtrend, sellers need more than just to establish themselves at the base of the 9th figure – they need to overcome the support level of 1.0870 – at this price point, the lower line of the Bollinger Bands indicator on the daily chart coincides with the upper and lower bands of the Kumo cloud. If the bears break through this price barrier, the Ichimoku indicator will form a bearish "Parade of Lines" signal, indicating the strength of the downward movement. This is not an easy task, considering the fact that over the last two weeks, the downward momentum has faded at the base of the 9th figure. The bulls don't have an easy task either: they need to establish themselves above the 1.1050 mark – this is the upper line of the Bollinger Bands, coinciding with the Kijun-sen line on the same timeframe. In that case, the pair can move towards the 11th figure. However, throughout August, buyers only impulsively tested the 1.1050 target, afterwards they retreated, locking in profits. Given the relatively uneventful economic calendar for the upcoming week, we can assume that the pair will continue to trade within the range of 1.0950 – 1.1050, with periodic attempts to establish themselves at the base of the 9th figure.
  19. The global economy is slowing down, risk appetite is decreasing, and the USS is experiencing increased demand. Overview of USD, CAD, JPY Activity in the currency market remains subdued in the absence of significant economic reports, with the main focus on the US inflation report on Thursday, which could lead to more pronounced movements. Risk assets are still under pressure due to weak data from China, indicating a decline in global demand. Following Tuesday's disappointing external trade data, it was revealed that China's economy has slipped into deflation, with inflation turning negative at -0.3% YoY in July. Consumer prices rarely decrease in China, and given that other countries continue to grapple with high inflation, this is a worrying sign for the global economy as a whole. The US dollar remains the leader in the currency market, playing the role of the primary safe-haven currency in the current conditions. USD/CAD The Canadian dollar has received several sensitive blows and lost its positive momentum against the USD. The labor market report for July showed a decrease in the number of new jobs (-6.4K), while an increase of 21.1K was forecasted, which is particularly noticeable against the backdrop of strong growth in June (+59.9K). The unemployment rate rose from 5.4% to 5.5%, and more importantly, the average wage growth increased from 3.9% YoY to 5% YoY. Wage growth is usually a bullish factor as it fuels high inflation, but with simultaneous economic slowdown, this factor begins to work against it. The Ivey Purchasing Managers Index (PMI) for July dipped into contraction territory, hitting a multi-month low of 48.6 points. This indicates an economic slowdown. However, the price sub-index rose to a 5-month high, increasing from 60.6 points to 65.1 points. The Canadian economy has suddenly lost the advantage that allowed for expectations of sustainable CAD growth. Inflation remains strong, and to contain it, it is logical to anticipate further actions by the Bank of Canada. These expectations are in favor of CAD strengthening. However, simultaneously, a slowdown in activity with further tightening of monetary policy could lead Canada's economy into a recession. This, on the contrary, limits the resolve of the Bank of Canada. The unstable equilibrium deprives the Canadian currency of its advantage, weakening the bullish momentum. The net long position on CAD has increased slightly over the reporting week, with positioning being neutral. However, the calculated price after the release of the disappointing employment report turned upwards and moved above the long-term average. The sharp upward turn in the calculated price reduces the chances of a confident resumption of USD/CAD decline. Currently, the pair is trading near the middle of a corrective bearish channel. If no additional arguments arise from the Canadian side, the likelihood of further growth will remain high. The long-term target is the upper band of the channel at 1.3690/3720, with support at 1.3350/70. USD/JPY The key question that will determine the fate of the Japanese yen remains how resolutely the Bank of Japan is prepared to act in order to reduce domestic inflation. Alternatively, the Bank might continue adopting a wait-and-see position, resorting to adjustments to the current monetary policy. Possible hawkish steps by the BOJ involve two potential actions - either a complete abandonment of the yield curve control (YCC) policy or a withdrawal from negative interest rates. Any actions in this direction will be interpreted by the market as a hawkish signal, leading to yen strengthening. Conversely, maintaining the current policy will inevitably contribute to further yen weakening. The recent comments from BOJ officials after the July 28 meeting are cautious and do not provide grounds to expect any decisive steps. For example, BOJ Deputy Chief Uchida Shinichi stated at a press conference that the Bank is "considering an exit from monetary easing but does not see reasons for any actions in the foreseeable future," and that the decision is still "far off." In other words, the "wait and see" policy remains in place. The yen can start to strengthen under current conditions only if negative trends in the global economy intensify, leading to a noticeable increase in demand for safe-haven assets. As long as there is no reason for such a scenario, there is no reason for yen strengthening. The net short position on the yen has slightly increased over the reporting week and solidified just above -7 billion, speculative positioning is confidently bearish. The calculated price is above the long-term average and aimed at continuation of growth. The development of the upward movement for USD/JPY is still the main scenario, despite attempts at consolidation near the 143 level. A week ago, we identified the local high at 145.06 as the target for bullish momentum development and the upper band of the channel at 147.30/70 as the long-term target. These targets remain relevant and can only be adjusted in case of truly significant changes from the BOJ in its monetary policy. As long as changes are cosmetic, the dollar is objectively stronger in this pair.
  20. EUR/USD: euro holds ground despite stronger dollar The US dollar started the day on a positive note, attempting once again to overtake its European counterpart. However, the euro is not giving up so easily and continues to fight for leadership in the EUR/USD pair. At the beginning of this week, the greenback retreated slightly, but quickly made up for its early losses. According to analysts, the dollar's recent failures were temporary and were not able to drag the currency into negative territory. Neither the recent downgrade of the US credit rating nor the unstable macroeconomic data published by the US Department of Labor managed to undermine the greenback's position. In July, the US job market added 187,000 new jobs, following the 185,000 previously recorded. Although these figures fell short of the anticipated 205,000, experts assessed the overall macroeconomic outlook as positive. Analysts often say that the Nonfarm Payroll (NFP) is one of the most unpredictable indicators. This is why any dramatic shifts in the market or any reviews of the Fed's current decision were highly unlikely. According to Austan D. Goolsbee, head of the Chicago Fed, the American job market should "find its balance" soon. The official had previously remarked that while the US labor market is cooling down, it's "still exceptionally hot." According to estimates, overall employment growth in the US was slightly below expectations. However, the increase in wages and the decrease in unemployment rates might provide reasons for the Fed to consider another rate hike. The return of the unemployment rate to 3.5% is particularly noteworthy. Analysts believe this rate is now at cyclical lows, which continues to exert inflationary pressure. In this context, the Federal Reserve may find it hard to soften its stance, experts believe. In addition to this, hourly wages grew more than expected (by 0.4% MoM) over the reporting period, maintaining an annual rate of 4.4% set earlier this year. With such wage growth, rates and employment figures, inflation is unlikely to ease. In the current scenario, the Fed might further tighten its monetary policy. This sentiment is shared by Atlanta Fed President Raphael Bostic. Last Friday, August 4, he told Bloomberg that the central bank would maintain its restrictive monetary policy until 2024. This is crucial to achieve a target rate of 2%, the official reiterated. Against this backdrop, the dollar has noticeably appreciated against other major currencies, primarily the yen and the euro. The greenback's strengthening was driven by the latest import and export reports from China. Official data indicates that from January to July, exports from China decreased by 5%, while imports fell by 7.6% year-on-year. Additionally, last month both indicators plunged by 14.5% and 12.4% respectively. At the start of the week, the greenback managed to stabilize after a moment of weakness. On Tuesday morning, August 8, the EUR/USD pair was trading near 1.0997 before rising quickly to 1.1000 and breaking through it. EUR/USD is expected to hit new record highs and its next target is believed to be the 1.1100 mark. Today, the market's focus is on significant macroeconomic data from the United States, with analysts expecting a noticeable decrease in inflation in the short term. On Thursday, August 10, the country's Department of Labor will publish these reports. According to preliminary forecasts, consumer prices in America surged by 3.3% year-over-year in July. The data on US consumer prices will help investors assess the results of the Federal Reserve's prolonged cycle of monetary policy tightening. In addition, inflation is projected to have accelerated over the past month. Current macro statistics will help forecast the Federal Reserve's next step and partly predict its actions at the September meeting. Meanwhile, the majority of analysts (86.5%) believe that the regulator will maintain the key rate at the current level of 5.25%-5.5%. Other experts assume there might be a slight increase. Last week, tensions escalated in the global stock market after the deterioration of the American credit rating. Against this backdrop, market participants were seriously afraid of widespread sell-offs, but this did not happen. Moreover, the market managed to avoid the correction that many feared after a 7-month period of growth. As a result, the market found relative stability as traders and investors did not rush to lock in profits and sell securities in their portfolios. Fitch's recent decision has not negatively affected the US currency rate. According to analysts' observations, the US dollar index (DXY) closed last week with gains, showing a short-term dip. Earlier, in August 2011, S&P Global Ratings downgraded the US credit rating amid problems with the debt ceiling. However, these actions also barely affected the national currency. Moreover, the dollar index closed 2021 with a 7% growth, and during that time, it added over 30%. According to analysts, in the medium and long-term planning horizons, the greenback will maintain stability. A more positive scenario implies a sustained upward trend of the US dollar against the euro. According to Jane Foley, Head of Currency Market at Rabobank, the dollar is still considered a safe-haven currency "thanks to its massive share in international payments." The currency strategist at Rabobank acknowledges that the greenback may lose its dominant positions over time "but it is unlikely to happen in the next 20, 30, or 40 years." Many specialists assume that the trajectory of the American currency will largely depend on the Federal Reserve's monetary policy. Besides, USD will continue to gain support thanks to the confident growth of the US economy.
  21. The Bank of England will raise interest rates in September The week ended quite predictably for both instruments, but the wave analysis suggests that it is quite challenging to predict what lies ahead. Both uptrends cannot be impulsive, but they can be five-wave corrective patterns of the a-b-c-d-e kind. Consequently, quotes can rise within the wave e. The recent downward waves have taken a three-wave corrective pattern at the moment, which corresponds to a corrective status but not an impulsive one. However, after three waves, two more waves can be built. Based on the above, both instruments, from current levels, have an equal probability of either starting a new upward movement or extending the decline. In this situation, I recommend focusing on the nearest Fibonacci levels. For the euro, the wave analysis is somewhat more complicated, while for the pound, we see a clear three-wave downward movement. A successful attempt to break the 161.8% Fibonacci level may indicate the end of the downward wave, which would be the fourth wave within an uptrend. The euro may also construct a similar wave formation. The question of further interest rate hikes by the Bank of England is also crucial for the market right now. Many analysts (including myself) believe that the tightening cycle will end this year, with only three meetings remaining until the end of the year. The next meeting is likely to result in a 100% rate hike, as BoE Governor Andrew Bailey has not signaled any pause, and inflation remains high. Bailey has also given an approximate inflation target for autumn 2023. If inflation decreases to 5%, the BoE will take a less aggressive approach to interest rates. In November, the probability of a rate hike is 50/50. Consequently, by December, the likelihood of a rate increase approaches zero. This implies that, at best, there may be two more rate hikes. Meanwhile, the FOMC may raise rates one more time, resulting in almost complete parity between the two central banks. In my view, this scenario suggests a horizontal movement or continuation of the downward trend, but not a new upward wave for both instruments. After all, the ECB is also starting to talk about a possible pause in September in recent weeks. Therefore, I believe that there's a high probability that both instruments will fall, and the nearest Fibonacci levels should help determine the resumption of the downward movement. I also want to draw attention to the similarity in the movements of the euro and the pound. Hence, a signal for one instrument can be used for the other as well. Based on the conducted analysis, I conclude that the formation of the upward wave set is complete. I still consider targets around 1.0500-1.0600 quite realistic, and with these targets in mind, I recommend selling the instrument. The a-b-c structure looks complete and convincing, and closing below the 1.1172 mark indirectly confirms the formation of the downtrend segment. Therefore, I insist on selling the instrument with targets around 1.0836 and below. I believe that the formation of the downtrend segment will continue. The wave pattern of the GBP/USD instrument suggests a decline. As the attempt to break the 1.3084 mark (from top to bottom) was successful, my readers were able to open short positions, as I mentioned in my recent reviews. The target was set at 1.2618 and the pair managed to reach this mark. There is a risk of completing the current downward wave if it is the 4th wave. In this case, a new upward movement will start from the current levels as part of the 5th wave. In my opinion, this is not the most likely scenario, and a successful attempt to break 1.2618 (or an unsuccessful attempt at 1.2840) will indicate the market's readiness to continue building the downward wave and trend segment.
  22. US dollar comes on top as euro lags behind The American currency has once again taken the lead, pushing the European currency to the sidelines. The dollar was boosted by strong US consumer confidence data. Meanwhile, the euro has experienced a significant decline remains hopeful of a rebound in the near future. On the evening of Tuesday, July 25th, the greenback demonstrated significant growth against the euro, soaring higher after the release of encouraging consumer confidence data in the USA. According to latest reports, the consumer confidence index in the US increased to a 2-year high of 117 points in July, up from the revised 110.1 points in June. Against this backdrop, the US Dollar Index (USDX) performed well, reaching a peak of 101.65 points but later dipped slightly by 0.08%. It's worth noting that USDX exhibited a consistent uptrend over six consecutive trading sessions, nearly recouping 50% of its losses from early July. According to Sean Osborne, a leading currency strategist at Scotiabank, the prospects for the US dollar remain uncertain: "While the DXY rebound has extended a bit more than I expected the broader outlook for the USD remains somewhat challenging and I still rather look for the USD to weaken in H2," he commented. Nevertheless, the euro, the recent market favorite, was unable to take advantage of the dollar's moves and suffered a noticeable setback against it. However, most of the G10 currencies strengthened against the American currency, particularly the Australian dollar, the Swiss franc, and the Japanese yen. The unexpected driving force behind the surge of major currencies against the greenback was the optimism regarding the prospects of the Chinese economy. Recently, Chinese authorities outlined revised plans for additional economic support, extending their backing to troubled sectors such as the real estate market, while pledging to boost consumption and address regional government debts. Analysts argue that this newfound Chinese optimism weighed down on the dollar, which is now bearing the burden of China-inspired optimistic sentiment against its major G10 peers. As a result, the US dollar index retreated from its two-week highs after being previously supported by elevated PMI data. Furthermore, market participants' uncertainty about the Federal Reserve's forthcoming actions contributed to the dollar's decline. Investors and traders expect that on Wednesday, July 26th, the Federal Reserve will raise its key interest rate, marking the final move in the current tightening cycle. According to analysts, the monetary authorities will maintain the possibility of further maneuvers in the future, in case a return to tightening is deemed necessary. However, there are risks involved. "Policymakers will want to leave the door open to more tightening down the road but history shows markets are quite attuned to the top of the rate cycle when it comes and USD has generally weakened once peak rates are in," analysts at Scotiabank warned. In this complex situation, the euro finds it challenging to stay afloat. EUR has demonstrated weakness after the publication of Eurozone economic data. According to reports from the German research institute IFO, key indicators, namely the EU Business Climate Index and the Current Assessment Index, came in worse than previously forecast. In July, the business climate index in Germany dropped to 87.3 points from the previous 88.6 points, falling short of market expectations of 88 points. This ambiguous situation has negatively impacted EUR/USD. After rising to 1.1100, the pair reversed course and fell to the lowest level in two weeks around 1.1050. On Wednesday morning, July 26th, EUR/USD was trading between 1.1058 and 1.1059, gradually attempting to break free from the downward spiral. According to analysts, currently EUR/USD lacks momentum for growth, despite the rebound from the two-week low. The pair benefitted from the US dollar's short term retreat, but failed to attract bulls due to concerns about a recession in the Eurozone. The market's focus is now on policy meetings of central banks around the world, which are taking place this week. On Wednesday, July 26th, the Fed will announce the policy decision following the July meeting. The overwhelming majority of analysts expect the Fed funds rate to be hiked by 25 basis points to 5.25% - 5.5%. On Thursday, July 27th, the European Central Bank (ECB) will hold its meeting. Later, the ECB will publish its decision, which analysts also believe will lead to a 25 basis point rate hike to 4.25%. If the ECB's rhetoric turns out to be less hawkish than that of the Fed, EUR/USD may fall below the key psychological level of 1.1000. However, analysts still consider 1.1050 as the key support level. Additionally, on Thursday, the US will publish its first estimate of GDP growth for Q2 2023. Preliminary data indicate the American economy grew by 1.8% year-on-year during this period, following a 2% increase in Q1. Despite this, market participants remain primarily focused on the Federal Reserve and ECB meetings, their monetary policies, and the hints provided by the central bank heads regarding future actions.
  23. The global recession is getting closer. USD, EUR, GBP overview CFTC data reflects a significant deterioration in sentiment towards the US dollar. The overall short position on the USD increased by 7.39 billion during the reporting week, reaching -19.88 billion, marking the largest weekly change since 2020, and the highest bearish bias since 2021. Significant adjustments were observed in positions on the euro and yen. In addition, it is worth noting that the net long position on gold increased by a substantial 6.231 billion, reaching 38.258 billion. Buying gold while simultaneously selling the dollar often signifies expectations that the dollar will weaken. The Federal Reserve's rate hike on Wednesday is considered a done deal, and the market's primary focus will be on the forecasts. The Fed's main goal is to lower inflation expectations and reduce demand, so far this goal has not been achieved. Retail sales data for June indicates high consumer activity, suggesting a potential threat to the sustainability of core inflation. The prospects for the dollar remain unclear for now. Either tightening financial conditions will lead to a sharp decline in consumption, creating conditions for a recession, or the transition will be more gradual. In the first case, the dollar will weaken, while in the second, any corrective decline may be short-lived, as the eurozone economy is closer to a recession than the US economy. EUR/USD: The European Central Bank meeting will take place on Thursday, and a 25 bps rate hike is considered a done deal, as Council members have repeatedly communicated in their comments. The rate hike itself is unlikely to cause a significant movement. The main focus will be on the forecasts, from which the market will obtain information about the plans for the September meeting - either the central bank signals another rate hike, or it decides to take a pause. These post-meeting data will be the factor that either pushes the euro higher or fuels the corrective decline. The eurozone economy is slowing down, and the PMI data published on Monday came out worse than expected in all sectors - both in manufacturing and services. The slowdown in activity suggests that inflation deceleration will continue, and the September meeting will be the last one where the ECB raises rates. If the market confirms this assumption, the euro will fall, and the uptrend will come to an end. The net long position on the euro increased by 5.8 billion during the reporting week, marking the most significant improvement in sentiment towards the euro since September of last year. The calculated price has yet to move up. Investors seem to be anticipating the end of the Fed's rate hike cycle, as well as the US dollar's bullish momentum. The FOMC meeting will take place on Wednesday, and the expected rate hike is already fully priced in. As a result, the yield spread will start to favor the euro, as the ECB is still far from the end of its rate cycle. It is assumed that the end of the Fed's tightening cycle will be accompanied by hawkish comments, which could push EUR/USD to fall towards the support level at 1.1010/20. Considering the significant change in sentiment on futures after the formation of a local base, the euro will likely attempt to bring back its upward movement. GBP/USD: The retail sales data for June came out better than expected, supporting the pound as maintaining high consumer demand also implies the preservation of high inflation expectations and, consequently, an increase in the Bank of England's rate forecasts. At the same time, business activity is slowing down faster than expected - the manufacturing PMI fell from 46.5 to 45 in July, while the services PMI fell from 53.7 to 51.5. The composite PMI also slowed down from 52.8 to 50.7. Considering that GDP growth is minimal and the UK economy is half a step away from a recession, maintaining high consumption while PMI activity declines implies a transition to a stagflation regime, which combines high inflation and recession. This is an awful scenario for the BoE, which they would like to avoid. Inflation in the UK is higher than in the eurozone and the US, which suggests further rate hikes by the BoE even before the threat of a recession. This factor will support demand for the pound in the short term. The net long position on GBP increased by 499 million during the reporting week, reaching 5.192 billion, reflecting bullish positioning. The calculated price is currently pointing downwards, which suggests an attempt to develop a corrective decline. The pound has fallen below the support level at 1.2847, which technically indicates the possibility of a downward movement. The next support is at 1.2770/90, where the lower band of the long-term bullish channel lies. Considering that speculative positioning in futures is shifting in favor of the pound, we assume that the bearish attempts are of a corrective nature, and the pound is unlikely to fall below 1.2770. After forming a local peak, we expect the pair to resume its uptrend.
  24. Trading Signal for GOLD (XAU/USD) for July 25-26, 2023: buy if breaks $1,963 (200 EMA - 21 SMA) Early in the European session, gold (XAU/USD) is trading at 1,962.61. It is located above the 21 SMA and above the 200 EMA. The 1-hour chart shows that gold is trading within a downtrend channel formed since July 20 when it reached the high of 1,987. With a sharp break of this downtrend channel and a daily close above 1,963, we can expect the price to rally and reach 3/8 Murray, so its first target is seen at about 1,968. If bullish force prevails, the metal could reach 1,985 and ultimately the psychological level of $2,000. On the other hand, in case XAU/USD falls below 1,960, we could expect a downward acceleration and the instrument could reach 1,953 and finally, it could fall to 1,943, a level that coincides with the 200 EMA on the 4-hour chart. Investors are waiting for the FED to increase its interest rate by 0.25% to 5.50%. The policy announcement could generate strong volatility in gold. If the data is favorable, gold could fall until it reaches 1,937 and 1,906. On July 24, the Eagle indicator reached a 5-point low, which represents an oversold zone. Since then, we can observe a technical rebound in gold from the 1,953 low. In the next few hours, we expect gold to break sharply the downtrend channel and reach 1,968 and 1,985.
  25. Intriguing trends in the US stock market: Dow Jones confidently grows by 0.47%, but what awaits other indices? Shares of Johnson & Johnson became the real stars of the day, gaining 6.07%, closing at 168.38. Significant growth was also noted in the shares of Goldman Sachs Group Inc, rising by 3.03% and closing at 350.86, while Boeing Co showed a price increase of 2.40%, settling at 213.61. Meanwhile, some sectors, such as technology, consumer goods, and consumer services, experienced negative dynamics. It's surprising, as the market is such that today some sectors may experience a decline, while tomorrow becoming the leaders of growth. It is interesting to note that the markets evaluate ambiguous macro-statistics, and this affects the overall picture. The number of initial jobless claims in the US for the week surprised experts by decreasing by 9 thousand to 228 thousand, while the forecast suggested an increase to 242 thousand. However, the number of home sales transactions in the secondary market in the US decreased by 3.3% in June compared to May, reaching 4.16 million transactions, against the forecast of 4.2 million. The New York Stock Exchange also didn't stay away from the market's diverse movements. The Dow Jones index demonstrated a slight increase of 0.47%, reaching a 52-week high. Meanwhile, the S&P 500 index slightly fell by 0.68%, and the NASDAQ Composite index decreased by 2.05%. Days like these, full of volatility and opportunities, always keep investors on their toes. It's precisely during such moments that unique chances and advantageous opportunities arise for true adventurers in the financial markets. At the top of the growth were the shares of Johnson & Johnson (NYSE: JNJ), showing unwavering strength, with a gain of 6.07%, equivalent to 9.64 points, and closing at 168.38. In second place were the quotes of Goldman Sachs Group Inc (NYSE: GS), which, like sprinters, rose by 3.03% or 10.31 points, finishing the session at 350.86. We cannot overlook Boeing Co (NYSE: BA), which added 2.40% or 5.01 points to the price of its shares, closing at 213.61. While growth characterized the leaders, there were also those who faced challenges and dropped from the top. Among the declining stocks, Intel Corporation (NASDAQ: INTC) drew attention, losing 3.16% or 1.09 points, closing the session at 33.37. However, the shares of Salesforce Inc (NYSE: CRM) demonstrated strength and growth of 2.65% or 6.21 points, closing at 228.16. Microsoft Corporation (NASDAQ: MSFT) encountered some difficulties, losing 2.31% or 8.21 points but still holding at 346.87. Impressive growth is also characteristic for some components of the S&P 500 index. For example, the shares of Zions Bancorporation (NASDAQ: ZION) rose by a significant 9.98%, reaching the mark of 37.90. And, of course, our growth leader of the day is Johnson & Johnson (NYSE: JNJ), showing remarkable growth of 6.07% and closing at 168.38. Finally, let's not overlook the shares of Allstate Corp (NYSE: ALL), which rose by 5.85% and closed at 111.98. On the other hand, the leaders of decline were the shares of Discover Financial Services (NYSE: DFS), which decreased in price by 15.92%, closing at 102.45. Tesla's shares (TSLA.O) fell by 9.74%, marking the largest one-day percentage decline since April 20, after the electric vehicle manufacturer reported a drop in second-quarter gross profit to a four-year low, and CEO Elon Musk hinted at further price cuts. The quotes of Equifax Inc (NYSE: EFX) also dropped by 8.89% to 216.37. Among the components of the NASDAQ Composite index, the growth leaders in today's trading were the shares of Guardforce AI Co Ltd (NASDAQ: GFAI), which increased by 57.46% to 6.44, Evelo Biosciences Inc (NASDAQ: EVLO), gaining 52.40% and closing at 9.86, and Sirius XM Holding Inc (NASDAQ: SIRI), rising by 42.26% and finishing the session at 7.81. Despite the mixed trends, some stocks stand out with their extraordinary dynamics. Shares of Discover Financial Services (NYSE: DFS) faced challenges this time around and fell a hefty 15.92% to close at 102.45. Similarly, the shares of Tesla (TSLA.O) also attracted attention with a loss of 9.74%. This marked the largest one-day percentage decline since April 20. The drop was attributed to the announcement of a decline in gross profit in the second quarter to a four-year low, as well as hints from CEO Elon Musk about possible price reductions. Meanwhile, the shares of Equifax Inc (NYSE: EFX) also experienced a decline, dropping by 8.89% to 216.37. However, not only the decline is noteworthy in the market. Among the components of the NASDAQ Composite index, some stocks stand out as strong growth leaders. For example, the shares of Guardforce AI Co Ltd (NASDAQ: GFAI) astonished with a surge of 57.46%, reaching 6.44. They were followed by the shares of Evelo Biosciences Inc (NASDAQ: EVLO), which rose by 52.40% and closed at 9.86, and the shares of Sirius XM Holding Inc (NASDAQ: SIRI), showing growth of 42.26% and finishing the session at 7.81. On the other hand, the shares of Vir Biotechnology Inc (NASDAQ: VIR) drew attention with a significant price drop of 44.90%, closing at 12.70. The shares of Netcapital Inc (NASDAQ: NCPL) also experienced a decline of 41.88%, ending the session at 0.68. Additionally, the quotes of Durect Corporation (NASDAQ: DRRX) also suffered a decrease of 33.13%, reaching 3.29. It is interesting to note that Netflix (NFLX.O) shares faced a major challenge, falling 8.41%. This marked the largest one-day percentage decline since December 15, and it happened after the company's quarterly revenue in the streaming video sector did not meet market expectations. Despite the decline in the Nasdaq index, the Dow (.DJI) continues to delight investors with its steady performance. It registered its ninth consecutive session of growth, making it the longest winning streak since September 2017. The situation on the New York Stock Exchange also left its mark. The number of declining stocks (1710) exceeded the number of those closing in the positive (1240), and 80 stocks remained virtually unchanged. The Nasdaq stock exchange also experienced fluctuations: shares of 2246 companies declined, 1286 rose, and 131 remained at the same level as the previous closing. The stock market is showing an increase in volatility, reflecting the instability and fluctuations in the market. The CBOE Volatility Index, which is based on S&P 500 options trading, rose by 1.67% and reached a level of 13.99. This indicates that investors are expecting increased uncertainty and more unpredictable movements in the near future. Currently, there are mixed trends in the commodity market. August gold futures lost 0.45% or $9.00, closing at $1,000 per troy ounce. Meanwhile, September WTI crude oil futures rose by 0.61% or $0.46, reaching $75.75 per barrel. September Brent crude oil futures also showed an increase of 0.29% or $0.23, reaching $79.69 per barrel. In the currency market, the EUR/USD pair is experiencing a decline of 0.61%, leading to a drop to 1.11. At the same time, USD/JPY quotes rose by 0.29% and reached 140.07. USD index futures also demonstrated growth by 0.56%, settling at 100.54. This indicates a strong position of the US dollar in the market and investors' interest in this currency. Thus, the current data in the market speaks of unpredictability and warns investors to be more attentive and cautious when making decisions. In such a situation, it is especially important to keep track of global events and economic news to make informed decisions in the market.
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