NZDUSD - New Zealand inflation hits 32-year high
The New Zealand authorities announced the extension of the preferential excise tax on motor fuel due to a decrease in the cost of living of citizens due to record inflation, which reached an annualized rate of 7.3%, the highest value in 32 years. According to the Stats NZ data, published the day before, cost of construction materials increased the most in June, adding 18%, utilities added 7.3% and food products gained 6.5%, while the cost of gasoline increased by 32% in annual terms, and diesel fuel added 74%. Experts believe that against the backdrop of continuing negative dynamics, the Reserve Bank of New Zealand will tighten its monetary policy, raising the interest rate by 0.75 percentage points already at the August meeting. Last week, the regulator already adjusted the figure to 2.50% and announced plans to bring the value to 4.0% by the middle of next year.
Quotes of the trading instrument are within the global downtrend, having retreated from the annual low of 0.6096. Technical indicators hold a stable sell signal, but do not exclude local correction: fast EMAs on the Alligator indicator slowly narrow down the range of fluctuations, and the AO oscillator histogram is forming local upward bars.
Support levels: 0.6096, 0.5954 | Resistance levels: 0.6225, 0.6397
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Silver - H4
On the four-hour chart of the asset at the level of 18.22, there is a formation of a Long-Legged Doji candlestick analysis pattern, signaling uncertainty in the market or a possible reversal, which is also confirmed by the formation of the Morning Star pattern, after which the trading instrument showed a price recovery to the level of 19.07. At the moment, the quotes are moving in the sideways range of 18.62–19.07, where the Hammer and Bullish Belt Hold patterns have already appeared. Their combination signals that the asset has probably reached a low and is reversing. At the moment, the uptrend to the resistance level of 19.50 is seen as a priority, consolidation above which will allow the “bulls” to head to the zone of 20.95–24.19. An alternative scenario may be realized if the price breaks the key support level at 18.22, then the decline may intensify up to the level of 14.77.
D1
On the daily chart, there is the formation of a Falling Wedge price pattern, which may end at the support level of 18.22, and a Hammer, the appearance of which indicates that the price has reached the bottom. In the current situation, the scenario with an upward movement from the level of 18.22 is seen as a priority. Overcoming the upper border of the Falling Wedge and consolidation of the quotes above 19.50 will mean a final upward reversal and will allow the “bulls” to restore their positions in the range of 20.95–24.19.
Support levels: 18.22, 16.74, 14.77 | Resistance levels: 19.50, 20.95, 24.19
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The European currency received a positive impetus
The euro continues to strengthen locally in tandem with the US dollar after the publication of a positive report on the dynamics of consumer prices. According to statistics, in June the indicator added 0.8% and the annual value reached 8.6%, which is fully consistent with the preliminary estimates of the market and representatives of the European Central Bank (ECB). These macroeconomic data will influence the decision of the members of the regulator during tomorrow’s meeting on monetary policy, and the fact that inflation in the eurozone remains in line with expectations may signal an increase in interest rates in a standard 25 basis point increment, which will be enough to contain price increases. In this case, euro quotes will receive short-term support.
Despite the quite expected achievement of the absolute low of the year, EURUSD remained within the global downward channel and is now forming another wave of growth. Technical indicators hurried to give a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.
Support levels: 1.0185, 1 | Resistance levels: 1.035, 1.0624
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The Australian currency continues its upward correction
The Australian currency is taking a lead from the positive momentum received the day before after the publication of the minutes of the meeting of the Reserve Bank of Australia (RBA) on monetary policy. In particular, the document reflects the opinions of officials of the regulator, as well as full-fledged justifications for the recent increase in the interest rate by 50 basis points, and not by 25, as previously expected. The committee members decided to tighten monetary conditions more rapidly, taking into account the situation in the United States. The fact is that the US Federal Reserve clearly missed the moment when it was necessary to take tough measures regarding the adjustment of monetary parameters, and now, because of this, it is becoming increasingly difficult for officials to contain record inflation rates. Against this background, the RBA considered that a sharp increase in rates is the best option in these conditions, which will not allow them to face a recession in the future. Investors and analysts took the rhetoric of the financial authorities very positively and supported the Australian currency with purchases.
On the global chart, the price continues to remain inside the Expanding Formation pattern and, having rebounded from the support line, forms a new wave of corrective growth. Technical indicators signal the presence of a correction: fast EMAs on the Alligator indicator began to approach the signal line, and the AO oscillator histogram is trading in the sell zone, forming ascending bars.
Support levels: 0.6857, 0.668 | Resistance levels: 0.699, 0.712
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XRPUSD -Technical analysis
Currently, the price is testing its upper limit, consolidation above which will allow the cryptocurrency to continue moving to the area of 0.4150 (Fibo retracement 23.6%). Otherwise, the price will remain within the sideways range and resume its decline to the levels of 0.2930 and 0.2441.
Technical indicators confirm the high probability of the development of downward dynamics: the Bollinger Bands are horizontal, the MACD histogram is at the zero line, its volumes are insignificant, and the Stochastic has reached the oversold zone and is trying to reverse downwards. In general, further movement within the established lateral range is seen as the most priority scenario at the moment.
Resistance levels: 0.3660, 0.4150, 0.4395 | Support levels: 0.2930, 0.2441, 0.1953
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USDCAD - Technical analysis
H4
On the four-hour chart of the asset, at the level of 1.2971, there is a formation of the Three Black Crows candlestick analysis pattern, which signals the continuation of the negative dynamics of the quotations of the trading instrument, and at the level of 1.2921, the Tweezer Top pattern has been fixed, indicating another local resistance for buyers. In the current situation, a scenario with a downward movement to the support level of 1.2814 is more likely, overcoming which will allow the “bears” to continue the decline to the area of 1.2626−1.2458. An alternative scenario is possible if buyers manage to hold positions at 1.2814 and reverse the situation in their favor, and then the asset will be able to recover in the range of 1.2971–1.3243.
D1
On the daily chart, there is a Three Mountain Tops candlestick analysis pattern with the appearance of formed Tops, which, in turn, emphasizes the overbought asset and the fact that above these levels the “bulls” meet strong resistance. The sellers’ activity confirms the appearance of the Hanging Man reversal pattern at the level of 1.2971. A further decline in quotations to the area of 1.2814 is expected, after which the “bears” will be able to continue moving upwards to the level of 1.2458.
Support levels: 1.2814, 1.2626, 1.2458 | Resistance levels: 1.2971, 1.3177, 1.3443
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GBPUSD - UK inflation reaches new highs
According to the June report, consumer prices rose by 0.8% compared to the previous month, and the annual rate rose to 9.4%, which was an absolute record among the world’s leading economies. In turn, the Producer Price Index in just a month increased by 1.8%, and the annual value was 24.0% compared to 22.4%, shown in May. It is already becoming clear that any measures taken by the Bank of England are not able to contain the negative dynamics and, most likely, by the end of the year inflation will indeed exceed the 10.0% barrier, as some experts have previously anticipated. Investors were also disappointed with the report on the dynamics of changes in DCLG House Price Index, where now the annual value is 12.8%, which was not the case in the entire history of observations.
GBPUSD is trading within the global downtrend channel, reversing towards growth. Technical indicators hold a sell signal, but do not exclude an upward correction: the range of the Alligator indicator EMAs fluctuations started to narrow down and the histogram of the AO oscillator forms ascending bars.
Support levels: 1.1815, 1.154 | Resistance levels: 1.2150, 1.2627
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Crude Oil - lower demand for gasoline in the USA puts pressure on quotes
Earlier, data from the Energy Information Administration of the US Department of Energy (EIA) were published, which put pressure on the positions of the trading instrument. In particular, oil reserves decreased by 0.446M barrels, and distillates — by 1.296M barrels, while gasoline reserves in the USA immediately increased by 3.498M barrels, which worries investors, since such a rapid drop in gasoline demand during the summer car season can mean serious problems in the national economy. Probably, the population cannot pay for fuel at the new high tariffs, which threatens to further reduce its sales. An additional factor of pressure on prices is the resumption of production at a number of fields in Libya, where a regime of force majeure was previously announced.
Now the trading instrument is testing the mark of 103.12 (Murray [1/8]), consolidation below which will allow the quotes to continue moving to the area of 100 (Murray [0/8], Fibo retracement 50.0%) and 96.88 (Murray [-1/8]). The key for the “bulls” is still the level of 108, the breakout of which will be a catalyst for growth to the levels of 112.5 (Murray [4/8]), 115.62 (Murray [5/8]).
Technical indicators signal the continuation of the decline: the Bollinger Bands are directed downwards, the Stochastic is reversing downwards in the overbought zone, and the MACD histogram is stable in the negative zone.
Resistance levels: 108, 112.50, 115.62 | Support levels: 103.12, 100.00, 96.88
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USDJPY - the Bank of Japan announced the continuation of the redemption of bonds
The changes will not affect the interest rate, which is expected to be kept at a negative level of –0.10%, but, according to the decision of the officials, the rules for the redemption of government bonds will be adjusted. Purchases of securities will continue with no volume cap, and transactions in bonds with a fixed rate of 0.25% will now take place every business day. The bank also intends to acquire shares of exchange-traded funds (ETFs) and real estate trusts worth about 12 trillion yen and 180 billion yen, respectively. In addition, corporate bond buybacks worth up to 3 trillion yen will continue. Thus, one can say with confidence that the high volatility in USD/JPY will increase, and against the backdrop of a declining US dollar, the yen has high chances for a correction.
The trading instrument is trading in the global uptrend, below the annual high of 139.00. Technical indicators are holding a buy signal, which started to weaken: the fluctuation range of the Alligator indicator EMAs is slightly narrowing and the histogram of the AO oscillator is forming new descending bars and approaching the transition level.
Support levels: 136.7, 134.2 | Resistance levels: 139, 141
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Silver - demand for silver is actively declining
To assess the current trends in the market, it is enough to refer to the statistics on the demand for the assets of the metal group on the commodity exchange. According to the latest report from the US Commodity Futures Trading Commission (CFTC), investor interest in silver contracts is so low that it could fall into negative area for the first time in three years by the end of this month. The last time such a strong negative trend was observed in the early summer of 2019, when metal quotes were around 15 dollars per ounce. It follows from the statistics that last week the number of net speculative positions on the asset was fixed at around 3.2K.
Quotes are gradually decreasing and setting new annual lows. Technical indicators maintain the global sell signal: the range of EMA fluctuations on the Alligator indicator expands in the direction of decline, and the histogram of the AO oscillator is forming descending bars, being in the sales zone.
Support levels: 18.40, 16.81 | Resistance levels: 19.30, 20.63
USDCHF - trading instrument is preparing to continue to decline
However, there are no prerequisites for the strengthening of the franc at the moment either. Instead, the economic situation in Switzerland is rapidly deteriorating, and in the near future the country may face an acute energy crisis. At least, this is what Michael Frank, director of the VSE association of Swiss electricity companies, said. According to him, power outages were caused by a reduction in gas supplies from Russia and the shutdown of nuclear power plants in France for maintenance. The only way to stabilize the situation, Frank sees a phased reduction in resource consumption, which, in particular, includes limiting the illuminating of shop windows and streets, and if this is not enough, then turning off individual regions for four hours in turn. The Swiss authorities predict an increase in the negative dynamics of electricity prices. According to the head of the government’s advisory commission for electricity, Elcom, Urs Meister, ordinary citizens’ electricity bills could grow by an average of 20% next year. This conclusion comes from a survey of suppliers who intend to raise prices by 47% amid rising coal prices, likely problems with exports from neighboring countries and global supply uncertainty.
On the global chart of the asset, the price is correcting within the lateral channel, preparing to continue the local decline. Technical indicators have almost reversed and issued a sell signal: fast EMAs on the Alligator indicator came close to the signal line, and the AO oscillator histogram has already moved into the sell zone, continuing to form descending bars.
Support levels: 0.9652, 0.953 | Resistance levels: 0.9739, 1
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EURUSD - the ECB raised its base rate for the first time since 2011
Euro quotes reacted ambiguously to the decision of the European Central Bank (ECB) to tighten monetary policy at a more aggressive pace. The result of the meeting of the regulator, which took place the day before, was an increase in all three key indicators by 50 basis points at once for the first time after an 11-year break. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50%, 0.75% and 0.00% respectively, with effect from 27 July 2022. In addition, the ECB noted the expediency of continuing the “hawkish” course. In particular, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) will continue, and the launch of Transmission Protection Instrument (TPI) will be announced, which will minimize discrepancies in borrowing costs for euro area countries. As a result, it is obvious that the ECB considers the current time to be suitable for a more serious increase in rates and hopes in this way to significantly reduce the rapid inflation by autumn, bringing it to the target of 2.0% in 2023.
Despite the external pressure, EUR/USD is holding within the global downward channel and is now forming another wave of corrective growth. Technical indicators gave a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.
Support levels: 1 , 0.9752 | Resistance levels: 1.0277, 1.0586
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CAC 40 - French stock market is correcting upwards
Thales Group, a company producing information systems for aerospace, military and maritime applications, recorded quarterly revenue at the level of analysts’ expectations in the region of 4.05 billion euros, surpassing the figure of the previous period at the level of 3.74 billion euros; and advertising and communication company Publicis Groupe reflected revenue of 3.07 billion euros, the best result since 2016. Macroeconomic data will also be published today, including Services and Manufacturing PMIs, where a decline to 52.7 points and 50.8 points, respectively, is projected.
The asset quotes are in the global downtrend, approaching the resistance line. Technical indicators have already reversed and issued a new buy signal: the fast Alligator indicator EMAs crossed the signal line from below, and the histogram of the AO oscillator moved to the buy area, forming ascending bars.
Support levels: 6070, 5827 | Resistance levels: 6254, 6568
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EURTRY - The strengthening of the euro may be temporary
Thus, the Central Bank of Turkey left the discount rate at 14.0% for the seventh month in a row, even despite the continuing increase in inflation in the country, which reached 78.62% and the change in the global trend towards tightening monetary parameters taken by the world financial institutions. At the same time, officials said that the price growth is caused by an increase in the cost of energy, geopolitical risks and non-economic reasons and hope for an improvement in the situation at the beginning of next year. The European Central Bank (ECB), on the contrary, began to take decisive steps in the fight against the unprecedented rise in consumer prices, which led to the strengthening of the position of the single currency. Officials raised rates for the first time in 11 years, and immediately by 50 basis points. The main interest rate is now 0.50%, the margin rate is 0.75%, and the deposit rate is 0.00%. ECB Head Christine Lagarde said that the adjustment of indicators is caused by the rapid pace of inflation, which affects more and more economic sectors, as well as forecasts of further preservation of indicators at high levels. The beginning of the rate hike cycle has strengthened the euro’s position against its main competitors, but the positive dynamics may be short-lived, as the European economy continues to experience increased pressure from the Ukrainian crisis and interruptions in energy supplies.
The price is testing the 17.96, consolidation below which will allow quotes to continue moving to the levels of 17.5781 (the middle line of the Bollinger Bands) and 17.18. The key for the “bulls” is the mark of 18.3593, with a breakout of which growth will be able to resume to the area of 18.75, 19.14. Technical indicators do not give a single signal: the Bollinger Bands are reversing horizontally, the Stochastic is preparing to leave the overbought zone and form a sell signal, and the MACD histogram is increasing in the positive zone.
Resistance levels: 18.35, 18.75, 19.14 | Support levels: 17.96, 17.57, 17.18
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USDCHF, H4
On the four-hour chart, the Three “bearish” steps downwards trend continuation pattern is formed, which signals increasing sales. However, the asset has also formed the Doji rickshaw model. This figure means that the forces of “bulls” and “bears” are equal at the moment, but its appearance in a local base can mean both a reversal of quotes up and a continuation of the downward movement. In the current situation, the decrease to the support level of 0.9538 seems more likely, which breakdown will allow sellers to move into the range of 0.9410–0.9167. An alternative option is possible after the price breaks the upper border of the trend channel and the resistance level of 0.9667 with the growth target at 0.9828–1.0032.
USDCHF, D1
On the daily chart, at 0.9828, Shooting star and Hanging man reversal patterns are forming, from where the asset rushed down. Also, a series of Three “bearish” steps candlestick analysis patterns have formed, which are models for the continuation of a downtrend. Probably, the asset is trying to test the key support level of 0.9538, and if the “bulls” fail to hold it, then the movement will continue to the area of 0.9410–0.9167.
Support levels: 0.9538, 0.941, 0.9167 | Resistance levels: 0.9667, 0.9828, 1.0032
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AUDUSD: upward correction in the asset
At the recent Australian Strategic Business Forum – Melbourne, the head of the Bank of Australia, Philip Lowe, announced a preliminary forecast that inflation in the country would accelerate, and new anti-records may be reflected in the quarterly report, after which another peak in consumer prices will probably have to at the end of the year. Analysts suggest that in the second quarter, the figure will increase from the current 5.1% to 6.3% against the continued decline in key sectors of the economy. Thus, in June, Manufacturing PMI fell to 55.7 points from 56.2 points, and Service PMI – to 50.4 points from 52.6 points a month earlier. In his speech, the head of the financial department also said that the neutral key rate at the current inflation rate should be at least 2.5%, while now it consolidates at 1.35%. Faster labor productivity growth will likely be a catalyst for the higher value.
The price remains inside the Expanding formation pattern on the global chart, rising within the local trend. Technical indicators signal the presence of an upward correction: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has approached the transition level.
Support levels: 0.6855, 0.671 | Resistance levels: 0.6978, 0.712
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XAUUSD - Investors are actively reducing short positions
The current growth was the reaction of traders to the slowdown in the USD dynamics, which has been putting pressure on the quotes of the precious metal for two months now. The proximity of the US Federal Reserve meeting, scheduled for Wednesday, July 27, provoked an outflow of investor capital into conservative gold, which traditionally acts as a safe-haven asset in situations of uncertainty. Of course, if the interest rate is increased by 75 or even 100 basis points, a short-term decline in the trading instrument is inevitable, but after that, the global correction may resume.
On the weekly chart, the formation of a long-term downward channel continues, with dynamic boundaries of 1800.0–1650.0. The price is trying to start a new wave of growth. Technical indicators are holding a sell signal, which is slightly weakening: fast EMAs on the Alligator indicator have begun to approach the signal line, and the AO oscillator histogram is forming new rising bars in the sell zone.
Support levels: 1695, 1650 | Resistance levels: 1741, 1786
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Crude Oil - Global oil supply continues to rise
The pressure on the quotes of the trading instrument is exerted by messages from Libya, where the growth in the oil production has already exceeded 800.0K barrels per day after the resumption of work at five fields. Also, the national Ministry of Oil and Gas representatives announced plans to increase daily production to 1.2M barrels by next month. Preliminary data on oil supply from Iraq and Saudi Arabia to the EU countries also speak about the stabilization of supply. Thus, Bloomberg reports that Saudi Arabia transports oil by tankers to Egypt, from where it is sent to the European market via the Sumed pipeline. According to statistics, since the beginning of July, the pumping has already amounted to more than 1M barrels of oil per day, which is almost twice as much as last year. As for supplies from Iraq, they are carried out by sea, and in July, the figure here reached 1.2M barrels per day, while the total volume of fuel supplied from the countries of the Middle East was recorded at around 2.2M barrels per day, which also 90% higher than the January value.
On the weekly chart, the price continues to fall towards the support line of a possible downtrend. Technical indicators keep a stable sell signal: fast EMAs of the Alligator indicator move away from the signal line, and the AO oscillator histogram, being in the sell zone, forms new correction bars.
Support levels: 95.62, 88.7 | Resistance levels: 101.1, 108
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Nasdaq 100 - US stock market corrects
The corporate segment of the stock market continues to publish financial statements for the second quarter. So, shares of Snap Inc., owner of the Snapchat messenger, became the leader of the fall yesterday, after the net loss per share increased to –0.26 dollars from –0.22 dollars in the previous period. Quarterly revenue also fell short of analysts’ expectations, amounting to 1.1B dollars against the forecast of 1.14B dollars. Meanwhile, financial services firm American Express Co. released positive data with revenue of 13.4B dollars, well above its preliminary estimate of 12.5B dollars, while earnings per share of 2.57 dollars improved its forecast from 2.42 dollars.
The index quotes continue to form a global downward channel, rising towards the resistance line. Technical indicators are in a buy signal: fast EMAs on the Alligator indicator are holding above the signal line and expanding the range of fluctuations. At the same time, the AO oscillator histogram steadily rises in the buying zone.
Support levels: 11816, 11087 | Resistance levels: 12688, 13531
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BTCUSD - Predicted US Fed rate hike pushes prices downwards
It is expected that the financial authorities will once again adjust the interest rate indicator by 75 or even 100 basis points to combat record inflation. Traders will be watching for comments from the head of the regulator, Jerome Powell. If they turn out to be “hawkish” and the official confirms the need for further significant tightening of monetary parameters, the US dollar will receive an additional driver for growth.
In turn, the general pressure on the cryptocurrency market and BTC continues to be exerted by the problems of technology companies focused on digital assets. In particular, last week, it became known that the SkyBridge Capital hedge fund was temporarily suspending payments on investment shares. The American cryptocurrency exchange Blockchain.com announced the dismissal of 25% of its employees due to a difficult market situation. Marketplace Gemini, whose management has already gone on a cut of 10% of the staff, intends to fire another 7% of specialists to reduce costs.
In general, BTC has slightly strengthened its position since mid-July, but quotations’ growth does not look sufficient to break the long-term downtrend.
The cryptocurrency price is close to the middle line of Bollinger bands, around 21500. If it is broken down, the decline may continue to 18750 (the bottom line of Bollinger bands), and 16900. The key “bullish” level is 25000, the breakdown of which will allow the quotes of the trading instrument to grow to the area of 28125, and 31250. Technical indicators do not give a single signal. Bollinger bands reverse upwards, the MACD histogram is near the zero line, its volumes are insignificant, and Stochastic is pointing downwards.
Resistance levels: 25000, 28125, 31250 | Support levels: 21500, 18750, 16900
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