Forex, Commodities, Crypto Market Analysis by Solid ECN

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422

USDCAD: the pair is down 2.3% from July highs

On July 13, the regulator raised the interest rate by 100 basis points to 2.5%. However, the markets expected conflicting inflation figures. According to macroeconomic statistics, CPI was recorded at 6.2% YoY, higher than the analysts’ forecast of 5.9% and the previous value of 6.1%, but standard inflation slowed down in June. The indicator was lower than the forecast of 0.9% MoM and the May value of 1.4%, probably due to the seasonal factor and the adaptation of enterprises to the new conditions of monetary policy.

The long-term trend in the USDCAD pair remains upward. The key support for the trend is at 1.2835, and market participants tested it last Friday, which resulted in quotes rising to the 1.2938 area. Accordingly, for the upward dynamics to continue, buyers need to break through it. Otherwise, the USDCAD pair is expected to decline and renew the July low of 1.2835.

The mid-term trend changed to a downtrend last week. Traders broke through the key trend support 1.2996–1.2974. The sell target zone is 1.2777–1.2756. The key trend resistance is shifting to 1.3064–1.3042. If the participants overcome it within the correction, it will be possible to consider short positions with the first target at the last week’s low.

Resistance levels: 1.2938, 1.3065, 1.3157 | Support levels: 1.2835, 1.2525

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423

EURUSD - The development of the energy crisis increases pressure on the euro

The European economy continues to slide smoothly into recession, and one of the key factors in the current downturn is the rapid development of the energy crisis. So, yesterday, the Russian company Gazprom, which supplies gas to the EU countries, announced that one of the turbines of the gas pipeline would be stopped for repair, and the total volume of pumping from July 27 will decrease to 33M cubic meters per day. Thus the low level of supplies will be corrected by almost half. The head of the European Commission, Ursula von der Leyen, called on the leadership of the EU states to prepare for a complete halt in supplies from Russia against the background of the sanctions policy. To avoid critical consequences, the official announced the need to save resources even in those territories where dependence on Russian resources is insignificant. Earlier, a document was presented: it obliged all states of the region to submit projects for a voluntary reduction in gas consumption by 15% by the end of March next year by the end of September this year, which was criticized. Yesterday, there were reports of numerous adjustments being made to adapt to a particular country’s needs. Today, the project was agreed upon at a special meeting of EU energy ministers in Brussels.

Despite serious pressure, the EUR/USD pair is within the global downward channel, approaching the resistance line. Technical indicators continue to hold a sell signal, which is gradually weakening: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0130, 0.9952 | Resistance levels: 1.0278, 1.0494

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424

NZDUSD - New Zealand households face rising cost of living

Yesterday, Statistics New Zealand (Stats NZ) published data on the cost of living index for various household groups, noting an increase in the indicator in June of this year by 7.4% compared to the same period in 2021. Thus, the cost of living for households with high average expenses increased by 8.1%, and for households with low expenses – by 6.5%, reflecting the most rapid negative dynamics since 2008, the key drivers of which, as noted, were high tariffs for gasoline and utilities.

The NZDUSD pair continues to trade within a global downtrend, gradually rising towards the local resistance level. Technical indicators are ready to reverse and signal to start buying: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has moved into the buying zone, having formed the first rising bar.

Support levels: 0.6213, 0.6062 | Resistance levels: 0.6315, 0.6421

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425

Crude Oil - Demand for oil contracts is still strong

Oil quotes began the morning session with growth after Reuters reported a drop in US strategic reserves (SPR) to its lowest level since 1985. Thus, according to the national Ministry of Energy report, for the week from July 16 to July 22, the indicator decreased by 5.6M barrels. Thus, the total volume of stocks in storage facilities fell to 474.5M barrels, and this figure will continue to decrease since, according to the plans of the US government, the launch of sour oil on the market is scheduled before the end of this year.

On the weekly chart, the price, having rebounded from the support line of the wide channel, turns in the direction of growth, forming a local Head and shoulders pattern. Technical indicators keep a sell signal but have already started a reversal: fast EMAs of the Alligator indicator are approaching the signal line, and the histogram of the AO oscillator, being in the sell zone, is forming new upward bars.

Support levels: 96.93, 92.4 | Resistance levels: 103.61, 112.32

426

S&P 500 in anticipation of the publication of corporate reports

Today, several major players in the US market will present data on the results of the second quarter. Thus, the world leader in information technology, software, and IT services, Microsoft Corp., expects revenue growth at 52.43B dollars, higher than 49.36B dollars shown a quarter earlier. In turn, the Alphabet Inc. holding, which owns the Google brand, predicts a figure of 70.04B dollars against 68.01B dollars. Visa Inc. will record quarterly revenue in the region of 7.06B dollars, which is in line with the 7.19B dollars shown in the previous period.

The index quotes are traded within a global downward channel, heading towards the resistance line. Technical indicators keep a stable buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is in the buy zone, continuing to form rising bars.

Support levels: 3907, 3674 | Resistance levels: 4013, 4182

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427

Silver Technical analysis

H4
On the four-hour chart, there is a long-term consolidation of the asset in the range of 18.12–20, and at the moment, above 18.12, the quotes have formed a Morning star candlestick analysis model, which is a reversal formation at the bottom. Also, an Inverted hammer pattern has formed, the green color of which emphasizes the “bullish” strength. The combination of these figures indicates that the trading instrument has reached the bottom and a high probability of further recovery to the resistance level of 20.56, the breakout of which will increase the upward dynamics to the zone of 22.16−24.22. An alternative scenario is possible if the “bulls” fail to hold the key level of 18.12. The instrument may drop to the range of 16.57–14.6.

D1
On the daily chart, the falling Wedge price pattern is being completed. The fact that the asset has reached the bottom is also indicated by the appearance above the support level of 18.12 of a series of Hammer and Inverted hammer figures. Also, the confirmation of the increasing activity of buyers can serve as a model of a “bullish” Belt hold. In this situation, the probable scenario of the price movement seems to be the breakout of the upper border of the Wedge with further growth to the area of ​​20.56−24.22.

Support levels: 18.12, 16.57, 14.6 | Resistance levels: 20.56, 22.16, 24.22

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428

GBPUSD - The market is waiting for the US Federal Reserve meeting

However, the current trend is not a consequence of the strengthening of the British currency since the fundamental background is still rather negative. Yesterday, Reach, the publishing house that owns the Daily Mirror and Daily Express newspapers, reported a significant reduction in the number of pages in printed versions due to a record increase in the cost of paper, which in turn is a consequence of the current energy crisis and rapid inflation. According to The Guardian, the publisher’s newsprint spending increased by 65%, leading to a 6.0% decline in pages in popular newspapers in the second quarter, the lowest since the acute phase of the COVID-19 pandemic. The increase in the cost of consumables was the driver of Reach Plc. profit drop by 31% in six months. As for the macroeconomic statistics, yesterday, July data on the change in the volume of retail sales from the Confederation of British Industrialists (CBI) were presented, which was poor: the indicator strengthened the negative dynamics from –4 points to –5 points but preliminary estimates for August statistics were even worse, reaching –14.0 points.

The trading instrument moves within the global downward channel, reversing upwards. Technical indicators continue to weaken the current sell signal: indicator Alligator’s EMA oscillation range narrows, and the histogram of the AO oscillator forms ascending bars, approaching the transition level.

Support levels: 1.1992, 1.1762 | Resistance levels: 1.2107, 1.2355

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429

USDJPY - Bank of Japan continues buying bonds

As previously reported, officials kept the interest rate at a negative value of –0.1% and announced their intention to continue buying government bonds from the market without setting a cap to consolidate their yield around 0 %. In particular, the bank will purchase 10-year bonds every working day at a consolidated rate of 0.25% for an unlimited amount. In other words, the agency will continue to provide over-issuance, which is observed at the moment and may be one of the reasons for the local strengthening of the yen against the major world currencies.

Yesterday, the Japanese government, in its economic report, gave an optimistic assessment of the development of the national economy against the backdrop of increased consumer activity. Indicators are expected to return to growth in the second quarter after falling at the beginning of the year, although the pace continues to be affected by prolonged disruptions in the supply chains of high-tech devices that are exported from the country, rising raw material costs, and fluctuations in financial markets.

The trading instrument moves within the global uptrend. Technical indicators keep a weakening buy signal: indicator Alligator’s EMA oscillation range narrows and the AO oscillator histogram forms new downward bars, approaching the transition level.

Support levels: 136.05, 133.78 | Resistance levels: 137.77, 139.39

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430

USDCAD - The instrument continues its downward correction

Yesterday, traders only paid attention to the June data on wholesale sales, which increased by 0.5%, yielding analysts’ forecasts of 2.0%. On Friday, Statistics Canada will publish May GDP data, which for the first time in the last nine months, may slow down to –0.2%. However, given the increase in April by 0.3%, there is no talk of a recession in the national economy since the quarterly value, in this case, will be adjusted to 0.1%.

On the weekly chart, the price is trading within a wide ascending channel with dynamic boundaries 1.26 – 1.32 and is falling towards the support line. Indicator Alligator’s EMA oscillation range expands downwards, and the histogram of the AO oscillator forms new downwards bars, moving into the sell zone.

Support levels: 1.2816, 1.2644 | Resistance levels: 1.2936, 1.3052

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431

XRPUSD - Murrey analysis

The XRPUSD pair continues to trade within a long-term downtrend. However, in early June, the quotes formed a sideways range of 0.293–0.366, which they still cannot leave. Last week, the cryptocurrency again tested its upper limit but failed to break through higher and began to decline. At present, the price of the asset has consolidated below 0.3418, supported by the middle line of Bollinger bands, which gives the prospect of further decline to 0.2930. In case of a repeated breakout of 0.3418, the price will return to the area of ​​0.3662. In general, movement is predicted within the formed sideways range since there are no serious drivers for a trend change in the market.

Technical indicators show opposite signals, confirming the uncertainty of the market: Bollinger bands are directed upwards, Stochastic reversed downwards, and the MACD histogram is near the zero line. Its volumes are insignificant.

Resistance levels: 0.3418, 0.366, 0.39 | Support levels: 0.3174, 0.293

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432

AUDUSD, H4
On the four-hour chart, at 0.6860, there is the formation of the Three advancing white soldiers pattern, meaning buyers have seized the initiative and intend to restore positions. In turn, the appearance of the Three “bullish” steps pattern also signals the continuation of the upward dynamics, and the “bullish” Marubozu pattern indicates the predominance of “bullish” sentiment. In the current situation, the asset will most likely continue to recover to the resistance level of 0.7037, which will allow the quotes to head to the zone of 0.7191−0.7397. An alternative scenario is possible after the consolidation below the support level of 0.6860, and then the downward movement may intensify to 0.6437.

AUDUSD, D1
On the daily chart, a Falling wedge price pattern is being formed, from which the asset managed to break up, but its implementation has not yet been completed. The “bullish” mood for the instrument is also confirmed by a series of formed Three “bullish” steps figures, which serve as signals for the continuation of the uptrend. Most likely, the trading instrument will strengthen the upward dynamics to 0.7037, consolidation above which will become a catalyst for the movement of quotations to the area of ​​0.7191−0.7397.

Support levels: 0.686, 0.6686, 0.6437 | Resistance levels: 0.7037, 0.7191, 0.7397

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433

EURUSD - The decision of the US Federal Reserve disappointed investors

This week, within the framework of an extraordinary meeting, the energy ministers of the EU countries reached a compromise on the issue of reducing the consumption of “blue fuel” by 15% from the average level over the past five years. The emergency plan, developed in the event of a complete cessation of energy supplies from Russia, assumes a decrease in the volume of gas used in the upcoming winter heating season, starting from August this year to the end of March 2023. The driver for the decision was the reduction in the volume of fuel transported through the Nord Stream gas pipeline to 1/5 of the throughput capacity due to technical work carried out on the gas turbine engine. The market took this as a signal of an escalation of political tension between Russia and the European Union. Nevertheless, despite the decrease in the volume of supplies, the filling of gas storage facilities continues and, according to experts, may reach 80% by November 1. As for the state of the economies of the EU countries, the situation continues to deteriorate, and, as shown by the German consumer climate index for August, the decline in the indicator increased to –30.6 points, which is the absolute minimum in the history of observations.

The trading instrument moves within the global downward channel, rising towards the resistance line. Technical indicators hold a sell signal, which is weakening: fast EMAs on the Alligator indicator is approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0112, 0.9952 | Resistance levels: 1.0259, 1.0494

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434

Visa - Technical analysis

The shares of Visa Inc., the largest American multinational company that provides payment services, are developing a corrective trend, and the instrument is trading around 209. On the daily chart, a global Diamond pattern with border levels of 187–230 is developing, and at the moment, the price is clamped inside its limits.

On a four-hour chart, a Volumetric candle candlestick analysis pattern appears with local resistance located around 216.60, from where buy positions may be formed, and a support level of 199.9, from which new sell positions may be opened. In case of orientation to the signals of the pattern, the readings of technical indicators do not need to be considered. Still, at the moment, they signal a possible continuation of growth: indicator Alligator’s EMA oscillation range is directed upwards, and on the AO oscillator, the histogram is in the buy zone.

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435

XAUUSD - Investors turn to gold in anticipation of a US recession

Investors continue to monitor the economic situation in the US. Today, data on Q2 GDP will be presented, and preliminary estimates of experts have recorded a resumption of positive dynamics, reaching a value of 0.5% after falling by 1.6% in the previous period. However, since the publication of statistics for the first quarter, US Federal Reserve officials raised the interest rate by 1.50%, and inflation accelerated from 7.0% to 9.1%, which is completely contrary to positive forecasts. Traders are focused on the comments of US Treasury Secretary Janet Yellen, who will make a speech immediately after the release. Earlier, the official stated the need to reduce inflation, considering preserving a strong economy. While a recession is becoming inevitable, she says there are no signs of a downturn.

On the daily chart, the formation of a wide downwards channel with dynamic boundaries 1800 – 1650 continues, and now the price is growing towards the resistance line. Technical indicators weaken the sell signal: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram, being in the sell zone, is forming new rising bars.

Support levels: 1717, 1681 | Resistance levels: 1752, 1808

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436

General Electric - Growth on the back of a strong quarterly report

The company’s financial report for the second quarter exceeded analysts’ expectations, allowing the issuer’s shares to consolidate in an uptrend. Thus, the total volume of orders amounted to 18.7B dollars, which is 2% higher than the same period a year earlier, and the volume of organic orders increased by 4.0%. Total GAAP revenue was recorded at 18.6B dollars, up 2% from last year. Adjusted revenue beat market estimates for the first time in the last six quarters, standing at 17.9B dollars versus 17.30B dollars expected. GAAP adjusted earnings per share were 0.78 dollars. In their full-year forecast for 2022, General Electric Co. expects earnings per share to remain at the lower end of the 2.8–3.5 dollars per share range.

The asset is being corrected within the global downward channel, moving away from the support line. The technical indicators reversed and gave a new buy signal: indicator Alligator’s EMA oscillation range expands upwards, while the histogram of the AO oscillator has moved into the buy zone and is forming upward bars.

Support levels: 67.25, 60.1 | Resistance levels: 73.3, 85.2

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437

NZDUSD, H4

On the four-hour chart, at the support level of 0.6223, a Marubozu pattern is forming, signaling that the buyers have seized the initiative. The appearance of two Hammer patterns also confirms the strengthening of the “bullish” sentiment. In the current situation, the continuation of the upward trend towards the resistance level of 0.6371 is possible, consolidation of the price above which will allow the asset to recover lost positions and head to the area of ​​0.6541− 0.6711. If the “bears” break the support level of 0.6223, the negative dynamics will develop to 0.5920.

NZDUSD, D1

On the daily chart, there is a falling Wedge price pattern, from where the price of the trading instrument went upwards. Its development has not yet been completed, and the upward dynamics of quotations are intensifying. It is confirmed by forming a series of Hammer reversal patterns, signaling the bottom has been reached. Currently, the price is trying to break the resistance level of 0.6371. If successful, the quotes will continue to move to the area of ​​0.6541− 0.6711.

Support levels: 0.6223, 0.6106, 0.592 | Resistance levels: 0.6371, 0.6541, 0.6711

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438

The shares of Alcoa, an American steel company, are correcting around 50.

On the daily chart of the asset, the price left the global downwards channel with dynamic boundaries at 23 – 47, having broken the resistance line at 46 yesterday and consolidated in an uptrend. On a four-hour chart, it is seen that further global dynamics will most likely continue within an uptrend, and the May low at 53.7 is the key resistance, consolidation above which will allow the instrument to strengthen its positions.

Technical indicators reversed and gave a new buy signal: indicator Alligator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator has moved into the buy zone, continuing to form rising bars.

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439

Last week, the BTCUSD pair had ambiguous dynamics.

First, the price fell to the 22200 area due to fears of a sharp increase in interest rates and the “hawkish” rhetoric from US Federal Reserve officials, as inflation in the country reached a record level of 9.1%. The regulator’s decision was restrained, the interest rate was raised only by 75 basis points, and the head of the department, Jerome Powell, acknowledged the possibility of a further slowdown in its growth, which provoked a positive trend in “digital gold.” The following data on the US gross domestic product (GDP) decline in the second quarter by 0.9%, which means the beginning of a technical recession in the US economy, contributed to an even greater decline in the dollar and the strengthening of alternative assets. Investors have again turned to cryptocurrencies as shelter assets, fearing worsening economic problems, which has caused enthusiasm among members of the digital community. Thus, the CEO of the Binance exchange, Changpeng Zhao, said in an interview with CNBC that the current increase in inflation, along with the decline in the world’s leading economies, could lead to further popularization of digital assets. The businessman also considers holding the important mark of 20000 by the price as a positive moment, from which the beginning of a new growth cycle is possible.

However, the current situation does not yet mean a reversal of the long-term downtrend since the US Federal Reserve, despite the likely slowdown in monetary policy tightening, will not completely abandon it, and the final quarterly US GDP data may turn out to be better than the preliminary ones, which will once again force investors to buy the dollar.

The price corrected downwards from the area of ​​24600, but for a serious decline, it needs to consolidate below the middle line of Bollinger bands around ​​22400. In this case, the quotes will be able to drop to 20000 (bottom line of Bollinger bands) and 18750. Otherwise, growth will resume to 25000 and 28125. Technical indicators suggest that the short-term uptrend will continue, as Bollinger bands are directed upwards, the MACD histogram is increasing in the positive zone, while Stochastic is leaving the overbought zone, but so far, the downside potential is seen as limited.

Resistance levels: 25000, 28125, 31250 | Support levels: 22400, 20000, 18750

440

GBPUSD - Trading within the global downward channel

At the end of last week, almost 80% of all train traffic in the country came to a halt, paralyzing the domestic supply chains of goods due to the strike of railway workers, caused by a sharp increase in prices for food and goods, which has been going on since the beginning of summer. Also, the British pound is negatively affected by macroeconomic statistics: the volume of mortgage lending in June fell to 5.27B pounds from 8.04B in May, while the volume of private net loans fell to 7.1B from 8.9B a month earlier. The reason for the negative dynamics of the indicator was the active increase in the interest rate, which prevents consumers from planning the cost of loans.

The trading instrument is moving within the global downward channel, approaching the resistance line. Technical indicators reversed and gave a stable buy signal: indicator Alligator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator is forming rising bars in the buying zone.

Resistance levels: 1.2268, 1.2652 | Support levels: 1.2063, 1.1757

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441

NZDUSD - New Zealand housing market is stable

Yesterday, Statistics New Zealand (Stats NZ) released its June report on the state of the housing market: building permits decreased by 3.0% from the May dynamics of –0.5%, and the adjusted value lost 2.3% compared to 0.5% recorded earlier. However, there is a positive trend: the actual number of houses built in June amounted to 50.736K, which is 14% more than last year, and the number of new houses per thousand residents is 9.9 units against 8.7 units. This statistic may indicate that the global construction market is stable, and the local slowdown does not seriously impact it.

The trading instrument is moving within the global downtrend, rising towards the local resistance. Technical indicators reversed and gave a signal to buy: fast EMAs on the Alligator indicator crossed the signal line upwards, and the AO oscillator histogram moved into the buying zone, forming several upward bars.

Resistance levels: 0.6332, 0.6555 | Support levels: 0.6237, 0.6081

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