The shares of Caterpillar, a global manufacturer of construction and mining equipment, are trading within a global corrective trend, around 194.
On the daily chart of the asset, a global Expanding formation pattern with dynamic boundaries of 165–250 is forming, within which an upward wave with the target near the resistance line around 250 develops. A reversal has formed on the four-hour chart, and there is no doubt that the upward dynamics will continue. Since the current wave is the seventh, the probability of quotes going beyond the lower border of the pattern around 165 is extremely small.
It is confirmed by technical indicators that have reversed and are holding a stable buy signal: fast EMAs on the Alligator indicator crossed the signal line and began to expand the range of fluctuations, and the AO oscillator histogram is forming new bars in the buy zone.
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Gold is correcting at 1774 amid strengthening of the downtrend of the US dollar, which fell from 108 to 105 in the USD Index, acting as a catalyst for the movement of capital into safe-haven assets.
Swap dealers have seen a record liquidation of short positions since the week before last, and the continuation of this trend may mean that the trend in gold is likely to change soon. The report of the US Commodity Futures Trading Commission (CFTC) also showed a decrease of 5.153K contracts in this category, which significantly reduced the difference in the accumulated positions. Now buyers have 92.205K contracts, and sellers have 174.234K contracts.
The situation on the gold market is developing in such a way that the balance of sellers and buyers may soon change in favor of the latter. At the very least, the number of general speculative positions backed by money obviously slowed down the decline: if in early July they were adjusted by an average of 15 - 20K contracts per week, last week the reduction was only 2.3K contracts.
On the global chart of the asset, the formation of a wide descending channel with dynamic boundaries 1780 – 1650 continues, and now the price is making its first attempt to overcome the resistance line. Technical indicators weaken a sell signal: fast EMAs on the Alligator indicator have almost approached the signal line, and the AO oscillator histogram is forming upward bars, approaching the transition level.
Support levels: 1753, 1696 | Resistance levels: 1787, 1847
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Nasdaq 100 - Correction in the dollar is a catalyst for the growth of the stock market
As for the corporate segment, it is not planned to publish new financial reports of companies until Wednesday, but investors are assessing the impact of the fundamental background on the issuers’ quotes. Thus, the shares of the aircraft manufacturer Boeing Co. showed rapid growth amid reports that the specialists of three factories for the production of military aircraft in Missouri decided to postpone their strike, as management presented new terms of the working contract. The growth is also shown in the stocks of the largest Chinese company operating in the field of Internet commerce, Alibaba Group Holding Ltd., after the negative regarding the possible delisting of the company from the NYSE exchange was leveled.
The situation in the domestic bond market, where the downward correction continues, also contributes to the growth of stock indices. Thus, the yield rate on popular 10-year securities is 2.543% and today it is decreasing by 2.39%, and the yield on conservative 20-year bonds has dropped to 3.069%, having lost 1.55% since the beginning of trading.
The index quotes continue to form a global descending channel, approaching the resistance line. Technical indicators are in the state of a buy signal: fast EMAs on the alligator indicator continue to stay above the signal line and expand the range of fluctuations, and the histogram of the AO oscillator is steadily increasing in the buy zone.
Support levels: 1268, 11810 | Resistance levels: 13090, 13880
ETHUSD - The decline may continue
This week, the ETHUSD pair is correcting downwards, losing the positions won last week, against the background of a possible slowdown in the pace of monetary policy tightening in the USA and the expectation of an early transition of the Ethereum network to the PoS proof algorithm.
Experts note that there is “fatigue” in the market from the constant news about the approaching merger of the Ethereum 1.0 and Ethereum 2.0 networks. Most investors have already put money in the purchase of ETH and are now waiting for an immediate update, which is scheduled for mid-September. Up to this point, observers do not rule out the continuation of the pair’s decline or its consolidation.
In addition, the overall pressure on the market is exerted by monetary factors. Despite the possibility of reducing the pace of interest rate hikes, which was mentioned last week by the head of the US Fed Jerome Powell, the regulator will not give up tightening monetary policy to combat inflation and will spend it for a considerable time, strengthening the position of the US currency in relation to competitors.
The price has corrected to the area of 1570, but for further serious decline it will need to consolidate below the strong support level of 1500 (the middle line of the Bollinger Bands, Fibo retracement 23.6%). In this case, the reduction targets will be 1375 and 1250. The key for the “bulls” remains the level of 1750, the breakout of which will give the prospect of resuming growth to the levels of 1875 (, Fibo retracement 38.2%), 2000, and 2125.
Resistance levels: 1750, 1875, 2000, 2125 | Support levels: 1500, 1375, 1250
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EURUSD - Statistics from the EU prevent further growth of the asset
The German economy is rapidly plunging into a crisis, and the retail sales volume, which fell into negative territory in June, amounting to –1.6% instead of 1.2% in May, confirms this trend. The indicator has already lost 8.8% YoY, an absolute anti-record in the entire history of observations. Statistics for the euro area show a negative trend: July Manufacturing PMI amounted to 49.8 points, which is lower than 52.1 points in the last month, comparable to the lows of spring 2020.
The trading instrument is moving within the global downward channel, heading towards the resistance line.
Resistance levels: 1.0262, 1.041 | Support levels: 1.0115, 0.9951
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Crude Oil - Investors pending OPEC+ decisions
Today at 12:00 (GMT+2), the ministers of the OPEC+ member countries will gather for a meeting via videoconference. Investors are watching the upcoming meeting with interest for several reasons. First, a new secretary-general, Haytham Al Ghais will be introduced, succeeding Mohammad Barkindo. The second reason lies in the timing of the implementation of the OPEC+ agreement. The fact is that the participating countries plan to reach pre-crisis levels of oil production by September, and in order to meet this deadline, production levels gradually increased to 432 thousand barrels per day in June and up to 648 thousand barrels per day in July. However, OPEC+ is currently 2.84 million barrels per day behind schedule, according to the OPEC+ Technical Committee, which could force the organization to take more “hawkish” moves at today’s meeting. Almost all parties to the deal are now at the limit of their production capacity, with only Saudi Arabia and the United Arab Emirates having spare capacity, which are likely to increase production levels further.
In this regard, there is no need to talk about a stable uptrend. In the event of a change in current plans, one should expect a continuation of a local decline in energy quotations, as world demand is not yet able to cope with such a high supply.
On the global chart of the asset, the price is kept within the local downward channel and may make a new attempt to overcome the support level in the near future.
Support levels: 91.68, 84.1 | Resistance levels: 97.57, 106.74
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ASX 200 - RBA adjusted monetary policy parameters
Earlier, the Australian regulator adjusted the interest rate by 50 basis points for the third time in a row, bringing it to 1.85%. Thus, the pace of monetary policy tightening has become the maximum since 1990 and, according to the head of the regulator, Philip Lowe, this is not the limit. The current increase is the bank’s reaction to inflation, which, according to data for Q2, reached 6.1% in annual terms, having increased by 1.8% compared to Q1. According to Lowe, by the end of this year, we should prepare for the fact that consumer price growth will reach 8.0%.
The price left the limits of the local descending channel and consolidated above the resistance line. Technical indicators reversed and gave a signal for the start of purchases: the fast EMAs of the alligator indicator are significantly higher than the signal line, and the histogram of the AO oscillator forms ascending bars while in the buying zone.
Support levels: 6926, 6712 - Resistance levels: 7045, 7280
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The shares of Tesla, an American electric car maker, are correcting around 921.
On the daily chart of the asset, the price is moving within the global downward channel with dynamic boundaries 1050 – 560 and is trying to approach the resistance line. On the four-hour chart, the signal is being processed after overcoming the upper limit of the local Triangle pattern around 755. There may be obstacles in the way of further upward movement of quotes, and the first serious of them may be the local resistance level of 955, which the trading instrument can reach today.
Technical indicators signal continued growth
Fast EMAs on the Alligator indicator are moving above the signal line, and the AO oscillator histogram is forming bars with an uptrend in the buying zone.
GBPUSD - Markets expect the US Federal Reserve to continue raising the rate
Yesterday, the analysts of the large bank UBS Group published a forecast regarding the prospects for the national currency for the autumn period, suggesting a decrease in quotations to 1.1500. Among the key reasons for the negative dynamics, experts cite high prices for electricity and energy resources amid the escalation of the military conflict in Ukraine, as well as problems in supply chains. Macroeconomic statistics confirm the deterioration of indicators: according to data for July, Composite PMI fell to 52.1 points from 53.7 points in June, and Services PMI corrected to 52.6 points from 54.3 points a month earlier and this is the lowest value since March 2021.
The trading instrument is moving within the global downward channel, coming close to the resistance line.
Resistance levels: 1.2244, 1.2651 | Support levels: 1.2059, 1.1818
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USDCAD - Canadian unemployment forecast to rise
Analysts predict the first increase since May 2021 in the average unemployment rate from 4.9% to 5.0% in July, which may be caused by macroeconomic statistics: for example, business activity in the manufacturing sector in July fell to 52.5 points from 54.6 points a month earlier, and this is the fastest rate of decline since February 2021. Also, today will be published June data on building permits issued, the number of which may decrease by 1.5% after May’s growth of 2.3%.
The US dollar is holding above 106 in the USD Index ahead of today’s publication of unemployment data: Initial Jobless Claims may slightly increase to 259.0K from 256.0K, and against the background of poor last week’s results, even such a slight increase will be perceived positively. Experts also note the negative forecasts regarding Friday’s report on employment in the non-agricultural sector, where it is possible to reduce the number of jobs to 250.0K from 372.0K a month earlier.
On the global chart of the asset, the price is moving within a wide ascending channel with dynamic boundaries of 1.26 – 1.32, trading in the middle of the range. Indicator Alligator’s EMA oscillation range began to narrow again, and the histogram of the AO oscillator forms ascending bars in the sell zone.
Resistance levels: 1.29, 1.3041 | Support levels: 1.2785, 1.2643
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XAGUSD - The price resumed growth after a two-month fall
The Caixin July Services PMI in China edged up 1 point to 55.5 points, while the S&P Global July Composite PMI in the US came in above expectations at 47.5 points at 47.7 points, according to the latest data. The indicator in the US services sector in the United States also exceeded the forecast of 47.0 points and amounted to 47.3 points, while the volume of industrial orders for June increased by 2.0% MoM, which is higher than the analysts’ forecast of 1.1%, and the previous indicator 1.8%. The economies of the two largest consumers of silver are showing optimistic data, which suggests an increase in demand for the precious metal, which is involved in various production chains.
However, the trading instrument is still in a long-term downtrend, and the level of 20.51, tested this week, is a strong resistance level: if market participants hold this level, then the decline is likely to continue with the target at 18.22, and if this level is broken, level up, the price will tend to test the trend line at 22.39.
Last week, the medium-term trend changed to an uptrend, and the quotes broke the target zone of 19.78–19.63. Now the growth target is zone 2 (21.28–21.13), and the key support is shifting to 19.00–18.85, upon reaching which investors will have the opportunity to consider new purchases of XAGUSD.
Resistance levels: 20.51, 22.39 | Support levels: 18.22, 17.10
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The shares of Starbucks, one of the largest companies in the world that owns the coffee chain of the same name, are trading around 87.
On the daily chart of the asset, the price has left the global downwards channel, breaking the resistance line at 76 and consolidating above the initial Fibonacci 23.6% correction at 81.6. On the four-hour chart, it is seen that the quotes have reached another key level — the basic correction of 38.2% Fibonacci around 88.30, consolidation above which will be the main signal for the continuation of the upward trend and reaching full correction of 61.8% Fibonacci at 99.50.
Technical indicators have reversed and are holding a buy signal.
Fast EMAs on the Alligator indicator are above the signal line and continue to move away from it, while the AO oscillator histogram is forming new rising bars in the buying zone.
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NZDUSD - New Zealand labor market statistics disappointed investors
The dynamics were largely due to a disappointing report on the labor market in New Zealand: the Q2 unemployment rate rose to 3.3% from 3.2%, although analysts had expected a decline to 3.1%, and the percentage change in employment from the previous quarter did not happen at all with forecasts of growth of 0.4%. According to statistics, the share of the economically active population decreased to 70.80%, while preliminary estimates of the figure were 71.00%. To the labor market, the commodity price index has also shown negative dynamics for the fourth month in a row: the value lost 2.2% after falling by 0.4% a month earlier, and in such conditions, we cannot speak of stable growth of the NZDUSD pair.
The trading instrument is moving within the global downtrend, correcting towards the local resistance. Technical indicators maintain a stable buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram forms rising bars in the buying zone.
Resistance levels: 0.6329, 0.6556 | Support levels: 0.6238, 0.6061
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AUDUSD - Bank of Australia downgrades GDP growth forecasts
The Reserve Bank of Australia (RBA) released a lengthy monetary policy report detailing the reasons for the adjustment of monetary policy parameters and the effectiveness of the current interest rate hike: last week, the rate reached 1.85%, and investors feared that a sharp tightening could push the country’s economy into recession, as in the United States. The regulator has downgraded its 2022 national gross domestic product (GDP) growth forecast to 3.25% from 4.25% expected three months ago, while the agency believes that high rates will begin to have a negative impact from 2023 when GDP could slow down to 1.75%. So far, a recession is not a likely scenario as the national labor market, with a record low unemployment of 3.5% at the lowest level in 48 years, contributes to a stable economy and investor interest in the Australian dollar.
The trading instrument is moving inside the Expanding formation pattern near the support line on the global chart. Technical indicators gave a stable buy signal: fast EMAs on the Alligator indicator are kept above the signal line, and the AO oscillator histogram is in the buy zone, although it is forming corrective bars.
Resistance levels: 0.7016, 0.7232 | Support levels: 0.6870, 0.6681
USDCHF - Technical analysis
H4
On the four-hour chart, there is the formation of a Three Black Crows candlestick analysis pattern, which means a continuation of the downtrend and emphasizes the unstable position of the “bulls”. At the moment, above the support level of 0.9396, a Bearish Engulfing Pattern has formed, which signals about increasing sales volumes. If the “bulls” fail to hold it, one should expect an increased downtrend up to the level of 0.9227. An alternative scenario is possible if buyers overcome the resistance level of 0.9496 with further recovery of positions in the zone of 0.9619–0.9728.
D1
The daily chart shows the formation of a Bear Flag price pattern, from which the price broke down. In addition, the negative trend is accompanied by the formation of a long red candle, the “bearish” Marubozu, which emphasizes the strength of sellers. In the current situation, the “bearish” trend is expected to continue and the price pattern to end at the level of 0.9227. The turning point for the “bulls” may be an impulse breakdown of the level of 0.9496.
Support levels: 0.9396, 0.9307, 0.9227 | Resistance levels: 0.9496, 0.9619, 0.9728
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The shares of Apple, an American technology company, are in a corrective trend at around 172.
On the daily chart, the price is within the global Expanding formation pattern, completing another up wave and approaching the resistance line at 174. On the four-hour chart, it is seen that the current wave is the fifth one and, therefore, the last of the obligatory ones, and within its framework, the upper border of the pattern may be broken, and the year’s high of 183 will be the local target for the upward movement.
The technical indicators confirm the high probability of continuation of positive dynamics: indicator Alligator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator forms rising bars in the buying zone.
EURJPY Technical Analysis
Despite the EURJPY pair’s trading within the bullish channel, the contradiction between the major indicators and the attempt to fluctuate below 136.60 level will postpone the bullish attack for now, to start suggesting the correctional negative trades that might target 135.50 and 134.40 levels. On the other hand, renewing the bullish attempts requires forming new bullish rally to manage to hold above 137.55 and open the way to target the positive stations near 138.60 and 139.70 levels.
The expected trading range for today is between 136.80 and 135.50
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BTC USD - short-term price correction possible
The main driver of positive dynamics was the July data on US inflation: a slowdown in its growth to 8.5% made many investors hope that the peak of consumer price growth in the country has passed, and the indicator will now begin to move towards the target level of 2.0%, which may force the US Federal Reserve to abandon a sharp rate hike of 75 or 100 percentage points at the next meetings. It, in turn, became a catalyst for the active decline of the dollar against its main competitors. Also, the transition of the Ethereum network to the Proof-of-Stake (PoS) proof algorithm, scheduled for mid-September, arouses the interest of traders in the entire cryptocurrency market and “digital gold” in particular.
The price has rolled back down and not consolidated above 25000. Judging by the reversal of Stochastic near the overbought zone, the decline may continue to the middle line of Bollinger bands around 23650, and in case the quotes consolidate below it and 23437.5, return to 21875. Otherwise, growth will resume towards 25000, 26562.5, and 28125.
Resistance levels: 25000, 26562.5, 28125 | Support levels: 23437.5, 21875, 20312
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NZDUSD - Inflation in New Zealand remains high
On Friday, Stats NZ published a report on food prices, which rose by 7.4% in July in annual terms. Among the key categories of price increases are: basic food products (+7.5%), restaurant meals (+6.6%), fruits and vegetables (+10.0%), meat and fish (+7.7%) and non-alcoholic drinks (+4.6%). On a monthly basis, the growth in food inflation amounted to 2.1%, and the fact that the negative dynamics is recorded taking into account lower energy prices indicates that the measures taken by the Reserve Bank of New Zealand (RBNZ) are not enough yet.
Quotes of NZDUSD continue to trade within the global downtrend, gradually approaching the resistance line.
Support levels: 0.6360, 0.6211 | Resistance levels: 0.6470, 0.6670
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GBPUSD - The UK economy is rapidly slowing down
The pound failed to continue active growth after the publication of poor macroeconomic data on Friday: the UK’s gross domestic product (GDP) in July fell by 0.6% compared to the previous month, although in June, it showed a positive trend of 0.4%. The indicator declined by 0.1% in the second quarter, slowing down the value to 2.9% YoY from 8.7% a quarter earlier. Also to GDP, a significant weakening was recorded in the leading sectors of the economy: the volume of industrial production fell by 0.9%, and the volume of production in the manufacturing industry decreased by 1.6%. However, this is the first quarter when GDP is negative, which means formally a recession in the UK economy is not yet.
The pair continues to trade within the global downward channel, coming close to the resistance line, indicator Alligator’s EMA oscillation range expands upwards, and the histogram of the AO oscillator forms rising bars in the buy zone.
Resistance levels: 1.2240, 1.2630 | Support levels: 1.2048, 1.1761
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