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Last week, the market movement was affected mainly by the FOMC Meeting, as the US Fed raised the interest rate by 75bps but plans slow it down in the future.
(All data taken from MT4 VT Markets)
(Picture taken from forexfactory.com)
In the first week of August, numerous countries will release important data. The Non-Farm Employment Change will be the primary focus in the US. The Bank of England and Reserve Bank of Australia will make rate decisions for their respective countries.
Employment figures from the United States, New Zealand, and Canada will also be released as well as the Manufacturing and Services PMI data from the US.
ISM Manufacturing PMI – US | Monday, 01 August 2022
The ISM Manufacturing PMI fell to 53 in June of 2022 from 56.1 in May, indicating the slowest growth in factory activity since June 2020.
Business sentiment remained optimistic regarding demand, but firms continue to note supply chain and pricing issues as their biggest concerns.
Analysts are forecasting that ISM Manufacturing PMI will be released at 52.9.
RBA Rate Statement – Australia | Tuesday, 02 August 2022
The Reserve Bank of Australia raised the cash rate by 50 bps to 1.35% during its July 2022 meeting. The move followed June’s 50-bps hike and a 25-bps increase in May, bringing the cash rate to a level not seen since May 2019.
The board said massive monetary support was no longer needed given the economy’s strength and price pressures. The board is committed to tightening the amount and timing guided by incoming data.
Some analysts dropped their forecast to 50bps (vs 75bps) after headline inflation came in slightly slower than expected.
Employment – New Zealand | Wednesday, 03 August 2022
New Zealand’s unemployment rate remained unchanged at an all-time low of 3.2% in the first quarter of 2022. The number of employed people remained steady over the quarter, rising by 2,000 to 2,826,000.
The underutilisation rate was 9.3%, up slightly from 9.2%, primarily from growth in available potential job seekers – those who want and are open to work but not currently looking.
For the 2nd Quarter of 2022, the Unemployment Rate is forecasted at 3.1%, with Employment predicted to rise by 0.3%
ISM Services PMI – US | Wednesday, 03 August 2022
The ISM Services PMI edged lower to 55.3 in June of 2022 from 55.9 in May but continued solid growth for the services sector by beating the market forecast of 54.3.
The forecast remains hard as “logistical challenges, a limited labour pool, material shortages, inflation, the coronavirus pandemic, and the crisis in Ukraine continue to negatively influence the services industry,” according to Anthony Nieves, Chair of the ISM Services Business Survey Committee.
Bank of England Official Bank Rate and Monetary Policy – UK | Thursday, 04 August 2022
The Bank of England raised its primary bank rate by 25bps to 1.25% in June 2022, the fifth consecutive rate hike and the largest in 13 years to contain inflation. Three policymakers voted for a 50bps hike, and the central bank committed to reduce inflation to 2% and ‘act decisively’ if needed.
The central bank expects inflation to be above 9% in the coming months and above 11% in October, while GDP growth will dip in the first half of the forecast year. This will lead to another 25bps BoE hike in August.
Employment Data – Canada | Friday, 05 August 2022
June’s data is a mixed result. The economy lost 43,200 jobs, reversing May’s 40,000 gain, and the unemployment rate fell to 4.9% in May 2022.
It was the lowest unemployment rate since 1976, yet some businesses struggle to fill job vacancies. One of the main reasons for this is that the COVID-19 pandemic has changed the work environment, making people more “picky” about the jobs they apply for.
For July, we expected Canada to add around 15,000 jobs from the previous loss, and the unemployment rate would remain at 4.9%.
Labour Data – US | Friday, 05 August 2022
The American economy added 372,000 payrolls in June of 2022, much better than market forecasts of 268,000 and slightly below a downwardly revised 384,000 in May. We can expect some easing results for July, projected at 255,000.
Meanwhile, the US unemployment rate was unchanged at 3.6% in June of 2022, the same as in the previous three months, making it the lowest since February 2020.
Unemployment figures are projected to remain at 3.6%.
The USD index (USDX) declined last week following the US Fed’s decision to raise the interest rate by 75bps but plans to slow down in the future. This week we will see if our Support levels are strong enough to hold USD Index as Non-Farm Employment Change will be released in the US.
In the Weekly Timeframe, we can see that Stochastic Indicators have reversed lower, leaving overbought levels, showing that there’s a possibility that USD Index will move lower.
Meanwhile, the 20, 50, and 200-candle Moving Averages are getting closer to the weekly price candles. The movement may indicate that there’s a lower interest from buyers.
Our Weekly Resistance levels are at 108.34 and 109.22, with Support Levels at 105.56 and 104.69.
Meanwhile, in the H4 Timeframe, we can see that the Stochastic Indicators are at a neutral level but showing a lower movement. The price breaks to move below the 200-candle Moving Average and still below the 20- and 50-candle Moving Averages, which means there’s strong potential for the price to move lower.
Our H4 Resistance levels are at 106.18 and 107.49, with Support Levels at 105.20.
Last week, gold prices are rejected from our support levels at $1675-$1687, which is similar to the 200-candle Moving Average and bounced back near our Weekly Resistance. There is a potential movement this week after Friday’s release of the Non-Farm Employment change data.
In the Weekly Timeframe, we can see that the Stochastic Indicators are at an oversold level and have started to move higher. Gold prices move above the 200-candle Moving Average and below the 20- and 50-candle Moving Averages.
Our Weekly Resistance levels are at $1781 and $1829, with Support Levels at $1729 and $1687, $1675.
Meanwhile, in the H4 Timeframe, we can see that the Stochastic Indicators show a lower movement, indicating that Gold might go down a little bit in the short term.
Price now is moving above 20- and 50-candles Moving Average and breaking and opening above the 200-candle Moving Average.
Our H4 Resistance levels are at $1786 and $1803, with the support levels at $1723 and $1714.
US Stocks enjoyed a strong week for markets after the Fed mentioned that there’s a possibility that the future interest rate decision will be slower.
For this week, we can expect some positive continuation movement from NAS100. As we can see in the Weekly Timeframe, our Stochastic Indicators still show a higher movement. However, keep in mind that Stochastic Indicators are entering the overbought level. The price has been rejected for some weeks by the 200-candle Moving Average while still below the 20- and 50-candle Moving Averages, showing a limited higher movement.
Our Weekly Resistance levels are at 12896 and 13349, with the Support Levels at 11505 and 11255.
In our H4 Timeframe, we can see that our Stochastic Indicators are showing a lower movement from an overbought level, which indicates that there’s a possibility that the price will move lower in the short term, with price moving above the 20, 50 and 200-candle Moving Averages.
Our H4 Resistance levels are at 12979 and 13147, while the Support Levels are at 12712 and 12560.
US Stocks enjoyed a strong week for markets after the Fed mentioned that there’s a possibility that the future interest rate decision will be slower.
For this week, we can expect some higher movement in DJ30. As we can see in the Weekly Timeframe, our Stochastic Indicator shows a higher movement and has been rejected for a few weeks by the 200-candle Moving Average, below the 50-candle Moving Average, but able to break above the 20-candle Moving Average.
Our Weekly Resistance levels are at 33198 and 33932, with the Support Levels at 32246 and 31274.
In our H4 Timeframe, we can see that our stochastic indicators show a higher movement inside the overbought levels. We can expect that the DJ30 may go higher, with the potential reversal in the short term. Price is trying to reach and break above the 200-candle Moving Average and is supported by the 20- and 50-candle Moving Averages. We can see a possible moving higher to Resistance and back lower.
Our H4 Resistance levels are at 33315 and 34064, while the Support Levels are at 32519 and 31627.
