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Spreads
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Spreads
Spreads
Last week, the US dollar moved lower as the inflation data in the US in CPI and PPI are both reported to be lower than expected. This created a significant impact on some currencies and US Indices.
(All data taken from MT4 VT Markets)
Image source: forexfactory.com
This will be an action-packed week as there will be several key data releases from New Zealand, Australia, and Canada.
We will see New Zealand releasing its cash rate this week. Investors will also keenly anticipate the meeting minutes by the Reserve Bank of Australia and the US Federal Reserve.
The UK and Canada will release their CPI data, and Australia will release its employment data.
The US meeting minutes and the release of retail sales data will take place later in the week.
The Reserve Bank of Australia raised the cash rate by 50 bps to 1.85% early this month, the third consecutive hike since June 2022, bringing the cash rate to a level not seen since April 2016.
The central bank reaffirmed its commitment to doing what is necessary to ensure inflation returns to the target level while paying attention to the global outlook, which stays clouded by geopolitical tension in Ukraine, and its effect on energy, commodities prices, and China’s zero-COVID policy.
The Consumer Price Index in Canada increased 0.7% in June of 2022.
As one of the inflation indicators, the CPI data will also show how bad inflation is in that country. The higher the inflation rate, the higher the potential for the central bank to raise interest rates.
Analysts forecasted that Canada’s CPI for July would be slower at 0.1%.
The Reserve Bank of New Zealand raised its official cash rate by 50bps to a level we didn’t see since March 2016 of 2.5% during the July meeting.
The board warned that it would continue to tighten policy until it is sure monetary conditions are sufficient to cool inflation and bring it to the target range of 1-3%.
Policymakers said they were aware of medium-term downside risks to economic activity, as the global economic outlook had weakened amid ongoing supply issues, geopolitical tensions, and health curbs in China.
Analysts forecasted another 50-bps hike for this time.
The Consumer Price Index in the United Kingdom increased 0.8% in June of 2022 over the previous month.
As one of the inflation indicators, the CPI data will also show how bad inflation is in that country. The higher the inflation rate, the higher the potential for the central bank to raise interest rates.
Analysts forecasted that UK CPI for July would be slower at 0.4%.
Retail sales in the US jumped 1% month-on-month in June of 2022, beating forecasts of a 0.8% gain and recovering from a downwardly revised 0.1% drop in May. Figures showed consumer spending remains robust but also reflects a general increase in prices for goods and services.
Retail sales are expected to be higher by 0.2% in July.
The Federal Reserve raised the target range for the fed funds rate by 75bps to 2.25%-2.5% during its July 2022 meeting, the fourth consecutive rate hike since March 2022.
The central bank said that ongoing increases in the target range will be appropriate and that it is prepared to adjust the stance of monetary policy if risks emerge that could impede the attainment of the Committee’s goals.
Fed Chair Powell said he could not predict the monetary policy range for next year and that the following decisions would be data-dependent. He also said that the central bank would be looking for a moderately restrictive level by the end of the year, with an expected fed rate at a 3% to 3.5% level.
Employment in Australia jumped sharply from 88,400 to a fresh record high of 13.6 million in June 2022.
Meanwhile, Australia’s seasonally adjusted unemployment fell to a fresh record low of 3.5% in June 2022 from 3.9% in the prior three months, amid a further economic recovery from the pandemic. This month, the unemployment rate is forecasted at 3.6%, while employment is expected to increase by another 25,000.
Source: VT Markets MT4
Last week, The USD index (USDX) moved lower against some major currencies as the US CPI and PPI data are reported to be lower than expected. Price tried to break our support levels but could not do so as the price is rejected back above the support levels after touching it.
In the weekly timeframe, we can see that the Stochastic Indicators are moving lower, indicating that the potential USD index will move lower. Meanwhile, the 20, 50, and 200-candle Moving Averages are getting closer to the weekly price candles. This may indicate that there’s a lower interest from Buyers.
Our Weekly Resistance levels are 108.34 and 109.22, with the support levels at 105.56 and 104.69.
Meanwhile, in the H4 timeframe, we can see that Stochastic Indicators have reached overbought levels and started to reverse lower. Price moves back between Moving Averages and above 20-candle Moving Average and below 50 and 200-candle Moving Average showing that some consolidating might happen before the lower movement in the short term.
Our H4 Resistance levels are at 105.83 and 106.05, with the support levels at 105.39 and 105.04.
Source: VT Markets MT4
Last week, gold prices gained for the fourth consecutive week, reaching our Resistance levels. Potential movement this week is still between our Support and Resistance Levels, and are expected to try moving into our Resistance levels.
In the weekly timeframe, we can see that the Stochastic Indicators are showing a rising movement showing that Gold is moving higher. Gold prices rise above the 200-candle Moving Average and reach the 20-candle and 50-candle Moving Averages.
Our Weekly Resistance Levels are at $1,808 and $1,828, with the Support Levels at $1,752 and $1,734.
Meanwhile, in the H4 timeframe, we can see that the Stochastic Indicators show a strong higher movement and enter the overbought level, indicating that Gold might reach higher in the short term. The price now moves above the 20, 50 and 200-candle Moving Average.
Our H4 Resistance Levels at $1,803 and $1,807, with the Support Levels at $1,786 and $1,783.
Source: VT Markets MT4
Last week, US stocks enjoyed another strong week for markets. This week, we can see that NAS100 broke one of our previous resistance levels (13349).
In the weekly timeframe, we see that Stochastic Indicators are entering the overbought level. With the price able to move above the 20-candle Moving Average and reach the 50-candle Moving Average, we can expect that the higher movement is still limited with the potential of reversing lower.
Our Weekly Resistance Levels at 13895 and 14427, with the Support Levels at 12739 and 12427.
In our H4 timeframe, we can see that our Stochastic Indicators show a strong higher potential movement entering the overbought level, indicating that there’s a possibility that the price will move higher in the short term, moving back above the 20, 50, and 200-candle Moving Averages.
Our H4 Resistance Levels are at 13803 and 13985, while the Support Levels are at 13085 and 12981.
Source: VT Markets MT4
Last week, US stocks enjoyed another strong week for the markets. This week, we can see that DJ30 can break one of our previous resistance levels (33198).
In the weekly timeframe, we see that Stochastic Indicators are entering the overbought level. With the price able to move above the 20, 50, and 200-candle Moving Average, we can expect that the higher movement is still limited, with the potential of reversing lower after reaching our next Resistance levels.
Our Weekly Resistance Levels are at 33932 and 34184, with the Support Levels at 32246 and 31274.
In our H4 timeframe, we can see that our Stochastic Indicators show a higher movement and enter overbought levels. We can expect that DJ30 might go higher, with a potential reversal in the short term. The price is trying to move way above the 20, 50, and 200-candle Moving Average, which we can see possibly moving higher to our Resistance levels.
Our H4 Resistance Levels are at 34064 and 34264, while the Support Levels are at 33282 and 32782.
