Spreads
Spreads
Spreads
Spreads
Spreads
Last week, the market was relieved that NFP came close to forecast after the previous shock. The employment change exceeded 315,000. This decreased number was accompanied by increased unemployment and lower hourly wages. Despite negative statistics, the US$ only dipped briefly because the Fed was not concerned.
The Fed focuses on price stability, which falls under its inflation remit. They should raise rates despite the recent jobs report.
The USD index (USDX) showed another strong movement as the US$ neared a 2-decade high. USD index went down a little bit on Friday when US non-farm payroll data released was stronger than expected but lower than the previous month by 315,000 new jobs. The figure was considerably less than the supersized 526,000 jobs added in July but slightly above the estimated 300,000. The USD index can still close back higher, following Federal Reserve chair Jerome Powell’s speech at the Jackson Hole symposium in Wyoming last Friday. Powell said that rates would need to be high “for some time” to combat inflation.
(All data taken from MT4 VT Markets)
(Picture taken from forexfactory.com)
The US will release its ISM Services PMI this week, with the Reserve Bank of Australia and the European Central Bank also set to release their interest rates data.
Investors are also anticipating the release of GDP and Employment Condition data from Australia and Canada, respectively.
The Reserve Bank of Australia raised the cash rate by 50bps to 1.85% during its August 2022 meeting, the fourth consecutive hike since May, bringing the cash rate to a level not seen since April 2016. According to the board, the hikes over the recent months were necessary measures to curb inflation.
Some analysts predict that RBA will raise another 50bps for this month’s meeting.
The ISM Services PMI unexpectedly increased to 56.7 in July of 2022, the highest in 3-months, from 55.3 in June.
Analysts’ consensus forecasted that ISM Services PMI would be lower at 54.8.
The Australian economy advanced 0.8% QoQ in Q1 of 2022. This was the second quarter of expansion after a contraction in Q3 when economic activity was affected by the Covid-19 Delta variant outbreak.
For Q2 2022, we expect the Australian economy to remain resilient with a 1.3% growth.
The Bank of Canada (BoC) raised the target for its overnight rate by 1% to 2.5% on 13 July 2022, a move not seen since 1998. The big move surprised market-watchers who were expecting a 75bps hike. The BoC further signalled that it would continue to hike interest rates in the coming meeting to curb rising inflation.
The BoC will likely raise its overnight rate by 25 bps in September, taking its official cash rate to 2.75%.
The ECB raised its interest rates by 50bps during its July 2022 meeting, the first increase since 2011, an attempt to release the inflationary pressures. The move puts an end to its eighth straight year of negative rates.
Analysts expect that ECB will raise its interest rate by another 50bps in this meeting.
The Canadian economy lost more than 30,000 jobs in July 2022, extending the 43,000 cuts from the previous month. The unemployment rate in Canada remained at 4.9% in July of 2022, the lowest on record.
Analysts forecast another 20,000 additional jobs for August, with the unemployment rate to remain at 4.9%.
Last week, the USD index (USDX) showed another strong movement as the US$ neared the 2-decade high. The USD index went down a bit on Friday when US non-farm payroll data released was stronger than expected but lower than the previous. The USD index can close back higher after the market still, following Federal Reserve chair Jerome Powell’s speech at the Jackson Hole symposium in Wyoming last Friday, saying that rates would need to be high to fight inflation.
In the weekly timeframe, we can see that Stochastic Indicators are increasing, entering the overbought level. This indicates that the power movement is still on the upside. Meanwhile, the prices are moving above the 20-, 50-, and 200-candle Moving Averages, indicating that higher movements are continuing.
Our Weekly Resistance levels at 109.75 and 110.63, with the Support Levels at 108.03 and 104.86.
Meanwhile, in the H4 timeframe, we can see that Stochastic Indicators just crossed up. The prices move above the 20-, 50-, and 200-candle Moving Averages, showing that higher movement continues for some time.
Our H4 Resistance Levels are at 109.75, with the Support Levels at 108.21 and 107.52.
Last week, gold prices moved lower, affected by the stronger US$, reaching a lower level at $1,688.
In the weekly timeframe, we can see that the Stochastic Indicators show a lower movement, indicating that Gold is moving lower. Gold prices moved back above after being rejected by the 200-candle Moving Averages. However, they are still below the 20- and 50-candle Moving Averages, which means that the prices move in consolidation yet much lower. There is potential to reach our support levels if prices are able to break lower than the 200-candle Moving Average.
Our Weekly Resistance levels at $1,752, and $1,801 with the support levels at $1,697, and $1,676.
In the H4 timeframe, we can see that the Stochastic Indicators inside were at the overbought level at the closing hour on Friday after showing a lower movement. The prices are below the 20-, 50-, and 200-candle Moving Average, which indicates that the prices will still move lower.
Our H4 Resistance levels at $1,723 and $1,744, with the support levels at $1,688 and $1,681.
Last week, the US stocks fell after the market worried about the inflation condition and the potential for another rate hike from the fed.
In the weekly timeframe, we can see that the Stochastic Indicators are dropping. With the prices moving below the 20- and 50-candle Moving Average, we can still expect the lower movement to reach our support level at 11849.
Our Weekly Resistance Levels are at 12958 and 13583, with the Support Levels at 11849 and 11286.
Our H4 timeframe shows that our Stochastic Indicators move lower after entering an overbought level. More downward movements are still expected. The prices are moving below the 20-, 50-, and 200-candles Moving Averages.
Our H4 Resistance Levels are at 12551 and 12909, while the Support Levels are at 11864 and 11484.
Last week, US stocks fell after the market worried about the inflation condition and the potential of another hike rate from the fed.
We can see the Stochastic Indicators moving lower from the overbought level in the weekly timeframe. With the prices moving back below the 20, 50-candle Moving Averages and above the 200-candle Moving Averages, we can expect that the prices have the potential to move lower.
Our Weekly Resistance Levels are at 32226 and 32861, with the Support Levels at 31274 and 30619.
In our H4 timeframe, we can see that our Stochastic Indicators are moving inside the oversold level while the prices are moving below the 20-, 50-, and 200-candle Moving Averages. We can expect that the DJ30 might go higher in the short term before going back lower in the longer term.
Our H4 Resistance Levels are at 32459 and 33086, while the Support Levels are at 31089 and 30599.
