InvestMacro

by JustForex

Jerome Powell’s speech became the main event of the last week following the annual Symposium in Jackson Hole. Mr. Powell said that as long as the labor market remains substantially sluggish and the pandemic continues, tightening the monetary policy could be a premature mistake. In other words, the soft monetary policy remains the same. The Fed Chairman also added that the spread of the Delta strain poses a short-term risk to economic growth and said that the Fed remains optimistic about economic recovery. Nothing was said about the timing of the end of the QE program. Discussions are still ongoing, and this issue will depend on economic and health care risks. However, Powell noted that if inflation remains high, the Fed will undoubtedly take action to reduce price pressures. After it became known that the QE program was not planned to be cut in the nearest future, the main US stock indexes sharply jumped and closed the day at the maximums. At the close of the trading session, the Dow Jones increased by 0.69%, the S&P 500 index increased by 0.88%, and the NASDAQ index jumped by 1.23%. The rally continues.

On the other hand, the market indicator of billionaire investor Warren Buffett, who compares the stock market valuation with the size of the US economy, reached 205%, which indicates a huge overvaluation of stocks. This indicator has accurately predicted the impending collapse several times. It reached a record high during the dot-com bubble and was also high before the 2008 global financial crisis. And both times it remained below 150%.

During the testing of the distance on one charge, Lucid Air’s first electric car traveled 445 miles and outperformed its Tesla Model S competitor (405 miles). At the same time, Lucid Air representatives said its Air Dream model can reach 517 miles on a single charge. But the cost of the car from Lucid Air is a little bit higher – $169,000. It looks like Tesla has a serious competitor.

European stock indices finished last week in the green zone. At the end of the week, British FTSE 100 added 0.8%, German DAX added 0.2%, French CAC 40 increased by 0.2%, Italian FTSE MIB increased by 0.2%, and Spanish IBEX remained the same. The consumer confidence index in France decreased by 1 point in August compared to the previous month. Germany’s import prices jumped by 15% in July compared to the same month last year and 2.2% in the previous month. European inflation data is expected this week.

Oil prices fell and rebounded from a 3-week high amid a powerful hurricane in the Mexican bay. Gasoline prices in the US increased by more than 3% as a power outage shut down the Persian Gulf Coast refineries. Analytical firms still expect oil prices to rise by the end of the year.

Gold and silver prices jumped on Friday as the Federal Reserve maintained its soft monetary policy. Until the Federal Reserve announces cutting its QE program, precious metal prices tend to rise.

The broadest index of Asia-Pacific shares outside of Japan, MSCI, jumped to a two-week high on Friday, Japan’s Nikkei 225 added 0.46%, Australia’s ASX200 added 0.2%, Korea’s KOSPI increased by 0.25%, but China’s blue-chip index CSI300 lost 0.26%. Japan is exploring the possibility of mixing AstraZeneca’s COVID-19 vaccine with vaccines developed by other drugmakers in an effort to speed up vaccine introduction. Japan is struggling with the worst wave of infections caused by the Delta version, and for the first time this month, the number of new daily infections exceeded 25,000. In Japan, 54% of the population is vaccinated with at least one dose, and 43% are fully vaccinated. Japanese prime ministerial candidate Fumio Kishida is calling for a huge stimulus package in the amount of several tens of trillions of yen to maintain the pace of economic recovery.

Main market quotes:

S&P 500 (F) 4,509.37 +39.37 (+0.88%)

Dow Jones 35,455.80 +242.68 (+0.69%)

DAX 15,851.75 +58.13 (+0.37%)

FTSE 100 7,148.01 +23.03 (+0.32%)

USD Index 92.68 -0.38 (-0.41%)

• – German Consumer Price Index (m/m) at 15:00 (GMT+3);
• – Pending Home Sales (m/m) at 17:00 (GMT+3).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By Admiral Markets

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By Admiral Markets

By Orbex

Monday could be pretty interesting for European markets, and there is a chance of a strong move in the early European session.

Part of that has to do with the lingering effects of what might come out of the Jackson Hole Symposium, and another is a plethora of different data points coming out throughout the session.

Fed Chairman Jerome Powell will speak before the close of today’s European session. Therefore it’s possible that the “tone” of the Jackson Hole meeting won’t be clear until after the close. And the markets might take some time to digest the implications of any change in policy outlook.

So, we might want to keep an eye on the markets at the start of the session to see if there is any additional reaction to the monetary policy outlook.

The data points

In terms of data that could potentially move the markets on Monday, we start with retail sales from Spain.

We have to remember that Spain was one of the most affected by covid. Nonetheless, it has an increase in demand in summer usually because of higher tourism.

So, better results from Spain might be a reflection of continental improvement in outlook. The periphery is often a bellwether for economic sentiment in the eurozone.

Analysts expect Spanish retail sales to rise by 0.5% in July, compared to 0.2% in June. This would push the annual rate to 3.8% from 1.4%.

Should they meet expectations it would confirm an end to the “normalization” of retail sales. In turn, this would suggest that consumers are returning to a more positive outlook.

Coming off the mountain

Next up is the Swiss KOF leading indicator, measuring the relative optimism of major Swiss business leaders.

Since May, optimism has been tracking lower and economists anticipate it will continue in that trend. As Swiss economic activity normalizes, the positive outlook associated with the recovery would naturally dissipate. That said, the KOF leading indicator is forecast at 120, down from 129.8 in the last reading.

The eurozone consumer confidence comes out after that. And the prediction for that data is to slip further into negative territory.

The rise in delta variants and the refusal of authorities to rule out another round of lockdowns have been impacting consumer outlook. Though it appears consumers are still spending, they aren’t confident about the future.

At some point, retail sales could drop, and pull down inflation. Analysts project the eurozone consumer confidence for August to come in at -5.3, from -4.4 in July.

Rounding things up

Spanish business confidence is next, which economists expect to drop to 1.5 from 1.9 in the previous reading.

If we factor in consumer spending reports from earlier in the day, the suggestion is that Spanish business leaders believe the increase in sales to be transitory. The longer-term impact, should those fears be true, implies less inflation for the euro going through winter.

Speaking of inflation, the final data point is German August flash CPI, which will probably tick slightly higher to 3.9% from 3.8%. Germany has one of the highest inflation rates in the shared economy, buoyed by a stronger recovery.

Overall, we’ll have to wait and see how the European data releases could impact the markets.

By Orbex

By Orbex

USDJPY about to test resistance

The Japanese yen weakened after a lower-than-expected Tokyo CPI in August. The US dollar is grinding its way back up after the mid-month correction.

A double test at 109.50 suggests strong buying interest. Layers of support indicate buyers’ willingness to pay up, the freshest one is at 109.90.

Momentum has slowed down as the price approaches the major supply area around 110.40. A bullish breakout would tip the balance to the long side again and open up the path to the psychological price tag of 111.00.

AUDUSD rebound cools off

The Australian dollar fell back after a drop in July’s retail sales numbers.

A close above 0.7270 has forced sellers to cover their bets. The pair is recovering towards the 30-day moving average on the daily chart which coincides with the support-turned-resistance at 0.7320.

However, the rebound is likely to be choppy. After a double top in the overbought area, the RSI’s divergence indicates a loss in the rebound momentum.

A drop below 0.7235 would lead to a deeper correction to 0.7150.

US 30 recoups previous losses

The Dow Jones index pulls back as traders await updates from the Fed’s Jackson Hole meeting.

Price action’s V-shaped rebound is typical of buying-the-dips from the demand zone near 34600. By lifting offers around 35450 the bulls have signaled their commitment to maintaining the uptrend in the medium-term.

The index is seeking support after it erased losses from last week. 35200 is the first support as the RSI dips into the oversold territory.

A break above the peak at 35600 would extend the rally to new all-time highs.

By Orbex

Article By RoboForex.com

AUDUSD, “Australian Dollar vs US Dollar”

In the daily chart, the downtrend is looking quite stable despite the current correction to the upside, which started after an attempt to test 38.2% at 0.7052. After the pullback is over, the asset may continue trading towards 50.0% and 61.8% fibo at 0.6758 and 0.6464 respectively. The key resistance is the high at 0.8007.

The H4 chart of AUDUSD shows the potential upside correctional targets are convergence on MACD – 23,6%, 38.2%, and 50.0% at 0.7292, 0.7406, and 0.7498 respectively. A breakout of the local support at 0.7106 will lead to a further mid-term downtrend.

USDCAD, “US Dollar vs Canadian Dollar”

As we can see in the daily chart, after an attempt to reach 38.2% fibo at 1.3022 and local divergence on MACD, the pair is correcting downwards. After finishing the pullback, the asset may form a new wave to the upside with the targets at 50.0% and 61.8% fibo at 1.3336 and 1.3650 respectively. The key support remains at the low at 1.2007.

The H4 chart shows the potential targets of the current descending correction. After divergence on MACD, the pair was falling and reached 38.2% but then rebounded from it. The next descending impulse may head towards 50.0%, 61.8%, and 76.0% fibo at 1.2478, 1.2366, and 1.2234 respectively. The local resistance is the fractal high at 1.2949.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

EURUSD is trading at 1.1761; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 1.1730 and then resume moving upwards to reach 1.1875. Another signal in favor of a further uptrend will be a rebound from the descending channel’s upside border. However, the bullish scenario may be cancelled if the price breaks the cloud’s downside border and fixes below 1.1675. In this case, the pair may continue falling towards 1.1585.

GBPAUD, “Great Britain Pound vs Australian Dollar”

GBPAUD is trading at 1.8897; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.8925 and then resume moving downwards to reach 1.8745. Another signal in favor of a further downtrend will be a rebound from the upside border of a Triangle pattern. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.9105. In this case, the pair may continue growing towards 1.9205. To confirm further decline, the asset must break the pattern’s downside border and fix below 1.8875.

AUDCAD, “Australian Dollar vs Canadian Dollar”

AUDCAD is trading at 0.9186; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test the cloud’s upside border at 0.9165 and then resume moving upwards to reach 0.9275. Another signal in favor of a further uptrend will be a rebound from the descending trendline. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 0.9125. In this case, the pair may continue falling towards 0.9095. To confirm further growth, the asset must break the resistance level and fix above 0.9230, thus completing the formation of a Double Bottom reversal pattern.

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

by JustForex

The number of initial jobless claims in the US slightly increased to 353,000 from 349,000 last week. But these figures are still at pre-crisis levels, indicating a stable labor market situation. US GDP year-on-year increased to 6.6% (previous 6.5%), although this is below economists’ expectations of 6.7%. The head of the Fed, Jerome Powell, will give a speech today following the symposium in Jackson Hole. This verbal intervention may increase the volatility in the financial markets. If nothing will be mentioned about the reduction of the QE program or if Mr. Powell will indicate that it is too early to speak about it and better labor market numbers are needed, the dollar index will rally down, and stock indices will jump. And vice versa, if Mr. Powell says that the QE program reduction is scheduled to start this year, in this case, the dollar index will jump sharply, while the stock indices will go down. Analysts believe that the central bank will seek to begin reducing monthly bond purchases this year to avoid having to catch up with the market later and risk more aggressive steps to curb inflation.

Investors were cautious in the stock markets yesterday, with some investors starting to trim their portfolios, which caused a short-term decline in indices. As a result, the S&P 500 decreased by 0.58%, the Dow Jones lost 0.54%, and the Nasdaq fell by 0.6%.

Thursday’s US military losses were the first in Afghanistan since February 2020 and represented the deadliest day for US troops in a decade. Some critics blamed Joe Biden for the hasty evacuation that threatened the lives of Americans in Afghanistan providing security at the Kabul airport.

Ahead of Mr. Powell’s speech, European stock indexes also decreased yesterday. The Stoxx Europe 600 composite index of the region’s largest companies lost 0.32%. The British FTSE 100 index decreased by 0.35%, German DAX lost 0.16%, French CAC 40 fell by 0.42%. Spanish IBEX 35 and Italian FTSE MIB fell by 0.94% and 0.76%, respectively. Deutsche Bank shares decreased by 2.3% on news of an inspection of the bank’s unit by the US Securities and Exchange Commission (SEC) on information that the bank exaggerated its use of ESG criteria in investing. The EU is considering reintroducing restrictions for US tourists visiting European countries. On the back of this news, stocks of European tourist companies fell yesterday.

Oil rising in price and finishing the week with a steady increase. The Chinese authorities were able to contain the wave of delta strain, and analysts at Goldman Sachs and UBS still expect oil prices to rise until the end of 2021, as the supply on the market will be insufficient.

Gold added 0.15% yesterday, hitting $1,793.60 per troy ounce. Gold and silver price dynamics are highly dependent on the dynamics of the dollar index and US Treasury bond yields. If the Fed keeps its soft monetary policy, gold prices will continue to rise. On the contrary, if the Fed announces cuts to its QE program this year, gold could see large sales.

Retail sales in Australia fell in July due to the spread of the delta strain. The New Zealand dollar slightly decreased after the country’s prime minister announced a quarantine in Auckland, the country’s largest city, which is likely to remain in place for another two weeks.

Main market quotes:

S&P 500 (F) 4,470.00 -26.19 (-0.58%)

Dow Jones 35,213.12 -192.38 (-0.54%)

DAX 15,793.62 -67.04 (-0.42%)

FTSE 100 7,124.98 -25.14 (-0.35%)

USD Index 93.05 +0.22 (+0.24%)

• – Jackson Hole Symposium (Day 2);
• – Australia Retail Sales (m/m) at 04:30 (GMT+3);
• – US PCE price index (m/m) at 15:30 (GMT+3);
• – US Fed Chair Jerome Powell’s speech at 17:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

by JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.1771
• Prev Close: 1.1754
• % chg. over the last day: -0.14%

According to the ECB monetary policy meeting minutes, some supporters of the European Central Bank’s Governing Council disagree with its new guidance on the future course of the policy. They fear it is underestimating the risk of rising inflation. Policymakers are concerned that the new formulation implies constant exceeding the limit and the “promise to maintain interest rates at the current or lower level for a very long period of time without explicit reservation.”

Trading recommendations

• Support levels: 1.1759, 1.1704, 1.1620
• Resistance levels: 1.1799, 1.1817, 1.1854, 1.1894, 1.1934, 1.1969

From a technical point of view, the general trend of the EUR/USD currency pair is bearish. But the price is trading above the moving average, and the local trend is upward now. The MACD indicator started signaling a divergence in the opposite direction. Under such market conditions, it is best to look for sell trades from the resistance levels, where sellers showed the initiative. Buy trades can only be considered intraday from the support levels where the buyers have shown the initiative. It is better to buy from the false breakdown zone around the 1.1703 level.

Alternative scenario: if the price breaks out through the 1.1817 resistance level and fixes above, the mid-term uptrend will likely resume.

News feed for 2021.08.27:

• – Jackson Hole Symposium (Day 2);
• – US PCE price index (m/m) at 15:30 (GMT+3);
• – US Fed Chair Jerome Powell’s speech at 17:00 (GMT+3);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.3760
• Prev Close: 1.3698
• % chg. over the last day: -0.45%

The British pound slightly lost its position. The price decreased by 0.45% yesterday. A lot will depend on what Jerome Powell will say in his speech today. If nothing will be mentioned about the reduction of the QE program or if Mr. Powell will indicate that it is too early to speak about it, the dollar index will rally down, which will play in favor of the growth of the quotes against the dollar, including the pound.

Trading recommendations

• Support levels: 1.3692, 1.3632, 1.3614, 1.3525
• Resistance levels: 1.3741, 1.3793, 1.3772, 1.3886, 1.3935, 1.4002

On the hourly time frame, the GBP/USD trend is bearish. The price has consolidated above the support level and formed a false breakdown zone below. But now, the price fell below the moving average again, and the MACD indicator has become negative. Under such market conditions, it is better to look for sell trades from the resistance level, where sellers have shown initiative. Buy positions can be considered only within the day and only with short targets.

Alternative scenario: if the price breaks out through the 1.3885 resistance level and consolidates above, the bullish scenario will likely resume.

News feed for 2021.08.27:

• – US Fed Chair Jerome Powell’s speech at 17:00 (GMT+3).

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 109.95
• Prev Close: 110.02
• % chg. over the last day: +0.06%

Japan continues to struggle with the delta strain. The fundamental picture is not in favor of JPY strengthening, but the Japanese currency is also highly dependent on the dollar index. That’s why if the USD goes down today after Mr. Powell’s speech, the USD/JPY will also go down and vice versa.

Trading recommendations

• Support levels: 109.43, 109.19, 108.65
• Resistance levels: 110.11, 110.34, 110.66, 110.95, 111.48

The main trend of the USD/JPY currency pair is bullish. The fall of the dollar index compensated for the negative impacts of the news. As a result, the USD/JPY currency pair is trading flat. The MACD indicator is inactive. Under such market conditions, traders should look for buy trades from the support level, where the buyers have shown initiative. Sell positions should be considered only on lower time frames from the resistance levels and only with short targets.

Alternative scenario: if the price falls below 109.18, the uptrend is likely to be broken.

News feed for 2021.08.27:

• – US Fed Chair Jerome Powell’s speech at 17:00 (GMT+3).

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.2588
• Prev Close: 1.2685
• % chg. over the last day: +0.77%

The Canadian dollar is a commodity currency, so the USD/CAD currency pair is highly dependent on the dynamics of the dollar index and oil prices. Yesterday the dollar index slightly increased, while oil prices remained at the same level. As a result, the USD/CAD currency pair broke out of the trading range upwards.

Trading recommendations

• Support levels: 1.2656, 1.2602, 1.2554
• Resistance levels: 1.2713, 1.2812, 1.2891, 1.2951

In terms of technical analysis, the USD/CAD trend is still bullish. The priority change level has survived this time. The MACD indicator has become positive, and the divergence worked as it should be. It is better to look for buy positions from the priority change level, where the buyers have shown initiative. Sell positions can be considered from the resistance levels, but only within the day and with short targets.

Alternative scenario: if the price breaks down through the 1.2602 support level and fixes below, the uptrend will likely be broken.

News feed for 2021.08.27:

• – US Fed Chair Jerome Powell’s speech at 17:00 (GMT+3).

by JustForex

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Financial markets participants were caught by surprise when the July US retail sales figures were released, and analysts started to question whether the economic recovery can continue at the same solid pace. The combination of waning fiscal support and rising COVID-19 cases seem to be having an impact on consumer behavior, as the numbers suggest.

The major stock market indices in the USA are trading near record levels and the US Dollar has been rising on the back of taper expectations by the FED, which creates an environment where asset prices are vulnerable to setbacks especially if the overly optimistic economic expectations aren’t met in the months ahead.

Source: Photo by Sean Pollock on Unsplash

Consumer demand in the US cools down

According to the Wall Street Journal, US retail sales fell 1.1% MoM, on the back of weakening demand for autos, clothing, sporting goods and furniture. Spending accounts for two thirds of the economy and any data miss can have a negative impact on asset valuations, as has happened once these figures were released.

In such cases, online traders need to adapt quickly and make sure their broker is well-suited to provide competitive conditions, including accurate execution, tight costs, and optimized software. One of the brands that have been gaining momentum recently is Axia, a regulated brokerage specialized in CFD trading.

Source: Photo by Adeolu Eletu on Unsplash

Traders are pleased to see Axia covers different markets for diversity, including currency pairs, stocks, indices, commodities, and other CFDs. That means its customers can build a portfolio or spot some of the most active assets each day, which is where trades with a high probability of success can occur.

Could online trading behavior change?

A lot of attention is being given to US stocks and the Dollar, especially recently when major indices retraced from record levels on the back of rising worries related to the pandemic. Since the market has been pointing up for more than a year without any major pullback, a maturing trend and weakening underlying fundamentals are not favorable factors moving forward.

When working with a broker like Axia, traders can either buy or sell-short on any of the instruments covered, able to take advantage of both bullish and bearish conditions. It allows for margin trading via tailored platforms like AxiaTrader and AxiaTrader Mobile, two solutions developed in-house by the company.

Uncertainty equals higher diversification needs

The path ahead for global stock markets is uncertain. Emerging markets indices have already peaked and only developed ones are managing to hold their ground decently. In an interconnected global economy, negative ripple effects can occur and catch overly-confident traders with an upside bias off-guard.

Axia encourages traders to constantly educate themselves and make informed decisions since that has a major impact on their personal finances. US retail sales figures show that the economic recovery could encounter significant bumps along the way and financial markets might start to price in that as well. Interest rates are expected to remain low for an extended period, which puts a bid under equities, but that does not exclude corrective moves down the road.

By Taylor Wilman