Weekly plan - 04/08 - 04/12/2024

Macro

Next week sees the release of US consumer and manufacturing inflation data, consumer sentiment. ECB refinancing rate meeting and 30-year US government bond auction will be held.

We advise to pay attention to events that cause uncertainty in price movement:

Wednesday - Core CPI m/m, FOMC Meeting Minutes.

Thursday - Main Refinancing Rate, Monetary Policy Statement, Core PPI m/m, ECB Press Conference.

Wednesday

USD (US Dollar) / Core CPI m/m - 15:30

Important data with a serious impact on the volatility of price movement!

Change in the Core CPI for the month.

TheUS Federal Bureau of Statistics releases the Core CPI every month, about 16 days after the end of the previous month. The calculation is based on the prices of consumer goods, excluding energy and food (Core).

It is considered that energy and food prices are very volatile and take up only 1/4 of the whole index. For this reason, economists use the Core index for more accurate measurement.

Consumer prices account for most of the inflation, as people are the main buyers of goods. This is a very important macroeconomic parameter and indicator, which is the last in the chain of inflation and shows the real situation in the economy.

Inflation is dangerous because money is constantly depreciating. This causes very big economic and social problems, which, with uncontrolled growth, can even lead to civil conflicts and wars. This has already happened in history. That is why the government is watching this parameter very closely and doing everything possible to influence the price growth.

At the moment, the Fed is making every effort to curb the growth of inflation. The main tool is the increase in refinancing rates. The higher the rate, the higher the borrowing and lending. Expensive loans and borrowing - people can't buy new goods, houses, cars. Lack of large demand for goods - manufacturers make fewer orders, do not increase production capacity and thus do not increase prices at their level.

The latest actual rate (0.4%) was higher than the forecast (0.3%).

The current market forecast is 0.3%.

You can read more here.

USD (US Dollar) / CPI m/m - 15:30

Monthly change in the Consumer Price Index.

TheUS Federal Bureau of Statistics releases the Consumer Price Index every month, about 16 days after the end of the previous month. The calculation is based on the prices of consumer goods, including energy and food prices.

Since the index includes energy and food prices, it is more realistic and closer to ordinary people. The dependence of prices on energy costs has been described above.

In the USA, the infrastructure of cities is built in such a way that it is very difficult to get around without a car. The public transportation system there is not as well developed as in European cities. For this reason, the cost of fuel used to refuel their cars is very important for ordinary citizens. The same can be said about nutrition.

When all of this is taken into account, as with the example of comparing Core PPI and PPI, a very large volatility in performance is created. If you look at it from an academic point of view, it is superfluous information that doesn't play a role and it is smoothed out. If you look at it from a consumer point of view, this extra information is everything. Today you fill up a liter of gasoline for 55 hryvnias, tomorrow for 70, the day after tomorrow for 90, and in a week for 60. Not a very calm situation for an ordinary person.

The last actual indicator (0.4%) turned out to be equal to the forecasted one (0.4%).

The current market forecast is 0.3%.

You can read more here.

USD (US Dollar) / CPI y/y - 15:30

Year-over-year change in the Consumer Price Index.

TheUS Federal Bureau of Statistics releases the Consumer Price Index every month, about 16 days after the end of the previous month. Consumer prices are calculated based on the prices of consumer goods, including energy and food prices.

The index is annualized. It is widely used in the media, as it is easier to explain for ordinary people. A large number of instruments related to social security and insurance are calculated on the basis of this index.

The last actual index (3.2%) was higher than the forecast (3.1%).

The current market forecast is 3.4%.

You can read more here.

USD (US Dollar) / FOMC Meeting Minutes - 21:00

Important data with a serious impact on the price movement volatility!

Publication of FOMC Meeting Minutes (FOMC Minutes).

Detailed report on the FOMC meeting. The meetings are held 8 times a year, they consider economic and financial conditions in the country, determine the monetary policy and decide on interest rates.

The event is important because it details the decisions of the commission on the latest change in the refinancing rate. It is possible to find out who voted in favor of a certain decision and who was against it. In the future, it is possible to observe the dynamics and draw conclusions about the future rate decision.

Any information pointing to a future FOMC rate decision is very useful.

You can read more here.

Thursday

EUR (Euro) / Main Refinancing Rate - 15:15

Important data that has a serious impact on the volatility of the price movement!

Main Refinancing Rate in the Eurozone (ECB).

TheECB is voting on future actions with the refinancing rate. The six members of the ECB's Executive Board and 15 of the 19 euro area central bank governors vote on how to set the rate.

The refinancing rate is the most important parameter affecting liquidity in the financial system. Depending on the size of the lending rate, the lending rates for companies and consumers depend on it.

Banks can borrow funds from the central bank at the current lending rate. In order to make money, they charge their interest and lend to companies and consumers. The higher the rate, the more interest the companies and consumers have to pay on the loan.

The refinancing rate is the most important tool to fight inflation. Without exotic influences (logistical collapse under Covid-19 and supply chain disruptions), inflation rises from increasing consumer demand. Companies start producing more and more to meet demand, while prices also rise. As companies start ordering more and more raw materials to produce, raw material prices also increase. A spiral of constantly rising prices is created.

Similar to a fire, you have to reduce the oxygen supply and the fire will start to shrink. The more expensive it becomes to get money, the less people start buying goods, the less businesses produce, and the less the cost of raw materials increases.

Further increases are unlikely as the economy worsens.

The current market forecast is 4.5%.

You can read more here.

EUR (Euro) / Monetary Policy Statement - 15:15

Important data that has a serious impact on the volatility of the price movement!

ECB Monetary Policy Statement.

In the statement the ECB describes the current state of the economy, the ECB's forecasts for the economic situation and monetary policy.

USD (US Dollar) / Core PPI m/m - 15:30

Important data that has a major impact on the volatility of the price movement!

Change in the Core PPI for the month.

TheUS Federal Bureau of Statistics releases the Core PPI every month, about 13 days after the end of the previous month. To calculate it, prices are taken by major sectors of the economy, as well as by stages of production.

Core - a variant of the index calculation that excludes energy and food prices. It is used for "smoothing" the index and operational monitoring of price changes.

Energy is the most important sector of the modern economy. Energy is used to produce goods, to move transportation that moves produced goods, to light streets, to heat houses and much, much more.

The higher the price of energy, the higher the price of all other aspects of life. Rising/falling prices cascade down a long chain, affecting the prices of everything else.

Food is the most important component in human life. Without quality nutrition, a person cannot exist. Today, most of the food produced is done by machines. Raw materials are sown and harvested using specialized machines. It is then processed in factories by specialized machines. Energy binds this whole process together, as neither machines nor machines will work without energy - fuel and electricity obtained in various ways.

Since this is a basic element of human survival, the higher the prices of products, the faster they rise - people buy products en masse, fearing shortages and everything else.

In order to "smooth" the price growth, economists went for a trick and made an additional parameter that does not take into account energy and food prices. Even without taking these prices into account, in any case they indirectly affect everything because of their importance.

The producer price index is an important parameter that shows how prices change on the production side. Before a product hits the store shelves where people buy it, the product has to be produced. This is a whole chain of stages where raw materials are gradually processed into a product.

All these stages and transformations require different goods, equipment and so on. If prices increase at each of these stages - it affects the cost of the final product.

When a manufacturer realizes that the cost of his product is constantly rising, he is left with two options for further pricing of the finished product:

• Either reduce his margin. In simpler terms, start selling the product at a loss, and therefore earn less.
• Or increase the cost of the product itself. In this case, the end buyer pays for the increase in production prices.

I think you realize that producers most often choose the second option. Therefore, the parameter of producer price growth actively influences the growth of commodity prices and consumer inflation.

The core producer price index has been in a downtrend for a year. More often than not, the actual change coincides with the predicted change.

After the COVID-19 lockdowns, which caused a large number of businesses to close and disrupted logistics, producer prices rose sharply. The main factor was that direct-to-consumer businesses were placing large numbers of orders because the goods were simply not reaching warehouses.

For example, you wanted to order 10 cars. You placed the order, 1 arrived due to logistical problems. So to solve this problem, you made multiple orders to dial those 10 cars up bit by bit. This caused a huge strain on the companies.

They had to work harder, order more raw materials and components for production to meet this demand. However, people are on lockdown, there are also difficulties with raw materials, as there are disruptions in logistics, and the enterprises supplying raw materials are also partially in lockdown and also have problems with logistics at their level. Vicious circle.

As soon as the supply problem started to be solved, prices started to come down.

The latest release of the actual rate (0.3%) was higher than the forecast (0.2%).

The current market forecast is 0.2%.

You can read more here.

USD (US Dollar) / PPI m/m - 15:30

Producer Price Index change for the month.

TheUS Federal Bureau of Statistics releases the Producer Price Index every month, about 13 days after the end of the previous month. The index takes prices by major sectors of the economy as well as by stage of production.

This type of index takes into account energy and food prices, showing a more realistic picture of the current situation.

Why producer prices are so important is described above. We would like to discuss separately why the pure index is so important, without removing prices convenient for statistics.

When working with data, they are easy to manipulate. The reason for manipulation is most often an attempt to fit reality to one's model, and to say that the people in charge are good, they are doing everything right and everything will be fine.

As it was described above, energy is the main indicator influencing everything. So trying to reduce the weight of this indicator just doesn't show the reality.

Just compare a graph of Core PPI and PPI, how beautiful Core PPI is and how volatile PPI is. That's all the manipulation in action.

The latest release of the actual index (0.6%) was higher than the forecast (0.3%).

The current market forecast is 0.3%

You can read more here.

USD (US Dollar) / Unemployment Claims - 15:30

Unemployment Claims.

TheUS Department of Labor releases weekly claims data. The indicator is based on the citizens who applied for unemployment benefits for the first time in the last week.

The indicator is very important because it shows the strength/weakness of the labor market. If people are employed, they earn wages and consume services and goods. This can influence the rise in consumer inflation.

At the moment, the Fed is actively fighting inflation. A strong labor market indicates to the central bank that the economy is holding up and the current inflation situation will continue.

The more jobless claims, the better for the Fed's actions. The fewer jobless claims, the worse for the Fed's actions - they have to raise the rate even more.

The latest release of the rate (221K) was higher than forecast (213K). The labor market remains stable. For this reason, there is no particular increase in unemployment.

The current market forecast is 217 thousand.

You can read more here.

EUR (Euro) / ECB Press Conference - 15:45

An important event that has a serious impact on the volatility of the price movement!

Press conference of the ECB President and Vice President.

ECB President Christine Lagarde will answer the questions of economists and journalists during the press conference after the announcement of the monetary policy decision.

Anexample of such a speech.

USD (US Dollar) / 30-Y Bond Auction - 20:01

Auction of 30-year Treasury bonds.

The U.S. Department of the Treasury (Treasury) holds an auction of 30-year bonds once a month to raise capital for the country's budget.

Understanding current bond yields is very helpful in understanding the state of the financial system. Whether investors are willing to take risks or not.

The data is reported in the format - 4.09|2.6.

4.09 is the highest yield on realized bonds.

2.6 - number of bids for one bond (allows to measure the liquidity of the current market).

The yield is formed due to supply and demand (prices) for bonds, as well as current conditions in the economy. Depending on investors' sentiments, the rate can be both higher (risk premium) and lower (everything is more or less calm).

When financial market conditions are unfavorable, capital is concentrated in safe government bonds, which is strongly reflected in the yields of medium (1-3 years) and long maturity (4-30 years) bonds.

In a normal environment, medium and long bonds are not as interesting as short bonds or equities. Investors put capital into higher yielding assets. Yields on medium and long bonds remain high because prices are low.

When trouble starts, investors want at least modest but reliable returns. They start buying up cheap medium and long bonds to get additional returns. Prices rise, yields fall and become lower than short bonds.

This is not a normal situation. Short bonds should always be lower yielding because the risks are minimized due to the short maturity. All this is well reflected in the bond yield curve. For this reason, the yields of medium and long bonds are a good indicator of the exit from crisis time - the yields of medium and long bonds will start to increase relative to short bonds.

The auction is where the market picks up bond yields. Therefore, it is an important parameter to track and understand where the economy and finance will move.

The latest actual figure (4.33|2.5) was lower than the forecast (4.36|2.4).

The current market forecast is 4.33|2.5.

More details can be found here.

Friday

USD (US Dollar) / Prelim UoM Consumer Sentiment - 17:00

Prelim U.S. Consumer Sentiment.

TheUniversity of Michigan releases preliminary consumer sentiment data based on a survey of citizens answering questions about the current and future state of the economy. The main version will be released 2 weeks after the release of the preliminary data.

The indicator shows how consumers feel at the current moment, as well as what they expect in the future. If they feel negative, it indicates a possible decrease in consumption in the future, which worsens the economic situation. If they feel positive, it indicates a possible increase in consumption in the future, which improves the economic situation.

As part of the fight against inflation, this indicator in conjunction with consumer income, consumption can be a good indicator for the Fed's next actions.

Since August, the indicator has been on a downward trend. The actual indicator (76.5) was slightly below the forecast (77.1).

The current market forecast is 79.

You can read more here.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/bPIU6mpr/

At the opening of the month, we got a correction of 10%, the fall ended and the price is now consolidating and preparing for an upside breakout or another decline, in any case I am interested in the close of the week.

Weekly

https://www.tradingview.com/x/ttrns8Eb/

We have everything simple here, we close the week above 69000 and get 75-80k soon, or we lose the level and get a decline to the 59000 zone and below.

Daily

https://www.tradingview.com/x/GgfPuedO/

For clean and confident longs - we need to consolidate above 71900 to move towards 80000, however if the past ATH becomes resistance for us, our decline will turn to the 58-59k level, either way we need a strong cluster to show market players confidence where price will go, so as I said above, all focus is on the week.

4Н

https://www.tradingview.com/x/BwtPF5E1/

Since last posting, we went ahead with the plan, we filleted the CME gap and price got a nice bounce. The focus here is on how the directions of movement will show us a close above or below, the 69000 level.

Dominance

https://www.tradingview.com/x/vDsawBy4/

At the moment, I do not see a possible full-fledged growth without a test of 57.21%, as soon as we touch this level - we will start a decline to 48%.

ETH/USDT

Monthly

https://www.tradingview.com/x/rOFAhIEU/

Efirium has given a 10% retracement since the opening of the month, but since the correction late last month it has given 21%, which is good values. I would still like to see a 10% pullback on top and then I could be more confident about a test of 5000.

Weekly

https://www.tradingview.com/x/NWK3Xu5o/

In last week's post I said I would wait for an exit right after the close of the week or an exit via a PWL update, we got the second scenario, although I was waiting for the first type of development. If we can close the week above PWL, that would be just fine for an up-rel.

Daily

https://www.tradingview.com/x/VB9Vdwpe/

We see price getting a hold as soon as we touch 3279, which tells us about the demand that is forming in this range. To open longs, I want to see a V-shaped move with absorption of the April Fool's prank as a spill and then we can think about 4300. However, if that doesn't happen, then I'd be docking ether again as soon as it's at 3000.

4H

https://www.tradingview.com/x/kggg3tXK/

We went with the first scenario, but it's too early to get excited, I suggest we wait for the close of the week and also the close of the 4H bar, if it can close above 3460, then it will be a bit more of a chance for upside.

ETH/BTC

Weekly

https://www.tradingview.com/x/GvtF09O0/

I think you are very tired of waiting for this turn of events, but if you are suddenly frightened by the information about early purchases, supposedly there will be a "correction", you can always come in, just look at this chart and you will immediately feel better and no "correction" will not scare you, but will only make you stronger.

FX

DXY

Weekly

https://www.tradingview.com/x/dTWQFh6y/

At the moment the price is in a phase of uncertainty, and this is logical, given the expectations on the SPI and the ECB rate and policy. On the one hand last week removed the External BSL, closing with a downward candle (pinbar), on the other hand there is support in the form of FVG BISI + OB. However, in terms of fundamentals, if the ECB leaves the rate unchanged it will be a good signal for a short-term strengthening of the Euro.

Daily

https://www.tradingview.com/x/DwtC9rgB/

From a daily timeframe perspective we can see liquidity manipulation on both sides, which makes it difficult to assess further context, but if we take the overall picture from the opening 2024 as a consolidation, it would be optimal to consider a downside scenario, especially given the way April opened (External BSL manipulation).

Since the major news events are released on Wed-Thurs, we can assume that Mon-Fri will be in consolidation or forming liquidity for the news. Taking into account Friday's closing as a pin bar, we expect the downward movement to continue.

H4

https://www.tradingview.com/x/0Pzt3SiN/

We form the plan as follows:

Mon-Fri potentially consolidation in Friday's range, with further news manipulation to zones:

1. Rejection + MO
2. PWH
3. Internal BSL

Wed-Fri downside movement with daily OB + FVG BISI target at 103.8.

EURUSD

Weekly

https://www.tradingview.com/x/SQ5kwWXu/

Last week's EURUSD chart showed a SMT pattern with the DXY index chart, with this pattern forming at the 50% level of the main long-term consolidation. Undoubtedly this close of the week indicates a continuation of the uptrend, but everything will depend on the ECB press conference and their rate decision.

Daily

https://www.tradingview.com/x/1KZf8gwb/

In terms of the daily timeframe we see a formed OB which has engendered an upward OF. The target for this OF will be the External BSL level (1.0981).

The upward scenario could start from current values, or through a manipulation to the body of the OB.

H4

https://www.tradingview.com/x/5f0XlbC4/

There is a problem zone on H4 in the form of FVG SIBI + OB, so the plan is as follows:

1. Breakdown of the problem zone followed by re-test of Inversion FVG and continuation of the upward movement.
2. Compression movement in Mon-Wt to the zone of daily +OB, in order to form liquidity under the ECB press conference with further reversal in the upward direction.

GBPUSD

Weekly

https://www.tradingview.com/x/FTzMDizc/

On the GBPUSD chart everything is not so clear, unlike EURUSD it looks shorts, especially the equal lows at 1.2500. We have mentioned this level very often, but the Pound still can not reach it, and in general its movements since the opening of 2024 are quite weak.

Now for longs we are prevented by the formed -OB + FVG SIBI, perhaps we will see a rascorrelation with EURUSD, for this we should look at the EURGBP chart.

EURGBP

https://www.tradingview.com/x/UZo5Q36i/

EURGBP chart also looks ambiguous, but in general we can assume a growth scenario to the removal of Internal BSL + FVG SIBI (weekly). Thus, taking into account the descending DXY, and ascending EURUSD, GBPUSD may be in consolidation, besides, no news data on GBP is expected this week.

Daily

https://www.tradingview.com/x/K48kYjWp/

There is nothing much to consider on medium-term timeframes, the price is stuck in consolidation, we should wait for the ECB data, which may lead to an exit from consolidation and the context will be easier to determine.

SP500 / NQ100

Daily

https://www.tradingview.com/x/5Mdu5PTb/

The US stock market continues to experience a period of uncertainty among investors, which is reflected on the indices by consolidation and discordance between SP500 and NQ100.

Unfortunately, it is quite dangerous to make any context and plans for the time being, and the best solution is to work intraday with the logic of session movements, because even big banks like Citigroup, Goldman Sach, JPMorgan, Deutsche Bank differ in their views.

Citigroup and Goldman Sach expect the stock market rally to continue, in particular the capital flow from technology giants to other areas and small businesses (which is evident from the weak NQ100 compared to SP500).

However, JPMorgan and Deutsche Bank are skeptical because of the high Fed Funds rate and the increasingly low potential for a rate cut. Deutsche Bank even expects a recession.

Of course we need to wait for inflation data, given the stable labor market, high inflation figures may lead to an exit from risky assets to less risky ones, which will show us a downward trend on the indices.