Weekly plan - 08.07 - 12.07.2024

Macro

Next week, consumer and manufacturing inflation, consumer sentiment data are released. There will be a meeting of the Banking Committee of the US Senate.

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

Tuesday - Fed Chair Powell Testifies.

Wednesday - Fed Chair Powell Testifies.

Thursday - Core CPI m/m, CPI m/m, CPI y/y.

Friday - Core PPI m/m, PPI m/m, PPI m/m.****

Tuesday

USD (US Dollar) / Fed Chair Powell Testifies - 5:00 pm

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

Day 1.

Fed Chairman Jerome Powell testifies before the U.S. Senate Banking Committee on monetary policy.

The event occurs twice a year and consists of two parts. The Fed Chairman reports to the committee on his work and answers advance unknown questions. A text version of the report appears on the Fed's website.

Depending on the questions and answers of the chairman, new information about the situation may appear, or the Fed's position on some problematic issues may become clear. All this may cause volatility.

Wednesday

USD (US Dollar) / Fed Chair Powell Testifies - 17:00

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

Day Two.

Fed Chairman Jerome Powell testifies before the U.S. Senate Banking Committee on monetary policy.

The event occurs twice a year and consists of two parts. The Fed Chairman reports to the committee on his work and answers advance unknown questions. A text version of the report appears on the Fed's website.

Depending on the questions and answers of the chairman, new information about the situation may appear, or the Fed's position on some problematic issues may become clear. All this may cause volatility.

Thursday

USD (US Dollar) / Core CPI m/m - 17:00

Important data that has 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 (0.2%) was lower than the forecast (0.3%).

The current market forecast is 0.2%.

You can read more here.

USD (US Dollar) / CPI m/m - 17:00

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

Change in the Consumer Price Index for the month.

Every month, about 16 days after the end of the previous month, theU.S. Federal Bureau of Statistics releases the Consumer Price Index. 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.

If you take all of this into account, as with the example of comparing Core PPI and PPI, it creates a very large volatility in performance. If you look at it from an academic point of view, it is superfluous information that does not 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 latest actual rate (0.0%) was lower than the forecasted rate (0.1%).

The current market forecast is 0.1%.

You can read more here.

USD (US Dollar) / CPI y/y - 17:00

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

Change in the Consumer Price Index for the year.

TheUS Federal Bureau of Statistics releases the CPI monthly, about 16 days after the end of the previous month. It is 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 (3.3%) was lower than the forecast (3.4%).

The current market forecast is 3.1%.

You can read more here.

USD (US Dollar) / Unemployment Claims - 17:00

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 (238k) was higher than forecast (234k).

The current market forecast is 236 thousand.

You can read more here.

Friday

USD (US Dollar) / Core PPI m/m - 17:00

Important data with a serious impact on price movement volatility!

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 - this affects the cost of the final product.

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

• Either reduce his margins. 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 (0.0%) was below the forecast (0.3%).

The current market forecast is 0.1%.

You can read more here.

USD (US Dollar) / PPI m/m - 17:00

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

Change in the Producer Price Index for the month.

Every month, about 13 days after the end of the previous month, theUS Federal Bureau of Statistics releases the Producer Price Index. The calculation 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 (-0.2%) was below the forecast (0.1%).

The current market forecast is 0.1%

You can read more here.

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.

The indicator has been on a downward trend since August. The actual indicator (65.6) was below the forecast (72.1).

The current market forecast is 67.

You can read more here.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/M8pRU3Cy/

A good reversal of events, in the form of momentum at the opening of the new month, with a partial imbalance test. If we don't go below our new low of the month, this could be an extreme run.

Weekly

https://www.tradingview.com/x/XCCRif97/

For the weekly chart, holding above 56500 will be the key, after which consolidation should begin and no aggressive price decline.

Daily

https://www.tradingview.com/x/UTqzwMV4/

Since the last review, which is focused on the daily, the price hit 54720 flat and was getting a payoff, now we need to stay in this narrow range, before starting to take flight.

Indices

https://www.tradingview.com/x/N5lV07ph/

The overall altcoin capitalization got a drop into the range of the beginning of the second impulse. Now it is important for us that the capitalization receives inflows again and is able to go beyond the 232B level, in which case, it will be the most colorful turn of events that we can expect for the start of the fall-winter pump.

ETH/USDT

Monthly

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

We had a strong May candle, however it was almost wiped out. It will be saved if we can buy back this month and close above last month's low, if not, we will most likely get another price decline.

Weekly

https://www.tradingview.com/x/7JY6VgLV/

Here the situation is completely similar to the monthly chart, however based on the fact that today is Sunday, we will get such a close as it is and in the future we will either have a 2 bar engulfing candle or on the contrary another decline to 2717.

Daily

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

Taking into account that not all liquidation cascades are removed and we are waiting for a huge pool in the range below 2800, we need to be ready for the final collapse.

ETH/BTC

Weekly

https://www.tradingview.com/x/k8CkfvGv/

Here it is important for us to get a flight to 0.06 during the correction period.

FX & Stock market

DXY

Weekly

https://www.tradingview.com/x/72MiBY0F/

As expected, last week formed a downtrend after testing the upper boundary of the global consolidation on the back of labor market data and PMI reports, which led to the inversion of the nearest FVG BISI (Inversion) zone. This situation may indicate the continuation of the downward movement and this week to equal lows at 103.8 (Internal SSL).

From the point of view of fundamental data described above we have no right to build a context for the current week, as during Tuesday and Wednesday Fed Chairman J. Powell will speak before the Banking Committee of the U.S. Senate, and depending on his rhetoric will shape the movement of many markets. However, the CPI y/y and PPI m/m data released on Thursday and Friday are expected to influence the DXY index downward.

Daily

https://www.tradingview.com/x/qCcbRru0/

In terms of daily timeframe we are interested in 104.5-104.7 zone in the form of intersection of daily and weekly Rejection from which we can assume upward movement, as well as FVG SIBI (105.3) zone, formed last Wednesday, as the main zone of continuation of downward movement.

H4

https://www.tradingview.com/x/I2pBpkoy/

On the 4-hour timeframe we are currently observing a downward flow of orders, which should lead us to test the zone 104.5-104.7, but further movement is unknown, because, as mentioned earlier, everything will depend on the rhetoric of J. Powell. In general, we advise to work from the marked Rejection and FVG SIBI zones, where Rejection should be tested first, and then potentially FVG SIBI. See the chart for details.

EURUSD

Weekly

https://www.tradingview.com/x/KDRE5wxk/

EURUSD remained inside the local consolidation, reacting to its lower boundary, which is the 50% zone of the global consolidation. The range is narrowing, which complicates the formation of further narratives, as the chart does not have a clearly defined trend. Last week worked according to plan, and it even managed to invert the gap (I-Gap) at 1.0780, which is a clue to the continuation of the upward movement. However, on the other side we have the liquidity removed and the Rejection zone at 1.0850, which could lead to a downward movement.

It would be logical to assume a test of Rejection at 1.0850 and downward movement to the I-Gap zone - 1.078, but we have no right to take this scenario as a basis, because of the rhetoric of J. Powell, which can completely change the further scenario.

Daily

https://www.tradingview.com/x/eAfSM7Ky/

In terms of the daily timeframe, we see a consolidation above 50% of the daily Rejection zone, which already confirms the removal of this high as Internal BSL (1.0850), potentially on Monday. Further, it is logical to consider a reversal to the I-Gap zone (1.0775) with the potential to test the monthly opening.

H4

https://www.tradingview.com/x/7rkYygAr/

On the 4-hour timeframe, we see an upward flow of orders (OF), where the last point is a test of the FVG BISI. This flow should lead to the removal of the Internal BSL, definitely on Monday. Next, it is worth watching J. Powell's speech on Tuesday, Wednesday and the reaction to this level. If the upward OF is disabled, i.e. we get a reversal scenario, we should consider the I-Gap test as the next point of the upward continuation. However, the price has the right to continue the upward OF, breaking the Internal BSL, without returning to the I-Gap (1.0775). Detailed on the chart.

GBPUSD

Weekly

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

GBPUSD outperformed last week, reaching the upper boundary of the global consolidation (1.2800), after testing the FVG BISI zone (1.2635). At the moment, a potential reversal (as a deviation) or a move higher on the removal of the Outer BSL (1.29-1.30) should be considered.

Daily

https://www.tradingview.com/x/19Fd4Cxt/

In terms of daily timeframe price is in Rejection zone, which can hold the current upward momentum and show correction to 1.2770 and 1.2700 zones. If the Rejection zone is broken on Monday - Tuesday, we should expect an upward movement up to 1.2950 on the removal of the External BSL.

H4

https://www.tradingview.com/x/Hg3iqGr6/

On the 4-hour timeframe we observe a similar situation. Advises to be careful with the 50% Rejection zone, which, if a reversal pattern is formed, will lead us to the 1.2700 zone, where two key FVG BISIs are located, under the compression liquidity left last Thursday.

SP500

Daily

https://www.tradingview.com/x/CWUA6cgu/

The SP500 and NQ100 stock indices continue their upward rally, where, at the moment, the only area of interest for us is the nearby daily FVG BISI, which may continue the upward movement if not inverted.

In terms of projecting potential swings and ending the long term uptrend we are interested in:

• on the SP500 index, levels 5670 and 5737,
• 20850 and 21230 on the NQ100 index.

H4

https://www.tradingview.com/x/Zdy0rAe3/

In terms of the 4-hour timeframe, we are interested in the nearest 4-hour FVG BISI zone to continue the upward flow to the levels described above. In case of inversion of the 4-hour FVG BIBI zone, we should consider correction to the daily FVG BISI zone - 5580 at SP500 and 20350 at NQ100.

In general, we advise to closely follow the speech of J.Powell before the Congress, where based on his rhetoric to form further narratives, trading with reduced risk, or completely skip this week, engaged in self-development and improving their skills.