Weekly plan - 12.08 - 16.08.2024

Macro

Next week sees the release of US manufacturing and consumer inflation data, as well as US retail sales. Thursday will be a bank holiday in France and Italy.

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

Tuesday - Core PPI m/m, PPI m/m.

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

Tuesday

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.

The US 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 increasing, he is left with 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 resolved, prices started to come down.

The latest release of the actual rate (0.4%) 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

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

Producer Price Index change for the month.

The US Federal Bureau of Statistics releases the PPI monthly, about 13 days after the end of the previous month. It is calculated using prices by major sectors of the economy, as well as by stages 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 figure (0.2%) was higher than the forecast (0.1%).

The current market forecast is 0.2%

You can read more here.

Wednesday

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

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

Change in Core CPI for the month.

The US 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. It causes very big economic and social problems, which in case of 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 (0.1%) was lower than the forecast (0.2%).

The current market forecast is 0.2%.

You can read more here.

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

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

Change in the Consumer Price Index for the month.

The US Federal Bureau of Statistics releases the CPI monthly, 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 the average person.

The latest actual figure (-0.1%) was lower than the forecast (0.1%).

The current market forecast is 0.2%.

You can read more here.

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

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

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

The US Federal Bureau of Statistics releases the CPI monthly, 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.

An indicator in annualized terms. 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 (3.0%) was lower than forecasted (3.1%).

The current market forecast is 3.0%.

You can read more here.

Thursday

EUR (Euro) / French Bank Holiday - All Day

Assumption of the Blessed Virgin Mary.

France is the second economy in Europe. Banks will be closed on the holiday. As most of the volumes pass through large financial institutions and banks, their absence from the market will cause liquidity outflow and chaotic volatility.

EUR (Euro) / Italian Bank Holiday - All Day

Assumption of the Blessed Virgin Mary.

Banks will be closed on the holiday. Since most of the volumes pass through large financial institutions and banks, their absence in the market will cause liquidity outflow and chaotic volatility.

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

Change in Core Retail Sales for the month.

TheU.S. Census Bureau releases monthly data on the change in Core Retail Sales for the month.

To calculate the Core, the data excluding auto sales is taken. Statistically, automobile sales account for about 20% of retail sales. Car prices are constantly changing due to strong demand and therefore create a lot of volatility.

As described in past reviews, economists try to fit any situation to a model. Volatility can create problems for these models, so they remove the volatile component from the calculation.

The retail sales baseline is very important because it is the first in the chain to determine consumer demand.

The more people buy goods, the less they become available in store warehouses. In order to supply the demand, stores start to order more and more goods from enterprises. Enterprises begin to actively purchase raw materials to produce these goods.

If people buy less goods, the stocks in the stores' warehouses remain and there is no point in making a new order to the enterprise. The chain that creates a positive impact on the economy does not work.

With the help of the retail sales indicator a large number of statistics are calculated, on the basis of which further decisions on the work of enterprises and government agencies are made.

At the moment, the main task of the Fed is to reduce inflation as carefully as possible. That's why the declining retail sales figure is a short-term positive, saying that the impact is working and they will reach the 2% inflation target in the long run.

The last release of the actual figure (0.4%) was higher than the forecast (0.1%).

The current market forecast is 0.1%.

More details can be found here.

USD (US Dollar) / Retail Sales m/m - 15:30

Retail Sales Change for the month.

TheU.S. Census Bureau releases monthly data on the monthly change in Retail Sales.

To calculate the index, the data is taken into account the sales of automobiles. Statistically, automobile sales account for about 20% of retail sales. Car prices are constantly changing due to strong demand and therefore create a lot of volatility.

As described in past reviews, cars are a very important part of American life because the infrastructure is very spread out geographically and the transportation system is not as developed as in Europe.

Underreporting real statistics is not a good thing, but when compared to inflation and core inflation (CPI and Core CPI / PCE and Core PCE), car sales are not as important as rising food and energy prices.

You can not change a car for a long time and still own it. However, the car market in the US runs on credit. Mostly people do not fully own cars, but take it on lease or loan. After a certain period of use, they do not pay off the full loan for the current car change it and reallocate the loan to a new car. For this reason, the global aftermarket is filled with cars from the USA.

The impact on car sales is a decrease in the activity of dealers, manufacturers and banking institutions issuing car loans. The auto industry generates 3% of US GDP and creates actual and indirect jobs for 10 million people.

The latest release of the actual figure (0.4%) was higher than the forecast (0.1%).

The current market forecast is 0.1%.

You can read more here.

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

Unemployment Claims.

The US Department of Labor releases weekly claims data. The indicator is based on people 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 receive wages and consume services and goods. This can influence the growth of 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 (233K) was below the forecast (241K).

The current market forecast is 239 thousand.

You can read more here.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/TMlmD33u/

It's too early to open the champagne, but now is a good time to stock up on products for a future feast. As long as the monthly close is based above last month's low, we can breathe easy.

Weekly

https://www.tradingview.com/x/2csivRX2/

Things are looking great for the weekly either way. Look at this weekly bar and find similarities over previous periods where the same situation has occurred, given the continued structure of the global period.

For me obviously comes the March 2023 and June 2023 range, however the % extension of course is different everywhere. I expect the price to move without flashy impulses and aim to renew the high, so try to focus on bitcoin's strength after the close of the month as often as possible.

Daily

https://www.tradingview.com/x/iGfH8K6S/

Let's remove all marker installations and just take the 59k and 54k zone as for zone A, the 64k-73k zone as zone B. Any achievement of these parameters I will take as indicating arguments for longs.

4Н

https://www.tradingview.com/x/xG4MAKzp/

If you are an attentive reader, I have not focused on the 4H range lately, but here we have the situation modeled more clearly than before: I expect a 2 stage turnaround because I am not Wolf Messing.

• correction to IMB with POI capture, from which the momentum will go and we may not go lower.
• Working with a swing favorite that has compression, imbalance, liquidity in it. Most likely after the second outcome price will form an equal from 48888 and go higher, however such events could be either this month or next month.

Dominance

https://www.tradingview.com/x/VTLJZ6xr/

If there is no reaction within 1-2 months, our next target is 61%, but the market will be very hurt.

ETH/USDT

Monthly

https://www.tradingview.com/x/NahM3Y5x/

My only regret is that I didn't put in enough risk for the limit order at 2747, the rest I like very much. If the month closes above 2810 it's a reason to open champagne in advance.

Weekly

https://www.tradingview.com/x/J1hYhbwo/

When I showed you this setup, I couldn't even imagine that we would impulsively move away from this zone and not get accumulation, I am here waiting for any weekly close to accumulate inside the RB, which we will form tomorrow at 3am. https://www.tradingview.com/x/3V5Bzl94/

Daily

https://www.tradingview.com/x/5knyaqS7/

My plan is very simple.

4H

BINANCE:ETHUSDT Chart Image by MKVL

ETH/BTC

Weekly

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

I am only waiting for the level to recover above and for the body of the weekly bar to close above.

FX & Stock market

DXY

Weekly

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

The DXY index has taken out the key level of Internal SSL (102.3), having had a rather strong upward reaction last week, which may signal a change of trend. However, on the other side there is FVG SIBI area with key level at 103.6, which may continue the downward movement to lower open FVG BISI. According to current PPI / CPI expectations, the DXY index should react in a downward direction, but it will all depend on what numbers come out.

Daily

https://www.tradingview.com/x/8HJPX0Ll/

Since the context is not entirely accurate, we suggest working from last week's high (PWH) and low (PWL) with the support zones of 103.6 above and FVG BISI below.

EURUSD

Weekly

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

EURUSD came to a major institutional price level of 1.10, while taking out the maximum of the local rent, consolidating well below these levels. However, in this case, we see liquidity withdrawals on both sides, meaning the upward OF is not broken to consider shorts, which tells us of a short-term consolidation.

Daily

https://www.tradingview.com/x/Y7FutTMT/

From a daily timeframe perspective, we see that price failed to pass the GAP zone, and also left the 1.0870-1.0850 zone as a key area of interest for longs, with the context of PWL withdrawal. This could be a good opportunity to consider a move back to 1.10 and 1.1030 (High Of Global Range).

GBPUSD

Weekly

https://www.tradingview.com/x/fdhKXD8A/

GBPUSD continues to decline and has formed a rather serious downward rally. At the moment the price is below the global consolidation high and we see FVG SIBI as a zone of interest for a downside move, but the upward OF is not broken yet.

Daily

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

From a daily timeframe perspective the situation is identical. So far we have the right to consider the movement only up to FVG SIBI, where the main decision on further narratives will be made.

SP500 / NQ100

Weekly

https://www.tradingview.com/x/q8fbGKlb/

Last week showed quite an impulsive upward movement, which could be the start of a new upward narrative.

SP500 took out the key zone of Internal SSL and formed an SMT with NQ100, which is a good set-up for a long, but currently there is a problem zone in the form of FVG SIBI at 5432, which could give a downside move.

NQ100 has taken off not only the key zone of Internal SSL but also the low of 2 quarters of the year, formed SMT with SP500 and is currently moving towards the problem zone of FVG SIBI + key level of 19000.

Daily

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

From a daily timeframe perspective, both charts have inverted the Gap zone where last week consolidated above it. Overall we assume that the US stock indices are indeed recovering from the fall and the uptrend is likely to continue. This week may form a small consolidation between the current two zones GAP and FVG SIBI, but the probability of inversion of FVG SIBI and price pass above is quite high.