Weekly plan - 07/15 - 07/19/2024

Macro

Next week sees the release of data on the state of the manufacturing sector in New York State, retail sales, and jobless claims. There will be a speech by the head of the Federal Reserve, as well as the ECB meeting on the lending rate.

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

Monday - Empire State Manufacturing Index.

Thursday - Main Refinancing Rate, ECB Press Conference.

Monday

USD (US Dollar) / Empire State Manufacturing Index - 3:30 p.m.

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

New York State Manufacturing Index.

TheFederal Reserve Bank of New York releases the Empire State Manufacturing Index on a monthly basis. The index is based on a survey of manufacturing companies on business conditions, employment, shipments and new orders.

New York State is the fourth largest state in terms of population (20 million) and the third largest in terms of contribution to the nation's GDP ($2.05 trillion). No matter what anyone says about the US being the world's largest consumer (trade deficit of $948.1 billion), manufacturing is still very strong. There are a large number of localized brands covering almost all the needs of the citizens.

It is for this reason that manufacturing data is very important and can say a lot about the future dynamics of the economy as a whole. Since the basic element in the production of goods is enterprises, they are the best and fastest to react to changes in economic conditions. For the entire 23rd year, the indicator has more often than not been in strong negative territory, with few positive changes.

The most recent release of the actual indicator (-6.0) was higher than the forecast (-12.5).

The current market forecast is -6.0.

You can read more here.

USD (US Dollar) / Fed Chair Powell Speaks - 19:00

Fed Chairman Jerome Powell's speech at the Economic Club of Washington.

This is an important event, as the Fed Chairman has the biggest influence on the financial markets. Powell's speech can indicate the Fed's future actions.

Anexample of such a speech is a conversation with teachers.

Tuesday

USD (US Dollar) / Core Retail Sales m/m - 3:30 pm

The 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, based on 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 (-0.1%) was below the forecast (0.2%).

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 with the automobile sales taken into account. 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 previous reviews, cars are a very important part of American life because the infrastructure is very geographically distributed 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 (0.1%) was below the forecast (0.3%).

The current market forecast is 0.0%.

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 issue loans 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.

The current market forecast is 4.25%.

You can read more here.

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

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) / 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 figure (222K) was below the forecast (236K).

The current market forecast is 228 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.

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/tt7LfsBe/

For the current period, the monthly candle looks great for continued spot accumulation. A close above 56700 would be great for market accumulation.

Weekly

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

Here I am targeting last week's absorption and price braking, the most important thing for us is not to go lower. For now, the second scenario is not a priority.

Daily

https://www.tradingview.com/x/vDHCQl13/

Since last week's post, things are great here, we got back into the 54700 zone, got a test and flew off on a pullback. We need to get down into the current FTA range and get a test to find safe gains.

4Н

https://www.tradingview.com/x/bL9XVg8o/

The local outlook is that price needs to get back into the FTA area and accumulate within it for as long as possible, and only then towards the end of August, start to exit.

ETH/USDT

Monthly

https://www.tradingview.com/x/hB3MeIDg/

Liquidity was taken out, however there was no re-entry, which I expected. Waiting for the month's close, if it is above the last month's low it will be an explosive period for ether.

Weekly

https://www.tradingview.com/x/NOL6OK8l/

An analogy for a full or partial price takeover. Once that happens and the second week is neutral, then maybe has a chance to further buy altcoins on correction phases.

4H

https://www.tradingview.com/x/ATwh4v0J/

What is needed here is a pure test on the price correction phase to FTA and nothing else.

FX & Stock market

DXY

Weekly

https://www.tradingview.com/x/z0Zrzvdd/

On the weekly chart, the downward narrative is already clearly visible after the test of the upper boundary of the global consolidation. At the moment, the index is consolidating below 50% of the Rejection zone, which tells us about further removal of the Internal SSL (103.8) with the potential to test the levels of 103.4 and 102.8, which are problematic for the continuation of the downtrend and may lead to a reversal. Moreover, these levels mark the middle of the global consolidation, which is a high zone of short-term consolidation formation and a low-probability PA.

Daily

https://www.tradingview.com/x/PnGq3H0y/

In terms of daily timeframe, we are primarily interested in the removal of Internal SSL (103.8), most likely on Monday, where the index may return to the removal of last Friday's high with a test of 104.7 in the FVG zone, but this situation may not happen. The main targets for the current week are 103.4 and 102.8.

H4

https://www.tradingview.com/x/wn7HovGk/

In terms of 4-hour timeframe we have the nearest FVG SIBI zone, which will be the starting point for the removal of Internal SSL (103.8). After the removal of 103.8 we should watch this FVG SIBI zone, where in case of its inversion we can consider the movement to 104.7. The main high of the week can be formed on Thursday on the background of the release of Eurozone monetary policy data. Generally advises to work from the marked levels through confirmations on the lower periods.

EURUSD

Weekly

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

On the weekly timeframe the EURUSD chart is clearly aiming at the upper boundary of the local consolidation (1.0980), where at the moment the price has stopped at the key internal liquidity - 1.0920. On the other side we have a zone of interest in the form of GAP.

There are two variants of development:

1) Breakdown of 1.0920 level with movement to 1.0980 without correction;

2) Removal of 1.0920 with movement to Gap and then reversal to 1.0980.

Daily

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

In terms of daily timeframe the situation is identical, we expect to work with Internal BSL (1.0920), where depending on the situation we will consider vda narrative described above.

H4

https://www.tradingview.com/x/475F60wG/

On the 4-hour timeframe we have the nearest FVG BISI zone, which, in case of withdrawal of Internal BSL (1.0920), can be inverted and lead to a move to 1.8380 (Gap zone). In case after the test of FVG BISI the price will break the level of 1.0920, the return to Gap will not be considered.

In general, the current situation looks like MMSM model, where Gap is the zone of Original Consolidation, and on the removal of 1.0920 we can see SMR, so the variant of movement through correction to Gap is more optimal. In this case, the senior narrative of movement to the zone of 1.0980 will not change.

GBPUSD

Weekly

https://www.tradingview.com/x/pfQCk9EP/

GBPUSD broke out of the local consolidation of the weekly timeframe, while reaching the 50% level of the monthly Rejection zone and formed a SMT with EURUSD and DXY on the downside.

This information gives us the right to assume a correction from the current 50% Rejection zone to the 1.2890 - 1.2830 zone, with a potential retest of the upper boundary of the consolidation, after its breakdown.

Daily

https://www.tradingview.com/x/ys9o8fKP/

In terms of the daily timeframe, the situation is identical to the weekly chart. We expect a decoupling near the 50% level of the monthly Rejection zone, where in case of reversal the price will fall into the range 1.2890 - 1.2830 with overlap of the nearest FVG BISI zone.

H4

https://www.tradingview.com/x/LeDJGe2Q/

On the 4-hour timeframe we are testing 50% of the monthly Rejection zone, where two FVG BISI are formed below, where we will expect an inversion. This inversion will take us to the 1.2890 - 1.2830 zone. In case the inversion does not occur and 50% of the monthly Rejection zone is broken, we expect a retest and a move to the 1.3100 zone.

SP500 / NQ100

Daily

https://www.tradingview.com/x/gw6lk7Pq/

Last week we mentioned areas of potential end of the upward rally and the onset of a possible medium term correction at levels:

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

As we can see both indices fulfilled last week's plan perfectly, where they turned around at the first mentioned values (-2 projection).

At the current moment we observe that the NQ100 index will form a descending OB, which was validated by the test and reaction on Friday. On the other hand NQ100 index hit the zone of interest for FVG BISI long (20350).

At the same time, SP500 index got a reaction to the -2 projection - it did not form a takeover but just went into a phase of short-term consolidation, while it has many zones of interest to continue the rally in the form of FVG BISI near the level of 5588. For this reason, we can not talk about the end of the uptrend, as well as we can not talk about a new downward narrative, so we will wait for a clearer situation and work through the lower periods.

To confirm the medium-term downtrend narrative it is necessary to see the inversion of the mentioned FVG BISI zones on both indices.

H4

https://www.tradingview.com/x/QCQIMMP6/

In terms of the 4-hour timeframe we advise:

• on SP500 index to work from Friday's max/min, as well as FVG BISI zones in case they are reached (5588) or -2.5 projection zone (5737)
• on NQ100 index consider the nearest 4-hour FVG BISI as a zone of contraction acceptance, where in case of inversion we will see continuation of downward movement after reaction to Breaker + HTF OB zone, in conjunction with SMT, otherwise, if this FVG BISI holds, we dare to assume Breaker + HTF OB invalidation and PWH update with movement to -2.5 projection at 21200 level.

Be careful and work strictly from the marked areas.