Weekly plan - 06/17 - 06/21/2024

Macro

Next week sees the release of data on the state of the manufacturing and service sectors in the US, Germany and France, and retail sales.

Monday

USD (US Dollar) / Empire State Manufacturing Index - 15:30

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 New York State Manufacturing Index every month. 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 local 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 (-15.6) was lower than the forecast (-9.9).

The current market forecast is -12.5.

More details can be found here.

Tuesday

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

Core Retail Sales change 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 (0.2%) was equal to the forecast (0.2%).

The current market forecast is 0.2%.

You can read more 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 hit to auto sales is a decrease in activity by dealers, manufacturers and banking institutions issuing car loans. The auto industry generates 3% of U.S. GDP and creates actual and indirect jobs for 10 million people.

The latest release of the actual rate (0.0%) was below the forecast (0.4%).

The current market forecast is 0.3%.

You can read more here.

Wednesday

USD (US Dollar) / Bank Holiday - All Day

Freedom Day.

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

Thursday

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 (242k) was above the forecast (225k).

The current market forecast is 235 thousand.

You can read more here.

Friday

EUR (Euro) / French Flash Manufacturing PMI - 10:15 am

Preliminary index of business activity in the manufacturing sector in France.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to current inventories in the company's warehouses, the number of new requests for replenishment of warehouses, new orders and their prices, as well as employment in the company, the workload of production and the current business conditions.

Flash is a preliminary index that is refined a week later in the Finale (final) version. More often than not, the Finale version does not make many adjustments, so the focus is always on the preliminary (earliest) index.

Production is one of the basic elements of any economy and is at the very beginning of the chain of creating goods that are then consumed by people. Since every manufacturer is a professional in their industry, they actively monitor market demand and understand the current market trend.

If a manufacturer sees a deteriorating market situation, there is no point in loading production capacity, investing in new facilities and hiring staff, and purchasing new raw materials. A large number of related very important elements of the economy suffer, such as the labor market, consumption, construction and many others.

France is Europe's second economy and a major exporter of goods. It is very important to keep an eye on producer sentiment as France is a major contributor to the EU's supply of goods.

Producer sentiment has been falling since the beginning of 2023. Very high refinancing rates are to blame, businesses cannot raise capital for active production. The further they raise/hold the rate, the more the manufacturing sector will stagnate, affecting the economy as a whole.

The latest actual rate (46.7) was higher than the forecast (45.8).

The current market forecast is 46.8.

You can read more here.

EUR (Euro) / French Flash Services PMI - 10:15 am

Preliminary French Flash Services PMI.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to new orders and their prices, employment, workload and current business conditions.

Flash - preliminary index, which is refined a week later in Finale (final) version. More often than not, the final version does not make any particular adjustments, so the focus is always on the preliminary (earliest) index.

The service sector is the most important element of the modern economy of any country, making a large contribution to GDP. A large number of population works in services and most of the consumer demand is accumulated in them. As the service sector is not so strongly tied to serious capital investments, it is less tied to credit rates for attracting new capital investments.

If a company sees the economy deteriorating, it makes no sense for it to make active plans for growth. The service sector is very much tied to the income of the population. If people will buy food and clothes in any case, they are likely to postpone going on vacation or subscribing to a new resource.

The last actual indicator (49.4) turned out to be lower than the forecasted one (51.8).

The current market forecast is 50.

You can read more here.

EUR (Euro) / German Flash Manufacturing PMI - 10:30 am

Preliminary index of business activity in the manufacturing sector in Germany.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to current inventories in the company's warehouses, the number of new requests for replenishment of warehouses, new orders and their prices, as well as employment in the company, the workload of production and the current business conditions.

Flash is a preliminary index that is refined a week later in the Finale (final) version. More often than not, the Finale version does not make many adjustments, so the focus is always on the preliminary (earliest) index.

Germany is Europe's first economy and the third largest exporter of goods in the world. The country is a major center of engineering and chemical industries. Unlike France, which is the second country with the most nuclear power plants, Germany has turned toward green energy and is very hooked on natural gas. After the outbreak of war in Ukraine, Germany drastically cut gas supplies from Russia, which hit the manufacturing sector very hard.

Manufacturers' sentiment has been falling since March 2021. There were a few positive spikes in the index, but the decline has continued. In addition to the energy problems, refinancing rates are also superimposed. The further they raise/hold the rate, the more the manufacturing sector will stagnate, affecting the economy as a whole.

The latest actual rate (45.4) was higher than the forecast (43.4).

The current market forecast is 46.4.

You can read more here.

EUR (Euro) / German Flash Services PMI - 10:30 PM

Preliminary German Flash Services PMI.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to new orders and their prices, employment, workload and current business conditions.

Flash - preliminary index, which is refined a week later in Finale (final) version. More often than not, the Finale version does not make many adjustments, so the focus is always on the preliminary (earliest) index.

The latest actual index (53.9) was higher than the forecast (53.5).

The current market forecast is 54.4.

More details can be found here.

USD (US Dollar) / Flash Manufacturing PMI - 16:45

The preliminary index of business activity in the U.S. manufacturing sector.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to current inventories in the company's warehouses, the number of new requests for replenishment of warehouses, new orders and their prices, as well as employment in the company, the workload of production and current business conditions.

Flash is a preliminary index that is refined a week later in the Finale (final) version. More often than not, the Finale version makes few adjustments, so the focus is always on the preliminary (earliest) index.

There is a big misconception that the US can only consume and they don't create anything else. This is actually not true, the US is the second exporter of goods in the world. The country's geographical location forced it to develop its own production to meet its needs. Along with this, the US has a large amount of minerals on its territory, which additionally helps in the development of industry.

The USA is indeed the world's largest consumer, so much of the world economy depends on the conditions in the US market. The industry is very active in the local market, so it is a good indicator of future consumption.

The latest actual reading (50.9) was below the forecast (50.0).

The current market forecast is 51.0.

You can read more here.

USD (US Dollar) / Flash Services PMI - 16:45

Preliminary U.S. Flash Services PMI.

S&P Global conducts a monthly survey among purchasing managers. Managers are asked to answer questions related to new orders and their prices, employment at the company, workload and current business conditions.

Flash - preliminary index, which is refined a week later in Finale (final) version. More often than not, the Finale version does not make many adjustments, so the focus is always on the preliminary (earliest) index.

The service sector takes a huge share of the US GDP, which is the reason why we still don't see labor market contractions. Services are not as dependent on capital investment as the manufacturing sector, which suffers from a high refinancing rate.

The latest actual rate (54.8) was higher than forecast (51.2).

The current market forecast is 53.4.

More details can be found here.

Crypto

BTC

Monthly
https://www.tradingview.com/x/C0H0qWCp/

No clear picture here, I'm just waiting for the end of summer for price to hold in this projection.

Weekly
https://www.tradingview.com/x/DxjxE0h8/

Here price did a great job with last week's low, so I want to see a body close above last week's low, however the chart is not particularly strong yet, so we may be stuck in this range for the rest of the summer.

1D https://www.tradingview.com/x/Qc4LM8bV/

Braking zone waiting in this range, no comments more.

ETH

Monthly
https://www.tradingview.com/x/zbQBHKIf/

Ether is looking chipper, which means alta will also stay strong. No clear criteria for closing the month here, so we wait.

Weekly
https://www.tradingview.com/x/APfI2jhR/

Here it is important for me to see strength in the form of a weekly close, above the last low, as the payoff was too bright and strong.

4Н
https://www.tradingview.com/x/ELsVLOKL/

Only two scenarios here, I like the second one better, however the weekly momentum was too broad, so the pullback could be from the current upside.

ETH/BTC

Weekly
https://www.tradingview.com/x/9OmzNf0x/

Here we are on the verge of a pampa, this summer will set the loy of the year.

FX & Stock market

DXY

Weekly

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

As expected since last week, the DXY index managed to break the downward -OB on the back of the FOMC meeting, whose rhetoric is positive for the DXY in the near to medium term. For this reason, we expect an upward move towards the previously set External BSL targets (106.5 / 107.4).

Daily

https://www.tradingview.com/x/yLwyBZ2m/

From the perspective of the daily timeframe it is optimal to consider a small correction to the BB + OB zone, followed by a move to the External BSL (106.5).

H4

https://www.tradingview.com/x/uY98iDVH/

On the 4-hour timeframe we are interested in the FVG zone in the context of the daily BB+OB. On Tuesday, retail sales data is released, which could form the low of the week and further movement towards External BSL (106.5).

EURUSD

Daily

https://www.tradingview.com/x/zlex14cf/

EURUSD worked perfectly according to last week's plan, where we reached the first target in the form of the low of the junior consolidation (1.0720), in particular consolidated below. At the moment we expect a test of the formed block -OB + 1.0720 level, with further movement towards the main target in the form of the minimum of the global consolidation, and intermediate target in the form of Internal SSL (1.0600).

H4

https://www.tradingview.com/x/uTbF0UYJ/

From the 4-hour timeframe perspective, we assume a re-test of 1.0720, without a move to the premium, with a potential formation of the high of the week on Tuesday.

GBPUSD

Daily

https://www.tradingview.com/x/CGXlgdp5/

Once again GBPUSD is trying to pass the key institutional level of 1.2800, but all attempts are unsuccessful. On the test of this level, which is also the maximum of the global consolidation, a junior consolidation was formed, where the minimum of this consolidation inside the weekly FVG zone has been removed for the moment. On the other side we have a clear absorption in the form of -OB.

On the fundamental side, this week is a crucial week for GBPUSD. On Wednesday the CPY y/y data will be released, on Thursday the Official Bank Rate and the Monetary Policy Summary will be released.

Based on the available data we assume consolidation until Wednesday between the FVG and -OB zone. We have to wait for the fundamental data to further define the contests.

SP500 / NQ100

Daily

https://www.tradingview.com/x/pfxp0vKk/

The SP500 / NQ100 stock indices continue their rally, further filling the AI bubble.

Most of the gains in these two indices are attributable to just a few companies in the electronics technology sector, such as SMCI, NVIDIA and Broadcom.

It should be noted that the Dow Jones Industrial Average is not performing as well, which creates a strong correlation between the two indices.

Dow-Jones 30

https://www.tradingview.com/x/hOsQgVN1/

This situation confirms the fact that the US economy is in a stagnation phase, which is clearly shown on the Dow-Jones index chart (YM1), and all the growth we see is artificially overheated segment of electronic technologies related to the popularity of artificial intelligence.

VIX

https://www.tradingview.com/x/DW3DaQX8/

It is also worth paying attention to the volatility index - VIX, which currently gives us an understanding that the correction is close, and the current correlation with the growth of NQ100 / SP500 is not infinite.

We advise to continue working on the uptrend, but keep a close eye on the fundamental situation and be careful.