Weekly plan - 05/20 - 05/24/2024
Macro
Next week sees the release of German/French/US manufacturing and service sector data, revised consumer sentiment. On Wednesday, the report on the last FOMC meeting will be released.
We advise to pay attention to events that cause uncertainty in price movement:
Wednesday - FOMC Meeting Minutes.
Monday
EUR (Euro) / French Bank Holiday - All Day
Spiritual Monday.
France is Europe's second largest economy. 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.
EUR (Euro) / German Bank Holiday - All Day
Spiritual Monday.
Germany is the first economy in Europe. 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.
Wednesday
USD (US Dollar) / FOMC Meeting Minutes - 21:00
Important data that has a serious impact on the volatility of the price movement!
Publication of the FOMC meeting minutes (FOMC Minutes).
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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 commission's decisions on the latest change in the refinancing rate. You can find out who voted in favor of a certain decision and who was against it. In the future, you can 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) / French Flash Manufacturing PMI - 10:15 am
Preliminary French Manufacturing PMI.
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 (44.9) was lower than the forecasted rate (46.9). The EU economy is more strongly tied to the refinancing rate than the US economy. The high rate was regularly raised by the ECB, which caused the situation to worsen and the economy to deteriorate.
The current market forecast is 45.8.
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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 (50.5) turned out to be higher than the forecasted one (48.9).
The current market forecast is 51.8.
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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 (42.2) was lower than projected (42.8). The high refinancing rate worsens the possibility of profitable capital investment, as long as the situation continues, the manufacturing sector will stagnate.
The current market forecast is 43.2.
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You can read more here.
EUR (Euro) / German Flash Services PMI - 10:30 PM
Preliminary index of business activity in the German services sector.
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 (53.3) was higher than the forecast (50.6).
The current market forecast is 53.5.
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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 (222K) was higher than forecast (219K). The labor market remains stable. For this reason, there is no particular increase in unemployment.
The current market forecast is 221 thousand.
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You can read more here.
USD (US Dollar) / Flash Manufacturing PMI - 16:45
The preliminary index of business activity in the US manufacturing sector.
S&P Global conducts a monthly survey among purchasing managers. Managers are asked to respond to questions related to current inventories in the company's warehouses, the number of new replenishment requests, new orders and their prices, as well as employment at the company, production utilization and current business conditions.
Flash - preliminary index, which is refined a week later in Finale (final) version. More often than not, the Finale version doesn't make much 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 (49.9) was below the forecast (52.0).
The current market forecast is 50.1.
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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, 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 (50.9) came in below the forecast (52.0).
The current market forecast is 51.5.
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More details can be found here.
Friday
USD (US Dollar) / Revised UoM Consumer Sentiment - 17:00
Revised (core) U.S. Consumer Sentiment.
TheUniversity of Michigan publishes Consumer Sentiment based on a survey of citizens answering questions about the current and future state of the economy. The main version is released 2 weeks after the release of 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 in an uptrend since November. The actual indicator (77.2) was below the forecast (77.9).
The current market forecast is 67.7.
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You can read more here.
Crypto
BTC/USDT
Monthly
https://www.tradingview.com/x/ZDHC6YTg/
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If the monthly bar closes in this position, then obviously we have a lot of factors for 80k, this month or next month.
Weekly
https://www.tradingview.com/x/YAf5gcPL/
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The format, in the form of an FTA test update, will give us a chance to catch another demand in this zone, for those still out of position.
Daily
https://www.tradingview.com/x/hr5GEd3C/
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The imbalance update, as part of the new week, will be the perfect catalyst to add a BTC position, for some, the perfect entry point to continue.
4Н
https://www.tradingview.com/x/wN8eKD7V/
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I'm more in favor of the second scenario, to me it seems like the most ideal start to a red week to take down as many liquidations as possible.
ETH/USDT
Monthly
https://www.tradingview.com/x/8WTW1YZ9/
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Not much to say here, I think it takes time.
Weekly
https://www.tradingview.com/x/tejsqPd3/
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Ether is showing strength, but it is still weak, so here I am more focused on waiting, let's see if the new week can close above 3290, but so far the mood is good.
Daily
https://www.tradingview.com/x/L4wNXo2j/
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We are still in a bad position, we are looking for an update of the low, but I think the price will hold this low and will be able to go to 3200.
ETH/BTC
Weekly
https://www.tradingview.com/x/vlapZiMP/
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Waiting phase
FX & Stock market
DXY
Weekly
https://www.tradingview.com/x/pluTzbGr/
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The correction has gone deeper than expected, but the long-term narrative is still upward. The index is now halted in the BPR zone, which acts as a zone of interest for longs. With unemployment data coming out on Thursday and a bank holiday in major European countries on Monday, we assume consolidation inside the BPR, with a possible manipulation of the Internal SSL and a reversal.
Daily
https://www.tradingview.com/x/LCw5XhHZ/
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On the daily timeframe we observe two MMXM formations, where the second one was formed inside the older one, in this case the younger one acts as a re-accumulation. Friday closed with a reaction to the downward FVG SIBI, which means that the initial movement will be downward to the Internal SSL, where we can expect a reversal towards 107.3.
EURUSD
Daily
https://www.tradingview.com/x/psdXVWbf/
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EURUSD unlike DXY removed the Internal BSL, which formed an SMT between them. At the moment the price is squeezed between the removed Internal BSL and FVG BISI. Since Monday is a bank holiday, and on Thursday German and French PMI data will be released, we assume consolidation between these two zones with the subsequent breakdown and inversion of FVG BISI (I-FVG).
Long-term targets are unchanged - External SSL 1.0450 and Internal SSL 1.0600.
GBPUSD
Daily
https://www.tradingview.com/x/YlHzL1e3/
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GBPUSD has also taken out the Internal BSL, but there is a shorting block area behind it. The Pound will have a busy week unlike the Euro, with BOE Gov Bailey on Tuesday, CPI y/y data on Wednesday, Flash PMI on Thursday and Retail Sales m/m on Friday. Thus we believe that the Pound will be more volatile and could form a withdrawal Friday with a test of OB and then reverse downwards on the back of the news. The key problem zone, after the passage of which we can definitely talk about the downward context is the level of 1.2635.
Targets remain unchanged - the zone of 1.2400.
SP500 / NQ100
Weekly
https://www.tradingview.com/x/JmnErocr/
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SP500 and NQ100 stock indices are updating ATH again, so it is difficult to analyze further. Of course, now we can assume a reaction to the ATH removal (External BSL), but the price can quietly continue its growth without correction. Taking into account DXY we assume a move to FVG BISI for both assets.
Daily
https://www.tradingview.com/x/vzkRoO08/
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On the daily timeframe we advise to pay attention to the nearest FVG BISI zone (marked in blue). It would be optimal to break through this zone, however, if it holds - the upward movement will continue.
H4
https://www.tradingview.com/x/xVFhQVmT/
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On the 4-hour timeframe we see that the price went under the ATH level (External BSL), but then got a reaction to the FVG zone, and was squeezed between two zones of interest, which potentially forms consolidation. Also worth noting is the SMT between the assets. NQ100 looks weaker. We assume a test of the ATH level (External BSL) followed by a downward movement.
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