Tizhneviy plan - 07/22 - 07/26/2024

Macro

Next week sees the release of data on the state of the manufacturing and services sectors in France, Germany and the US. There will also be the US preliminary quarterly GDP data as well as the Core Personal Consumption Price Index.

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

Thursday - Advance GDP q/q.

Friday - Core PCE Price Index m/m.

Wednesday

EUR (Euro) / French Flash Manufacturing PMI - 10:15 a.m.

Advance French Flash Manufacturing PMI.

S&P Global conducts a monthly survey of 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, it makes no sense for them to load production capacity, invest in new facilities and hiring, and purchase 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 (45.3) was lower than the forecast (46.8).

The current market forecast is 45.7.

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 (48.8) turned out to be lower than the forecasted one (50.0).

The current market forecast is 49.7.

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 final version does not make any particular adjustments, so the focus is always on the preliminary (earliest) index.

Germany is the first economy in Europe and the third largest exporter of goods in the world. The country is a major center of mechanical engineering and chemical industry. Unlike France, which is the second country in terms of the number of nuclear power plants, Germany has turned towards green energy and is very dependent 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 (43.4) was lower than the forecast (46.4).

The current market forecast is 44.1.

You can read more here.

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

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 (53.5) was lower than the forecast (54.4).

The current market forecast is 53.3.

More details can be found 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 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 (51.7) was higher than the forecast (51.0).

The current market forecast is 51.6.

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 (55.1) was higher than the forecast (53.4).

The current market forecast is 54.5.

More details can be found here.

Thursday

USD (US Dollar) / Advance GDP q/q - 15:30

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

Advance Quarterly Change in US Real GDP.

The Bureau of Economic Analysis publishes an inflation-adjusted measure of the change in the value of all goods and services produced by the economy.

GDP is the most important indicator of economic development, so it is treated very carefully. A large number of economic and political decisions are made on the basis of the indicator.

A slight increase in consumer spending, a decrease in business spending on the purchase of equipment and investment in non-residential real estate has a positive impact on GDP growth.

The latest actual rate (1.6%) was below the forecast (2.5%).

The current market forecast is 1.9%.

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 (243K) was higher than forecast (229K). The labor market remains stable. For this reason, there is no particular increase in unemployment.

The current market forecast is 239 thousand.

You can read more here.

Friday

USD (US Dollar) / Core PCE Price Index m/m - 15:30

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

Change in the Core Personal Consumption Expenditures Index.

TheBureau of Economic Analysis (BEA) releases the Core Personal Consumption Expenditures Index (PCE) every month, about 30 days after the end of the previous month. The calculation takes the prices of consumer goods excluding energy and food (Core).

Energy and food prices are considered to be very volatile, so economists use the Core index for a more accurate measure.

Consumer spending prices account for most of the inflation as people are the main buyers of goods. This is a very important macroeconomic parameter and indicator, as it 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 great demand for goods - manufacturers make fewer orders, do not increase production capacity and thus do not increase prices at their level.

All of this should lower overall inflation and bring the system to a stable state. So far, the Fed has been doing well, but new problems keep popping up and the tools to influence the situation are unfortunately limited.

Inflation is measured by two main indicators - CPI (Consumer Price Index) and PCE (Personal Consumption Expenditure Index).

The CPI is considered to be the mass indicator, but it has a big problem - it is very slow to show changes and does not take dynamics into account so well.

In order to get around these limitations, the PCE index - a more sensitive index - was used.

What is the basis for the difference in indices?

1. The share of certain goods in consumption.

When the prices of certain goods rise, consumers may switch to other goods. CPI uses a rigid basket calculation of these goods and the specific weight of these goods in the basket. PCE tries to take into account the change in demand, due to which it better accounts for changes in prices and consumption.

1. What kind of prices are taken as settlement prices.

Whereas CPI looks at prices of goods consumed by consumers, PCE takes data on the prices at which goods are sold by the producer.

1. Price Coverage.

CPI takes into account only the prices of the products consumed. PCE takes into account the costs of insurance, health care, and so on (this is also an important component in people's lives).

1. Dynamics of variables calculation formulas.

Indexes use different formulas for calculation. CPI considers a certain set of goods, PCE tries to take into account the change in the demand of consumers (they replace expensive goods with cheaper ones).

The PCE index is very important, as the Fed mainly uses it for its calculations.

The latest actual figure (0.1%) was equal to the forecast (0.1%).

The current market forecast is 0.2%.

More details can be found here.

Crypto

BTC/USDT

Monthly

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

The month looks perfect. It remains to be closed in this way and the liquidity increase will go further.

Weekly

https://www.tradingview.com/x/P3yMPLLJ/

Fast growth never happens without correction, I think we will get a pullback this month or already next month, and correction marks should be 5-7%, only then we can think about trend continuation.

Daily

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

For long positions, the most important thing is to get a reaction from the key zones - I will consider them as a trigger to enter a position, but these positions will be extremely low risk. The most important thing has already happened, namely the price closing above 63800, daily strength is on our side, so any correction to the 64-62 range is a search for long positions.

We should also keep in mind that the gap is not always overlapped, because on the CME we still have it without a test.

https://www.tradingview.com/x/niT3NcSu/

Here the probability plays more on whether the price needs to make such a rough correction, but the important fact is that it will not affect the structure of our period.

4H

https://www.tradingview.com/x/Ph99Wsyk/

I don't believe in any POI that can hold our price, so the main trigger for a decline for me would be the destruction of the POI we are trading above and a move into the 62000 zone.

ETH/USDT

Monthly

https://www.tradingview.com/x/vqytxh4U/

The same analogy is the month closing above 3502. The rest is pending.

Weekly

https://www.tradingview.com/x/BNes6G9V/

The first plan is to close the week above 3518.85, only then think about a correction if there is no close, in any case we absorbed the July decline, which may help in regaining market strength.

Daily

https://www.tradingview.com/x/ndSpRni8/

Two plans on which will consider implementation, I am more in favor of 1 scenario. After the imba overlap, the main thing is for BTC to get a correction and destroy the POI, after that all longs will start their realization.

4H

https://www.tradingview.com/x/AyxLH2C1/

Of course uncompression will be the best event, everything that will not be realized, except the stage with the test of 3346 - I will skip, for futures positions.

ETH/BTC

Weekly

https://www.tradingview.com/x/RG4ve1xV/

Any deep correction into this POI range - should alta also be bought back, if the test of this area will be closed with a high wick - it is a sign of strength in the market, for as soon as possible market realization.

FX & Stock market

DXY

Weekly

https://www.tradingview.com/x/BFMzxh9D/

Last week the DXY index removed the Internal SSL at 103.8 and had a good upward reaction with a consolidation above this level. From the technical analysis point of view, we assume an upward movement to the FVG SIBI zones, which is also supported by the PCE forecasts on Friday.

Daily

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

From the point of view of the daily timeframe we observe the formation of absorption (OB) on the removal of Internal SSL (103.8), based on which we assume its subsequent test and continuation of the upward movement to the upper FVG SIBI (105.3). Invalidation of the idea in this case is the breakdown of 50% of the OB body, and the reverse consolidation of the value below 103.8. In this case, the index value will move to the zones of 103.4, 102.8.

H4

https://www.tradingview.com/x/7j44MMcQ/

On the 4-hour timeframe we observe Internal BSL under the zone of weekly FVG SIBI, upon removal of which we expect a return to the OB zone, with the potential to test the TTS level, from where we should consider further upward movement to the zone of the upper weekly FVG SIBI, under which there is also compression liquidity. Presumably, the index will form compressions in the first 2-3 days for further impulse on the background of GDP and PCE data release.

EURUSD

Weekly

https://www.tradingview.com/x/hoG5Xy2y/

Considering the weekly timeframe of EURUSD, we can note that the price took off the maximum of the last month (June), but failed to break it, and formed a sweep + pinbar. This formation from the point of view of technical analysis tells us about a potential reversal to the downside to the zones marked on the chart - FVG BISI, GAP (BPR) and VI.

The German and French PMI forecasts are positive enough for EURUSD upward movement, but if we look at the data in a cross-section, we can see that in general both manufacturing indicators for the whole 2024 year are kept at the same level of 42-45, which tells us about some stagnation, for this reason the price will be more influenced by the GBP and PCE data of the USA, which are expected to lead EURUSD to decline.

Daily

https://www.tradingview.com/x/ivelE4hM/

In terms of the daily timeframe, we also see a takeover in the form of OB, after taking out the June high with a test of the upper boundary of the local consolidation (in this case we revised the upper level to 1.09324). Friday has already tested the OB, so we assume a downward movement with a test of FVG BISI, then a return to the OB, which will form liquidity for further downward momentum on Thurs-Fri to the GAP (BPR) or VI zone.

H4

https://www.tradingview.com/x/zvMXTy7o/

On the 4-hour timeframe we are interested in the Inversion FVG in the context of the daily OB, from where the beginning of the downtrend will be considered. It is worth noting that the current formation is very similar to the MMSM pattern, where last week's SMR was formed. Taking into account being in global and local consolidations, frequent change of trends is quite probable. This situation may continue until September-November, where it is possible that for the first time the Fed will lower the rate ahead of the elections.

GBPUSD

Weekly

https://www.tradingview.com/x/h2zjkzi1/

GBPUSD on the weekly timeframe removed the Internal BSL at the round price mark - 1.3000, where it failed to consolidate above. This situation tells us about a possible correction to the upper boundary of the local consolidation with the closing of one or two marked FVG BISI.

Daily

https://www.tradingview.com/x/Bfc3RvRJ/

In terms of the daily timeframe, an engulfment (OB) with a small FVG SIBI has been formed. We will consider this zone as the starting point of the downward movement to the overlap of FVG BISI zones, and the formation of the high of the week.

H4

https://www.tradingview.com/x/gHKB3g01/

On the 4-hour timeframe we observe Shift, where at the moment the price is near the zone of the first weekly FVG BISI. We assume a test of this FVG BISI, with further movement to the OB + FVG SIBI zone, from where the price will continue the downward trend to the lower FVG SIBI zone with compression liquidity.

We can also perceive this chart as MMSM, where last week formed SMR, and the current week will make Re-Dist in the context of OB + FVG SIBI test, where it will continue to move the price down to the Original Consolidation withdrawal.

SP500 / NQ100

Previous Week

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

First of all, we would like to note the quality of last week's plan, where we pointed to a medium-term reversal in both indices. On SP500 we advised to work from Friday's high with the target of 5588, and on NQ100 we advised to work from FVG + Breaker in conjunction with SMT. Both situations worked well and we saw an impulsive downward movement throughout the week.

Weekly

https://www.tradingview.com/x/8nCBtiU2/

As expected from the 05.07.2024 plan, the uptrend in the SP500 and NQ100 indices stopped at the levels of 5670 and 20850 respectively. At the moment the indices have entered the correction phase, where last week formed an absorption pattern (OB) on both indices. We assume continuation of the downward correction with the main target of Internal SSL removal - 5270 (SP500) and 18500 (NQ100).

Daily

https://www.tradingview.com/x/H47sh5wG/

From the daily timeframe perspective, SP500 index is in the FVG BISI zone and has formed an SMT with NQ100 to the upside. NQ100 at the same time has taken out Internal SSL with a test of FVG BISI.

SP500: Assume upward movement early in the week to the TTS and OB zone (5600-5620) and then reversal and move to the downside to reach the main target of 5270.

NQ100: Assume upward movement early in the week to the TTS + BPR zone (20200-20400), and then reversal and transition to the downside to reach the main target of 18500.