Weekly plan - 05/27 - 05/31/2024

Macro

Next week sees the release of consumer confidence, German consumer inflation, US core personal consumption expenditures, US preliminary GDP and pending home sales.

We advise paying attention to events causing uncertainty in price movement:

Friday - Core PCE Price Index m/m.

Monday

USD (US Dollar) / Bank Holiday - All Day

Memorial Day.

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

Tuesday

USD (US Dollar) / CB Consumer Confidence - 17:00

Consumer Confidence Index.

The Conference Board releases an index based on a survey of about 3,000 households that asks them to rate current and future economic conditions, including labor availability, business conditions and the overall economic situation.

The indicator looks at how consumers are feeling 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.

The latest actual reading (97.0) was lower than the forecast (104.0).

The current market forecast is 96.1.

You can read more here.

Wednesday

EUR (Euro) / German Prelim CPI m/m - All Day

German Prelim CPI for the month.

DE Statis publishes an indicator based on the change in prices of goods and services purchased by consumers. It is one of the most important indicators in the calculation of inflation, as consumer prices account for a large part of overall inflation.

Germany's preliminary index of consumer price change is an early indication of price changes. On the day the information is released, data is collected throughout the country throughout the day. The actual consumer price index will be released two weeks later.

For a year now, central banks in most countries have been fighting inflation by raising refinancing rates. The decline in inflation suggests that the work is being done successfully.

The latest actual rate (0.5%) was lower than the forecast (0.6%).

The current market forecast is 0.2%.

You can read more here.

Thursday

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

Preliminary measure of quarterly GDP change.

The U.S. Bureau of Economic Analysis (BEA) releases GDP data based on the change in the value of all goods and services produced in the economy. According to the calculation methodology, the quarterly data is multiplied by 4 and we see the estimated change for the year.

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.

Since May, the economy has been actively growing. The latest actual figure (3.2%) was lower than the forecast (3.3%).

The current market forecast is 1.3%

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 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 (215K) was above the forecast (220K). The labor market remains stable. For this reason, there is no particular increase in unemployment.

The current market forecast is 218 thousand.

You can read more here.

USD (US Dollar) / Pending Home Sales m/m - 17:00

Change in the number of homes (secondary market) under contract for sale but still awaiting a closing transaction.

The National Association of Realtors publishes monthly data on the change in the number of secondary market homes for sale.

Real estate is the engine of the economy. The more bids find an end buyer, the more it affects the economy. The likelihood of starting renovations after buying a home is very high. Any repairs or changes are a waste of money on building materials, furniture, professionals and more. A loan is often taken out for renovations, which forces you to pay interest in the future and improve the bank.

You can read about the impact of real estate on the economy here.

The latest release of the index (3.4%) was higher than the forecast (0.3%).

The current market forecast is 0.1%.

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.

The Bureau of Economic Analysis (BEA) releases the Core Personal Consumption Expenditures Index 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.

While 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 rate (0.3%) was equal to the forecasted rate (0.3%).

The current market forecast is 0.2%.

You can read more here.
 

Crypto

BTC/USDT

Monthly

https://www.tradingview.com/x/HBEISA7z/

As we can see, the monthly candle close will be above the 0.5 range of the April candle, which means a new ATH and a chance to see BTC at 80,000 is just around the corner. What I want to see: a monthly close in that order and then a pullback or a rise without a pullback.

Weekly

https://www.tradingview.com/x/LKv4JeEX/

The weekly chart has a different situation. To get a rise to the high and 80.000 we need:
-to reach the high, we need to close the week above 69,000.00 as soon as possible
- To get to 80,000, we need to close the week above 73835.57. If that doesn't happen, we'll likely fall back to 65,000 and be in the doldrums.

Daily

https://www.tradingview.com/x/MUX1tnQ2/

Any variant is of interest here, exit from the current ones or correction through the drain to imbalance.
 

ETH/USDT
 

Monthly

https://www.tradingview.com/x/Xin1BjSS/

Ether gained strength in just a couple hours and we close the month with a takeover. Next target is 5000.

Weekly

https://www.tradingview.com/x/9nNRoMm6/

Pullback to 3690.36-3581.60 or we get a correction to a deeper area, 3290.23, but I don't believe in that and focus more on the first option.

Daily

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

There was an impulse exit through accumulation, as I pointed out in the last view now we are looking at a correction scenario through a deep imbalance test or exit through a local structure.
 

ETH/BTC
 

Weekly

https://www.tradingview.com/x/pGDf7rC8/

Swing was broken, now we wait for the explosion?

 

FX & Stock market
 

DXY

Daily

https://www.tradingview.com/x/SbyPll8j/

Last week we pointed out that the DXY value stopped in the BPR zone from the weekly timeframe, and indeed the DXY got an upward reaction to this zone, but it was not able to fully consolidate above the shorted FVG SIBI. Although the index has formed SMT discordance with EURUSD and GBPUSD, it is too early to confirm the upward movement, we should wait for the consolidation above the short FVG SIBI, which will lead us to the Internal BSL - 106.5. Otherwise, we can expect another move lower to the Gap - 103.4.
 

EURUSD
 

Daily

https://www.tradingview.com/x/EEdtu4mP/

Last week was able to break and invert the FVG BISI (I-FVG), but on Friday it hit the support level - 1.0810, and returned back to the I-FVG zone, so the upward OF is still active, and for its change we need to break the support level - 1.0810, which should lead to a test - 1.0720 and subsequent removal of the Internal SSL - 1.0600.

On the other hand, if the upward OF continues - it will disable SMT with DXY, and then the nearest reaction zone will be 1.0930. In general, the price is in consolidation and moving from border to border, both globally and locally.
 

GBPUSD
 

Daily

https://www.tradingview.com/x/G63ZpBV4/

GBPUSD did not show downward movement, however, it could not break through the short OB zone either. At the same time, on the background of excellent CPI data in the UK - showed a smooth growth, unlike EURUSD, which led us to SMT towards longs.

Overall we see inconsistencies in the correlation between DXY , EURUSD and GBPUSD, which tells us the market is in low probability condition in the coming days. It is quite difficult to form a narrative for the current week, we need to wait for the outcome of this situation.

If the upward OF continues - we are interested in the zone of 1.2800, if the price disables the SMT - look at the level of 1.2635, with the potential to move to 1.2500.
 

SP500
 

Daily

https://www.tradingview.com/x/xNxC4LHI/

The labor market data released on Thursday May 23rd made the SP500 NQ100 stock indices react in a downward direction. However, it is worth noting that the price did not consolidate below the FVG SIBI, the breakdown of which we expected. This could mean a potential continuation of the upward rally.

H4

https://www.tradingview.com/x/G6QAjv02/

From the 4-hour timeframe perspective, the SP500 index is in consolidation, having formed an SMT with NQ100 to the upside (due to good NVIDIA reporting). The development could go either way, we should wait to see how price reacts to the VI zone and whether the current SMT is justified.
 

NQ100
 

Daily

https://www.tradingview.com/x/4P9ULXLk/

H4

https://www.tradingview.com/x/mi0j6PF3/

Once again NVIDIA is pushing the NQ100 index to new highs once again with positive reports. This was formed by the SMT with the SP500 index, which tells us that there is potential weakness in other sectors compared to the technology sector. Moreover, the Dow Jones 30, the main industrial index, moved momentum downwards all last week, which only confirms the dominance of the technology sector, and AI in particular, among investors.

Presumably the rally will continue, we are watching the reaction to zone VI, if the index value fixes below - a downward movement is possible, where the target will be the SMT invalidation.