Weekly Market Commentary | 24.07 – 30.07

24 July 2023

Curious to know what’s happening on the markets this week? Take a quick tour of the latest news, economic updates, and trading setups that will keep you up-to-date and in the know.

Monday:

European manufacturing and services PMIs take center stage: France, Germany, Eurozone, and the UK are releasing their PMIs.
Interestingly enough, most manufacturing PMIs are expected to come below 50, while services PMIs are generally expected to surpass this mark.
The US is set to unveil its set of PMIs as well.

Tuesday:

German IFO Business Climate forecast at 88.
CB Consumer Confidence from the US anticipated to come in at 112.1.

Wednesday:

The Australian yearly inflation is predicted to decelerate to 5.5%.

The US Federal Reserve FOMC statement will be released, accompanied by the interest rate decision and subsequent press conference.
The market anticipates a 25-basis-point hike which would bring the rates to 5.5%.

Thursday:

European Central Bank decision day: a 25-basis-point increase is widely anticipated, which would place the rates at 4.25%.
ECB press conference will be the key event to watch for.
Quarterly US Advanced GDP is forecast to come in at 1.7%.

Friday:

The Bank of Japan rate decision will kick off the day, followed by the monetary policy statement and outlook report.
Preliminary inflation numbers from Germany expected to remain steady at 0.3%.
GDP figures from Canada anticipated at 0.3% growth.
A trio of data from the US: Core PCE Price Index forecast at 0.2%, Employment Cost Index expected at 1.1%, Revised University of Michigan Consumer Sentiment predicted to come in at 72.6.

Setups for This Week:

EURGBP
Primary View:

The price has formed a double bottom over the past two months, highlighted in blue.
As of the moment, the pair is testing the neckline of this pattern, indicated in yellow.
The price remains below the down-trend line depicted in red.
A break above the yellow resistance and the red down-trend line would activate the double bottom formation, suggesting an opportunity to buy.

Alternative View:

If the price bounces off the down-trend line and falls below the yellow area, it will signal a potential shorting opportunity.

Nasdaq
Primary View:

The index is in a solid up-trend, consistently respecting the long-term blue up-trend line.
The price remains above the critical horizontal support marked in green, at 15 250 points.
Maintaining the positions above these two key levels would indicate a bullish sentiment.

Alternative View:

A break below the blue up-trend line and the green horizontal support would offer a significant mid-term sell signal.

EURUSD
Primary View:

The price honored the correction equality pattern seen on the weekly timeframe.
Additionally, the price adhered to the 61.8% Fibonacci resistance.
Last week, there was a bounce off these twin resistances, opening up a potential medium-term selling opportunity.
The process of forming the third peak of a triple top pattern is underway. A decisive, long-term sell signal would appear should the red neckline break.

Alternative View:

If the price surpasses the 61.8% Fibonacci and closes a day above that level, it will provide a compelling buy signal.