Weekly Market Commentary | 31.07 – 6.08

Weekly Market Commentary | 31.07 – 6.08
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.
  • Manufacturing PMIs from China: Published at 49.3, showing a modest expansion in the manufacturing sector, surpassing the expected 48.9.
  • CPI Flash Estimate from the Eurozone: Expected at 5.3%. If accurate, this would be a decline from the previous 5.5%, indicating slightly subdued inflationary pressures.
  • Interest Rate Decision from Australia: A 25 basis points increase is anticipated, a move that could reflect the central bank's view on economic growth and inflation.
  • ISM Manufacturing PMIs from the US: A projection of 46.9 suggests observers are looking for insights into the health of the US manufacturing sector.
  • JOLTS Job Openings from the US: Expected to be 9.61 million, revealing the overall strength and trends of the US job market.
  • Employment Change from New Zealand: This will offer insights into job market dynamics in New Zealand.
  • Unemployment Rate from New Zealand: Forecasted to see a slight uptick from 3.4% to 3.5%.
  • ADP Non-Farm Employment Change from the US: An anticipated 195,000 change could set the tone for the main non-farm payroll data on Friday.
  • Inflation Data from Switzerland: A forecast of -0.1% might suggest deflationary tendencies within the Swiss economy.
  • Interest Rate Decision from the UK: Market expects a 25 basis points increment, raising the rate to 5.25% in response to evolving economic conditions.
  • Unemployment Claims from the US: This weekly figure will provide current updates on US job market health.
  • ISM Services PMIs from the US: Expected at 53, a figure that will provide insights into the US service sector's health.
  • Non-Farm Payrolls from the US: Anticipated at 200,000, this number has significant market influence and speaks to the health of the US job sector.
  • Unemployment Rate from the US: Expected to hold steady at 3.6%.
  • Job Data from Canada: The unemployment rate is projected to rise to 5.5%, reflecting potential changes in the Canadian job landscape.
Setups for This Week:
Primary View:
  • The price broke below the key horizontal support at $24.4 per ounce.
  • Following this break, the broken support has been tested as resistance and the price remains below, further validating this downward movement.
  • This behavior confirms a false breakout pattern, marked with a green color. While the price remains below the yellow resistance, the sentiment leans bearish.
Alternative Scenario:
  • Should the price climb back above the yellow resistance, it could serve as a bullish indicator and a signal to take a long position.
Primary View:
  • The price is currently finding support from a midterm uptrend line, connecting lows traced back to mid-October.
  • Remaining above this trend line keeps the sentiment on the bullish side.
  • On the daily chart, there appears to be an attempt to form a bullish engulfing pattern, which, if completed, would further reinforce this buy signal.
Alternative Scenario:
  • A break and daily close below the green uptrend line would be a bearish indicator and provide a clear signal to short.
Primary View:
  • The price is maneuvering within a wedge pattern, in the midst of an uptrend.
  • Most recently, by the end of the previous week, there was a bounce off both the lower boundary of the wedge and the horizontal support approximating 92.5.
  • This bounce resembles a V-shaped reversal, indicative of a robust response from the bulls, thereby providing a buy signal as long as we hold above the yellow support.
Alternative Scenario:
  • If the price ends the day below the yellow support, this would be a bearish signal and an indication to short the pair.
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