Weekly Technical Analysis & Price Market Strategy- 13 August 2023
13 Aug 2023
Economic Impact Alert: U.K. GDP Data Sends Shockwaves Through GBP Markets.
The financial markets are set for a volatile week ahead, with a number of key events that could impact prices. On the economic front, investors will be closely watching the release of GDP data from the UK and the US, as well as retail sales figures from the US. Meanwhile, earnings season will also get underway, with a number of major companies reporting their results.
5 Key Events to Watch Out for in the Upcoming Week: Navigating the Financial Landscape
As we gear up for another week in the dynamic world of finance, it’s time to delve into the events that will be shaping the global markets. From economic indicators to corporate earnings and cryptocurrency movements, the coming days promise a flurry of activity that traders and investors need to be prepared for. In this article, we’ll break down five key events that are on the horizon and discuss their potential impacts on various assets. Let’s dive in and explore the exciting financial landscape together!
Unveiling the Economic Pulse: GDP (QoQ) U.K.
When: August 16, 2023
What It Influences: GBP and its subsequent pairs
Kicking off the week, all eyes will be on the Gross Domestic Product (GDP) announcement for the U.K. This crucial economic indicator measures the inflation-adjusted value of all goods and services produced within the country’s economy. Think of it as a health check for the nation’s economic activity. A stronger-than-expected reading can trigger a bullish sentiment for the GBP, while a weaker reading might turn the sentiment bearish. So, whether you’re a forex enthusiast or simply curious about the U.K.’s economic health, this event is worth watching.
Power of Consumer Spending: Retail Sales (MoM) (Jul), U.S.
When: August 15, 2023
What It Influences: USD and its subsequent pairs
The heartbeat of any economy lies in consumer spending, and the Retail Sales indicator gives us a glimpse into this vital aspect. Retail Sales measure the change in the aggregate value of sales at the retail level across the United States. With consumer spending contributing significantly to overall economic activity, this announcement can sway the fate of the USD and its related pairs. A robust Retail Sales figure could fuel a bullish USD trend, while a weaker figure might cast a bearish shadow.
Workforce Dynamics: Employment Change (Jul), AUD
When: August 16, 2023
What It Influences: AUD and its subsequent pairs
Jobs and income generation are cornerstones of consumer spending. The Employment Change report for Australia divulges the net change in the number of employed individuals. A stronger-than-predicted outcome could elevate the AUD’s prospects, while a below-forecast result might dampen its outlook. This announcement provides insights into the country’s economic health and the potential direction of the AUD.
Unveiling Japan’s Economic Pulse: GDP (QoQ) (Q2), JPY
When: August 14, 2023
What It Influences: JPY and its subsequent pairs
Japan’s Gross Domestic Product (GDP) announcement is a pivotal event that reflects the inflation-adjusted value of all goods and services produced within the economy. Often touted as the primary indicator of a nation’s economic well-being, GDP impacts the market sentiment for the JPY. A reading exceeding expectations can trigger a bullish wave, while a lower-than-anticipated figure might send bearish ripples through the JPY market.
Taming the Price Monster: Core CPI (MoM) (Jul), CAD
When: August 15, 2023
What It Influences: CAD and its subsequent pairs
The Core Consumer Price Index (CPI) is the yardstick for measuring changes in the prices of goods and services, excluding food and energy. This indicator carries immense importance for the Central Bank’s efforts to maintain price stability. A higher-than-forecast Core CPI can bolster the CAD’s standing, while a weaker-than-expected reading could cast a shadow of negativity. Keep your eyes peeled on this announcement if you’re invested in CAD or its related pairs.
Corporate Earnings in the Spotlight
Aside from economic indicators, corporate earnings also have a profound impact on market sentiment. As the upcoming week unfolds, several notable companies are scheduled to announce their quarterly results:
- Walmart Inc. (WMT): Earnings Per Share (EPS) estimated at 1.69 with revenue estimated at 159.897 billion USD. The results are set to be unveiled on August 17, 2023.
- Home Depot, Inc. (HD): Estimated EPS of 4.45 per share and revenue at 42.183 billion USD. Look out for their results on August 15, 2023.
- Cisco Systems, Inc. (CSCO): Keep an eye on their EPS of 1.06 per share and anticipated revenue of 15.05 billion USD, with results due on August 16, 2023.
- TJX Companies, Inc. (TJX): Anticipate an EPS of 0.76 per share and revenue of around 12.421 billion USD, with results set to be disclosed on August 16, 2023.
- Synopsys, Inc. (SNPS): On August 16, 2023, watch for an EPS of 2.74 per share and revenue estimated at 1.484 billion USD.
Navigating the Precious Metal Market
As we move into the precious metal realm, let’s take a look at the outlook for gold and silver:
Gold’s Path Ahead
Gold, often considered a safe haven, is currently trading within a down channel. With the Relative Strength Index (RSI) at 36.32, indicating the selling zone, and the Moving Average Convergence Divergence (MACD) in the negative zone, the market exhibits reduced volatility. While gold is trading below the 100-day moving average, it finds support above the 200-day moving average. The levels to watch include support at $1907.64 and resistance at $1942.04. For those brave enough to tread the gold path, a trade suggestion signals entry at 1891.08, take profit at 1856.68, and stop-loss at 1919.11.
The Silver Lining
Silver is also within a down channel, with an RSI of 35.67 denoting the selling zone. A negative crossover on the MACD adds a bearish hue, and Bollinger Bands indicate heightened market volatility. While the 50-day and 200-day moving averages slope downward, the 100-day moving average is in a sideways trend, signaling a period of consolidation. Support sits at $22.50 per ounce, and resistance at $23.34 per ounce. A trade suggestion proposes entry at 22.03, take profit at 20.74, and stop-loss at 23.13.
Riding the Oil Wave: Brent Crude Oil
Brent Crude Oil presents an upward trajectory within an up channel. The RSI at 64.88 is bullish, while a positive MACD crossover signifies the same sentiment. Bollinger Bands suggest reduced volatility. With both the 50-day and 200-day moving averages sloping upward, and the 100-day moving average following suit, the market trend is positive. Key levels to observe include support at 85.09 and resistance at 87.45. A potential trade move suggests entry at 88.85, take profit at 91.74, and stop-loss at 86.81.
As we venture into the ever-evolving realm of cryptocurrencies, let’s explore the trajectory of Bitcoin (BTCUSD) and Litecoin:
Bitcoin’s Roller Coaster
Bitcoin, trading within a down channel, exhibits an RSI of 46.93 in the bullish zone. A neutral MACD crossover suggests a balanced outlook, and Bollinger Bands indicate decreased market volatility. With both the 50-day and 200-day moving averages sloping downward, and the 100-day moving averages trending sideways, the market remains in consolidation. The support rests at 29153.81, while resistance looms at 29962.99. A trade idea proposes entry at 28743.64, take profit at 27801.30, and stop-loss at 29509.29.
Navigating Litecoin’s Path
Litecoin, like its counterpart, is within a down channel. The RSI at 39.27 hints at bearish territory, and a bearish MACD crossover reinforces the sentiment. Bollinger Bands suggest decreased market volatility. While the 50-day and 200-day moving averages slope upward, the 100-day moving average remains sideways, indicating consolidation. Key levels encompass support at 81.76 and resistance at 87.35. A trade proposition suggests entry at 79.14, take profit at 73.20, and stop-loss at 84.38.
Our journey wouldn’t be complete without a glimpse into the currency arena. Here, we explore the trajectories of EURUSD, GBPUSD, and AUDUSD:
EURUSD, within a down channel, boasts an RSI of 44.00 in the neutral zone. A negative MACD crossover signals bearishness, and Bollinger Bands suggest elevated market volatility. While both the 50-day and 200-day moving averages slope upward, the 100-day moving average remains sideways, indicating consolidation. Noteworthy levels include support at 1.0911 and resistance at 1.1010. A potential trade maneuver suggests entry at 1.0849, take profit at 1.0713, a stop at 1.0970.
GBPUSD follows a down channel, with an RSI of 43.21 in neutral territory. A negative MACD crossover reinforces bearish sentiment, and Bollinger Bands indicate significant market volatility. While both the 50-day and 200-day moving averages slope downward, the 100-day moving average remains sideways, signaling a period of consolidation. Key levels encompass support at 1.2602 and resistance at 1.2776. A trade proposition suggests entry at 1.2537, take profit at 1.2358, and a stop at 1.2667.
AUDUSD’s path mirrors a downside channel, with an RSI of 33.91 signaling bearish sentiment. A negative MACD crossover reinforces this outlook, and Bollinger Bands suggest heightened market volatility. The 50-day and 200-day moving averages both slope downward, as does the 100-day moving average, indicating a downtrend. Notable levels include support at 0.6457 and resistance at 0.6562. A trade move proposes entry at 0.6402, take profit at 0.6270, and a stop at 0.6500.
Unveiling Market Indices
Lastly, let’s explore the trajectories of Dow Jones and FTSE 100:
Dow Jones: Riding the Upward Tide
Dow Jones charts an upward journey within an up channel. With an RSI of 55.88 indicating bullish sentiment, a negative MACD crossover serves as a minor bearish signal. Bollinger Bands suggest reduced volatility. Both the 50-day and 200-day moving averages slope upward, as does the 100-day moving average, signaling an uptrend. Key levels encompass support at 35100.45 and resistance at 35433.77. A trade notion suggests entry at 35566.70, with a take profit at 35852 and a stop at 35368.30.
FTSE 100: Navigating the Downturn
FTSE 100 is entrenched within a down channel, with an RSI of 46.47 denoting bullish sentiment. A negative MACD crossover signals bearishness, and Bollinger Bands indicate heightened market volatility. While the 50-day and 200-day moving averages slope downward, the 100-day moving average remains sideways, hinting at consolidation. Key levels include support at 7504.0 and resistance at 7589.3. A trade proposition suggests entry at 7464.6, take profit at 7389.5, and a stop at 7517.1.
The Market Recap
As we bid adieu to the past week, a few significant events played their parts in shaping market sentiments:
Gold’s Retreat: Gold prices dipped below $1,920 as U.S. yields rose. The 10-year U.S. Treasury bond yield, perched above 4.1%, added to the challenge of maintaining gold’s stronghold. However, gold’s recovery attempts were buoyed by hopes that a modest uptick in the U.S. Consumer Price Index (CPI) for July might not lead the Federal Reserve to escalate interest rates further.
Oil’s Ascendancy: Oil prices witnessed an upswing, supported by the International Energy Agency’s projection of record global demand and tightening supplies. Brent crude and U.S. West Texas Intermediate (WTI) crude futures registered gains, marking the seventh consecutive week of positive momentum. With global oil demand at an all-time high and output cuts in play, the stage is set for reduced inventories and potential price surges.
Bitcoin’s Teetering: Bitcoin, the titan of the cryptocurrency realm, grappled with choppy waters. Despite sporadic rallies, the cryptocurrency struggled to sustain upward momentum, frequently reversing gains shortly after achieving milestones. As the market remained uncertain about Bitcoin’s direction, traders and enthusiasts continued to navigate the uncertain terrain.
As the coming week unfolds, these key events are poised to impact various financial assets. From economic indicators that gauge economic health to corporate earnings that reflect business performance, and from precious metals to cryptocurrencies and currencies, the financial landscape promises excitement, challenges, and opportunities. Keep a watchful eye on these events, stay informed, and make well-informed decisions as you navigate the dynamic world of finance. Remember, knowledge and preparation are your strongest allies in this ever-evolving arena.