He’s reiterating what we already have come to know in recent weeks. They’ve been teeing up a rate cut in September and this just contributes to that narrative. We’ll see if Powell will be more explicit during his appearance at Jackson Hole later this week.
This article was written by Justin Low at www.forexlive.com.
The S&P 500 finally erased the entire drop from the last ISM Manufacturing PMI as the market faded the
“growth scare”. The first catalyst was the good US Jobless Claims on the 8th of
August as that quelled the fears on a deteriorating labour market triggered by
the weak NFP report.
Last week, we got even better Jobless Claims figures and a great Retail Sales report which increased
the bullish momentum. The market’s focus is now clearly on growth. This week,
we will have two key events.
The first will be on Thursday as we will get the release of the US Flash
PMIs for August and that will be kind of a test for the thesis that the July
data was negatively affected by Hurricane Beryl. The second one will be Fed
Chair Powell’s speech at the Jackson Hole Symposium where he will likely
pre-commit to a rate cut in September.
S&P 500
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the S&P 500 reached the key 5600 level where the growth scare
began. This is where we can expect the sellers to step in with a defined risk
above the level to position for a drop back into the 5200 level. The buyers, on
the other hand, will want to see the price breaking higher to increase the
bullish bets into a new all-time high.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we have a key support zone around the 5440 level where we can find
the confluence
of the 38.2% Fibonacci
retracement level and the upward trendline.
If we were to get a bigger pullback, the buyers will likely step in around that
zone to position for a rally into new highs with a better risk to reward setup.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 5200 level.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a minor upward trendline defining the current bullish momentum.
The buyers leant on this trendline on several occasions as they kept on
targeting new highs. We can expect them to keep doing so, but if the price were
to break lower and fall below the last higher low at 5535, the bearish momentum
might increase as the sellers will pile in more aggressively for a drop into
the 5440 support. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have Fed’s Waller speaking. On Thursday we get the US Jobless Claims
figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking
at the Jackson Hole Symposium.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
The thing about this week is that there won’t be as much key risk events on the calendar as last week. And that means market players will not have too much to work with for the time being. Fedspeak is the main thing to be mindful about, as traders digest the key US data from last week. And also considering that we have the Jackson Hole symposium coming up.
There is the FOMC meeting minutes on Wednesday. But in terms of the economic calendar, we’ll have to wait until Thursday for PMI data and also the US weekly jobless claims. So, traders might be left in a bit of a state of flux in the sessions ahead.
For today, the Japanese yen is a standout mover though as the Nikkei fell by 1.8%. USD/JPY dropped to a low of 145.18 earlier but is now trading roughly 100 pips above that again.
The pair is moving back to its recent consolidation range after the break back above 145.00 earlier this month. And the fall in bond yields is also weighing, as noted here.
As for the risk mood today, traders and investors are not finding much conviction. European indices are lightly changed with marginal gains at best. Meanwhile, US futures are still flat and not observing much movement since Asia trading earlier.
This article was written by Justin Low at www.forexlive.com.
The Nasdaq finally erased the entire drop from the last ISM
Manufacturing PMI as the market faded the “growth scare”. The first catalyst
was the good US
Jobless Claims on the 8th of August as that quelled the fears on
a deteriorating labour market triggered by the weak NFP
report.
Last week, we got even better Jobless
Claims figures and a great Retail
Sales report which increased the bullish momentum. The market’s focus is
now clearly on growth. This week, we will have two key events.
The first will be on Thursday as we will get the release of the US Flash
PMIs for August and that will be kind of a test for the thesis that the July
data was negatively affected by Hurricane Beryl. The second one will be Fed
Chair Powell’s speech at the Jackson Hole Symposium where he will likely
pre-commit to a rate cut in September.
Nasdaq
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the Nasdaq broke above the key trendline and extended the gains into the key
19712 level. This is where we can expect the sellers to step in with a defined
risk above the level to position for a drop into the major trendline around the
18000 level. The buyers, on the other hand, will want to see the price breaking
higher to increase the bullish bets into new highs.
Nasdaq Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that we an upward trendline defining the current bullish momentum. If we
were to get a bigger pullback, the buyers will likely lean on the trendline
where they will also find the 38.2% Fibonacci
retracement level for confluence.
The sellers, on the other hand, will want to see the price breaking lower to
increase the bearish bets into the 18000 level.
Nasdaq Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we have a steeper minor upward trendline that’s been acting as support
for the buyers as they kept on leaning on it to push into higher highs. This is
where we will likely see them stepping in again with a defined risk below the
last higher low at 19445 to position for a break above the key resistance.
The sellers, on the other
hand, will want to see the price breaking below the trendline and the 19445
level to increase the bearish bets into the other trendline around the 19000
level. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have Fed’s Waller speaking. On Thursday we get the US Jobless Claims
figures and the US PMIs. On Friday we conclude with Fed Chair Powell speaking
at the Jackson Hole Symposium.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
PBoC LPR (Tue):
PBoC will announce China’s benchmark Loan Prime Rates next week which are likely to be maintained with the 1-year and 5-year LPRs currently at 3.35% and 3.85%, respectively. The likelihood for no adjustments in the LPRs which are the reference for most new loans and mortgages follows the bout of reductions conducted in July in which the central bank had initially opted to maintain the 1-year MLF rate at 2.50% at its regular mid-monthly operation in July but then surprised markets with unexpected cuts to its short-term funding rates a week later including the 7-day reverse repo rate which was lowered by 10bps to 1.70% from the 1.80%, while Chinese banks then followed through with similar magnitude cuts to the benchmark 1-year and 5-year Loan Prime Rates. The PBoC also lowered its Standing Lending Facility rates by 10bps across all maturities and unexpectedly conducted a second MLF operation for the month on July 25th in which it cut the 1-year MLF rate by 20bps to 2.30%. Therefore, given the recent bout of cuts to funding rates, it is unlikely that the central will be in a rush to adjust rates so soon, while mixed data releases from China also support a patient approach. As a reminder, it was announced last month that China will change the timing of the release of the monthly LPR fixing to 09:00 local time (02:00BST/21:00EDT) which is 15 minutes earlier than the previous scheduled time.
RBA Minutes (Tue):
RBA will release the minutes from its August 5th-6th meeting which participants will be eyeing for any clues on policy and further insight into the central bank’s thinking. As a reminder, the central bank provided no major surprises at the meeting as it kept the Cash Rate unchanged at 4.35% as forecast by 32 out of 33 economists surveyed by Reuters, while it also stuck to its hawkish tone in which it reiterated that the Board remains resolute in its determination to return inflation to the target and is not ruling anything in or out, as well as reiterated that inflation remains above target and is proving persistent. Furthermore, the central bank said policy will need to be sufficiently restrictive until the board is confident that inflation is moving sustainably towards the target range, while it raised its view for GDP, CPI and the Unemployment Rate with its forecasts assuming the cash rate will be 4.3% in December 2024, 3.6% in December 2025, and 3.3% in December 2026. RBA Governor Bullock stuck to a hawkish tone at the post-meeting press conference in which she noted that the board considered a rate increase and that a cut is not on the near-term agenda, while she also stated that they are ready to raise rates if needed and that the pricing of cuts for the next six months does not align with the board.
Riksbank (Tue):
June’s meeting opened the door to as many as three cuts in H2-2024 (prev. guided two), the first of which is likely to be delivered at the August meeting. Within the June minutes, Deputy Breman specifically nodded to August stating she sees “the next cut probably being in August”, while Jansson and Seim were even more dovish as they considered cutting at the June gathering. Since, June’s inflation data came in cooler-than-expected by the market for both headline and core CPIF, while the July print was slightly hotter than forecast by the market but in-line with the Riksbank’s view for the CPIF ex-energy figure at 2.2% Y/Y. Given the in-line CPIF development and dovish starting point from June’s MPR/Minutes, the policy rate is likely to be cut in August by 25bps and while a larger move cannot be entirely dismissed, it is on balance unlikely at this point, particularly as the SEK has weakened somewhat since the last meeting (in the presser Theeden described it as being undervalued). Nonetheless, the statement and press conference in August will be closely scrutinised for any fresh dovish tweak to forward guidance.
CBRT Announcement (Tue):
The CBRT is expected to maintain its Weekly Report Rate at 50% at the August meeting, according to all 17 respondents polled by Reuters – with the central bank in a “wait and see” mode. Economists expect the CBRT to start cutting rates this year as inflation is forecast to ease. Amongst 14 economists polled by Reuters, the median estimate sees the One-Week Repo Rate at 45% at year-end, with forecasts ranging from 40-50%. The latest CBRT Survey showed that the Repo Rate is seen at 33.3% in 12 months (prev. 34.57%), end-2024 USD/TRY seen at 37.2760 (prev. 37.3667), 2024 GDP seen at 3.4% (prev. 3.4%), CPI seen at 28.71% (prev. 30.02%). Analysts at Morgan Stanley expect the Weekly Repo Rate to be maintained for the rest of the year amid an increase in geopolitical risks and global market volatility prompting rates to be held higher for longer.
Canadian CPI (Tue):
Minutes from the BoC’s recent meeting stated that officials would be weighing the forces that could pull inflation below its target vs those that could hold it above target. Some felt that wage growth at current levels could lead to persistent price pressures for many services, and price pressures in services more closely impacted by wages were unlikely to be offset to the same extent as in past months by disinflation in goods or price cuts. Others placed less emphasis on risks that wage growth could contribute to price pressures. The GC generally saw less chance that any pent-up demand could result in a sudden rise in house prices as rates were being cut. At that policy meeting, the BoC left its end-2024 CPI view unchanged at 2.6% Y/Y (vs 2.7% Y/Y in the June data) but raised its 2025 CPI view to 2.4% Y/Y (vs its previous forecast for 2.2%). BoC Governor Macklem said the central bank did not want to weaken the economy too much and have inflation go below its 2% target; „we need to increasingly guard against the risk that inflation falls too far. We want inflation to come down, but we want it to come down sustainably,“ he said. The Governor also stated that „if inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in the policy interest rate; the timing will depend on how we see these opposing forces playing out.“
FOMC Minutes (Wed):
Minutes from the July 31st FOMC meeting, due to be released on Wednesday, could be overshadowed by the Jackson Hole Economic Symposium, due to begin on Thursday (see below for our preview). At the July meeting, the FOMC left rates unchanged at between 5.25-5.50%, but it made tweaks to its statement that appear to leave the door open to a rate cut in September. The Committee is now attentive to risks on both sides of its mandate, a change from the June statement, where it said it was ‚highly attentive‘ to inflation risks. The statement said there has been ’some further progress‘ towards its inflation goal, whereas in June it said there had been ‚modest‘ progress. And it now says that risks to achieving its employment and inflation goals continue to move into better balance, whereas in June it said it was moving ‚towards‘ better balance. The Fed did however reiterate that it does not expect that it will be appropriate to lower rates until it has gained greater confidence that inflation is moving sustainably towards target, suggesting that the Committee still wants to see favourable data before pivoting to rate cuts. At his post-meeting press conference, Chair Powell revealed that there was a real discussion about the case for reducing rates at this meeting; a strong majority supported not moving (he later said that „overwhelmingly“ policymakers felt it was not the time yet). The Fed Chair noted that the policy rate is clearly restrictive, and it is coming to the point where it will be appropriate to start rate cuts and dial back restrictions in order to support the continued progress of the economy. He added that the Fed does not need to be 100% focussed on inflation given upside risks to prices have decreased while downside risks to employment mandate are real now, noting that the chances of a hard landing are low as the economy was neither overheating or sharply weakening. Powell said the Fed is balancing the risk of going too soon against going too late, and has a very difficult judgement call on rates. When asked about the prospects of a 50bps rate cut (two 25bps moves rolled into one), Powell said it was not something the Fed was thinking about right now. A theme throughout Powell’s Q&A was that he tied any future move on the incoming data. Powell said that the Q2 inflation had added to the Fed’s confidence on inflation; on the labour market, Powell said does not think the labour market is currently a source of inflation pressures, and that is why Fed does not want to see excess cooling in the labour market. Powell was coy on giving any specific nod to rate cuts, noting that it could reduce rates zero times this year, or even several – it all depended on incoming data. The Fed’s focus is now shifting more towards its dual mandate, rather than just the inflation side of the equation; while policy was positioned to deal with dual mandate risks, the Fed is attentive to risks on both sides of the mandate.
Jackson Hole Economic Symposium (22-24 Aug):
The gathering of central bankers, academics and policymakers is often looked to for policy steer. Attention will be on remarks due from Fed Chair Powell, who will deliver remarks on the economic outlook on Friday, August 23rd, where traders will look for any updated assessments on the state of the US economy, and the trajectory of monpol. Powell last month said that if inflation and the labour market continued to cool, a rate cut may be appropriate at the September 18th FOMC meeting. For that meeting, money markets are currently pricing around 32bps of rate cuts (which essentially says a 25bps rate reduction is fully expected, with some incremental probability the Fed could go for a larger 50bps cut). The dovish pricing has pared back in recent weeks as inflation continues to cool, and the labour market continues to look resilient amid its slowdown (at one point, markets were fully expecting a 50bps rate reduction a couple of weeks ago, when growth jitters stoked concerns the Fed may be behind the curve). Bank of America says there is a chance Powell could opt for a straightforward update, taking a similar line to which he did in his post-meeting press conference in July; a shift in language from that July language could suggest the committee is nearing, or is close to, considering easing measures, BofA said. „A further signal could be if Powell is stronger in saying that the committee wants to avoid ‚unexpected weakness‘ in the labour market, rather than simply responding to it after it occurs,“ it wrote. Powell might refer to the June Summary of Economic Projections, which indicated a gradual removal of policy accommodation due to economic uncertainty. „The Fed’s definition of achieving a soft landing is bringing inflation back to target without requiring a deterioration in labour market conditions,” BofA wrote, „the battle on inflation isn’t entirely won, but the message could be that it’s been won enough where the emphasis now will be on preventing undesired weakness in the labour market.“ Powell will also likely be asked about the size of the rate cut, and traders will be watching to see if he leans back on calls for the larger cut (when he was asked about this in July, Powell said it was not something the Fed was thinking about right now).
ECB Minutes (Thu):
As expected, the ECB opted to stand pat on rates following the 25bps reduction in June. In the accompanying policy statement, the Governing Council reaffirmed that it will keep policy rates sufficiently restrictive for as long as necessary to achieve its goals. Furthermore, policymakers will continue to maintain a data dependent approach and not pre-commit to a specific policy path. At the follow-up press conference, President Lagarde noted that the discussion on the Governing Council was very much a case of “on the one hand” and “on the other hand”, with the ultimate policy decision being a unanimous one. Lagarde was also keen to stress that the ECB is data dependent but not specific data point dependent. Regarding the path ahead, Lagarde kept her cards close to her chest, suggesting that the September meeting is “wide open”. Given how neutral the meeting was and the amount of data due between July and September, it is unlikely that the account will offer much in the way of guidance over what to expect next month. Instead, traders will be minded to watch EZ data points and how these metrics are viewed by members on the Governing Council.
BoK Announcement (Thu):
BoK will conduct a policy meeting next week where it will likely maintain the base rate at the current level of 3.50% following recent mixed data releases. As a reminder, the BoK kept its base rate unchanged at 3.50% at the last meeting in July which was as expected and made through a unanimous decision. BoK said it will maintain a restrictive policy stance for a sufficient period of time and will examine the timing of a rate cut, while it dropped the phrase that ‚upside risks to inflation forecasts have increased‘ in its policy statement and instead said inflation could be slower than forecast. BoK Governor Rhee also commented that they need to assess how a rate cut would affect financial stability which could adversely be impacted by a cut and suggested it is „time to prepare pivot rate cuts“. Furthermore, he noted that two board members said they could consider a rate cut within the next three months, although Rhee added that market expectations for policy rate cuts are a little excessive. The rhetoric from the central bank suggests that the option of a cut is clearly on the table although it doesn’t seem that there is enough support yet amongst the seven-member monetary policy board for it to materialise, while mixed data releases from South Korea also support the case for a pause as CPI YY was firmer than expected at 2.6% vs. Exp. 2.5% (Prev. 2.4%) and GDP disappointed in Q2 with a surprise Q/Q contraction at -0.2% vs. Exp. 0.1% (Prev. 1.3%) and Y/Y growth at 2.3% vs. Exp. 2.5% (Prev. 3.3%), although recent Unemployment data showed a decline in the jobless rate in July to a 9-month low of 2.5% (Prev. 2.8%).
EZ Flash PMI (Thu):
Expectations are for the Eurozone flash August manufacturing PMI to tick higher to 46.0 from 45.8, services to increase from 51.9 to 52.1, leaving the composite at 50.5 vs. prev. 50.2. As a reminder, the prior release saw the manufacturing print hold steady at 45.8, services decline to 51.9 from 52.8, leaving the composite at 50.2 vs. prev. 50.9. The accompanying report noted “the eurozone’s economy is growing at a snail’s pace in July. Sector-wise, services is not picking up speed like it did earlier in the year, while the industrial slump has continued unabated”. This time around, Investec suggests that there may be a slight recovery in momentum, however, the global trend in manufacturing still looks “unconvincing”. On a national level, focus remains on the poor run of German data with ZEW metrics for August setting markets up for another potentially soft print, whilst focus for France will be on the impact from the July Olympics after a few months of political turmoil. From a policy perspective, the release may cause some short-term movement in ECB pricing (September cut priced at 90% with a total of 72bps of easing seen by year-end). However, expectations for next month’s meeting are more likely to be impacted by inflation and the wage outlook, on which the latest batch of EZ negotiated wage data will be available on the same day. As a reminder, the Q1 release printed at 4.69% vs. prev. 4.45%. However, the ECB put out a blog alongside the release stating that “negotiated wage growth reflects multi-year adjustments and wage pressures look set to decelerate in 2024”.
UK Flash PMI (Thu):
Expectations are for the flash services print to hold steady at 52.5, manufacturing to pull back to 52.0 from 52.1, leaving the composite unchanged at 52.8. As a reminder, the prior release saw the services metric rise to 52.5 from 52.1, manufacturing increase to 52.1 from 50.9, leaving the composite at 52.8 vs. prev. 52.3. The accompanying report noted “July’s accelerated expansion in sales activity crucially suggests business and consumer confidence has improved, and albeit only one month into the second half of 2024, the latest survey results bode well for a reasonable GDP growth print in Q3.” This time around, analysts at Investec are looking for a “slight moderation” in the composite PMI on the assumption that some of the post-election boost begins to fade. For the manufacturing sector, the desk questions whether “the 1.2pt jump last month overstated the underlying picture”, adding that the “report did note that the strong number in part reflected the completion of order backlogs”. That being said, Investec notes that its “forecasts are consistent with activity in both sectors continuing to expand, reflecting the healthier economic backdrop in the UK”. From a policy perspective, the release is unlikely to have any durable impact on BoE pricing (September cut priced at just 36% with a total of 41bps of easing seen by year-end) with members of the MPC primarily focused on services inflation and real wage growth.
New Zealand Retail Sales (Thu):
There are currently no market expectations for the New Zealand Retail Sales for Q2 in which the headline Q/Q was previously 0.5%, although the core is expected to tick higher to 0.5% from 0.4%. Desks highlight that retail sector conditions have remained weak, whilst nominal spending levels have been somewhat flat for a year, and the volume of take-home goods from households has been ebbing lower. Analysts at Westpac forecast the headline Q/Q metrics at -2.2% alongside “a sharp 1.9% fall in nominal spending in the June quarter and a similar sized fall in the volume of goods sold”. The desk cites a sharp decline in nominal monthly spending levels.
Japanese CPI (Fri):
Core CPI is expected to tick higher to 2.7% from 2.6%. The data will be keenly watched by market participants as the BoJ looks to hike rates at a time when other G10 central banks are on a reduction course. Desks suggest that the government’s energy subsidies likely lead to a hotter headline inflation figure, although price hikes in food and services costs decelerated. Nonetheless, headline inflation is expected to come above the BoJ’s 2% target, with officials closely watching the trend of inflation. Analysts at ING point to the reacceleration data seen in Tokyo inflation figures recently and posit that nationwide inflation also likely reaccelerated in July. Note, Japan’s parliament is to hold a special session at the Lower House committee on August 23rd to discuss the BoJ rate hike, while the special session is likely to ask BoJ Governor Ueda to attend, according to sources cited by Reuters.
This article originally appeared on Newsquawk.
This article was written by Newsquawk Analysis at www.forexlive.com.
Tuesday
The PBoC is
expected to keep the 1-year and 5-year LPR rates unchanged at 3.35% and 3.85%
respectively. Such expectations are mainly due to the fact that the central
bank delivered substantial rate cuts across the board last month and will likely refrain from adjusting
interest rates again so soon.
The Canadian CPI
Y/Y is expected at 2.5% vs. 2.7% prior, while the M/M figure is seen at 0.4%
vs. -0.1% prior. The central bank focuses on the underlying inflation measures
(mainly Trimmed Mean CPI). The Trimmed-Mean CPI Y/Y is expected at 2.8% vs.
2.9% prior. The market is assigning a 98% probability of a 25 bps cut in
September and a total of 73 bps of easing by year-end.
Thursday
Thursday will be
the Flash PMIs Day for many major economies with the Eurozone, UK and US PMIs
being the main highlights:
The US Jobless
Claims continue to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.
Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
have been on a sustained rise showing that layoffs are not accelerating and
remain at low levels while hiring is more subdued.
This week Initial
Claims are expected at 230K vs. 227K prior, while there’s no consensus for Continuing
Claims at the time of writing although last week we saw a pullback to 1864K vs. 1871K prior.
Friday
The Japanese Core
CPI Y/Y is expected at 2.7% vs. 2.6% prior. As a reminder, the BoJ surprised
with a 15 bps hike (even though we got a leak the day earlier) at the
latest policy decision and that triggered a mess in the Japanese markets with
the Yen surging and the Nikkei falling like a rock, especially after BoJ’s Ueda comment on not seeing 0.50% as a policy ceiling.
Since then, we got
comments from Japanese officials cautioning on further rate hikes given the
turmoil in financial markets. The expectations are now for a rate hike in March
2025.
The main event of
the week will be Fed Chair Powell speaking at the Jackson Hole Symposium at 10:00
am ET. The Jackson Hole Symposium is famous for major policy communications
from the Fed.
In August 2020
Powell announced a change in the Fed’s inflation strategy called AIT (Average
Inflation Targeting) which was meant to allow inflation to move above and below
the target rate of 2% so that it averaged out to 2% over time.
I expect Powell to
finally pre-commit to a rate cut in September saying something like “the
time to ease policy has come”. Although the market has already fully priced in
at least three cuts by the end of the year, it would still be a major event
which should reverberate in the market’s sentiment.
He will also be
asked about the size of the rate cut as there are still small chances of a 50
bps cut in September (28%). He will likely dodge the question but if he were to
leave the door open for a larger cut, it will be seen as a dovish “surprise”.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
The Solana (SOL) cryptocurrency has been one of the most talked-about assets in the crypto space, known for its high-performance blockchain and a surge in market value in recent years.
As someone who has actively traded Solana since its early days, I’ve observed firsthand how quickly market sentiment can shift in the crypto space. I recall the dramatic rise of SOL in 2021, when it surged from under $1 to over $200 within a year, driven by widespread adoption of its high-performance blockchain for decentralized applications. Even this year, when SOL crossed up a 66 day long high of a key price level of apx $127, it then flw up another %67 in only 17 days. This experience has shown me that understanding key resistance and support levels, such as those outlined in this analysis, is crucial for navigating the volatility inherent in the crypto market.
Current price analysis 📊 with 2 sides of the coin
As of the latest data on the chart, Solana (SOL) is trading around the $141 mark. The chart highlights a period of consolidation, where SOL has been trading within a relatively narrow range, indicating that the market is at a critical juncture. The price has found resistance around the $175 level and support near the $125 level.
Bullish scenario: A path to a new all time high 🚀… But wait for this condition…
For the bulls to take control and push SOL’s price higher, the chart indicates a key resistance level at $175. According to the analysis, a sustained break above $175 is recommended to be confirmed by two consecutive weekly candle closes above this level. This could trigger a bullish breakout, leading to a potential surge in price.
In a recent post on X, Solana Labs co-founder Anatoly Yakovenko pointed out that, for many users, the fees associated with using the Ethereum network are higher than the cost of operating a Solana node. This comparison underscores the growing debate over network efficiency and cost-effectiveness between leading blockchain platforms, which helps the bullish case.
But, in any case, in terms of price action for SOLUSD, to further understand the significance of the $175 resistance level, it’s important to delve into the use of anchored VWAP bands which offers a nuanced perspective by combining volume and price over a specific period, helping traders pinpoint areas where institutional players might have entered or exited positions. I show a thorough yet simple technical analysis of this in my following video
SOL Price Prediction video
Bearish Scenario: Downside risks and support levels ⚠️
On the flip side, the bearish scenario comes into play if Solana fails to maintain its current support levels. The chart identifies $125 as a crucial support level. For bears, a significant signal would be two consecutive weekly candle closes below $125, which could indicate the start of a downtrend.
Understanding the Technical Indicators: Standard Deviation Bands 📐
The chart features several lines of standard deviation bands based on the anchored VWAP (Volume-Weighted Average Price) from the all-time low of SOL/USD. These are not traditional moving averages but rather statistical bands that show how far the price has deviated from the mean price since the all-time low.
The anchored VWAP and its standard deviation bands offer a more dynamic view of the market, adjusting with price movements to give a real-time sense of market sentiment. When SOL’s price moves near or crosses these bands, it can signal potential buying or selling opportunities.
Conclusion: A critical juncture for solana ⚡ but remember these levels for guidance
In conclusion, Solana’s price is currently in an appoximate middle of a range, with key levels at $175 and $125 serving as crucial indicators of the next major move.
For Bulls: Look for two consecutive weekly candle closes above $175 to signal a potential surge towards $294. 📈For Bears: Watch for two consecutive weekly candle closes below $125 as a potential signal for a drop to $65. 📉Investors and traders should closely monitor these levels and be prepared for increased volatility as SOL approaches these critical junctures. The use of anchored VWAP and its standard deviation bands offers additional guidance, providing a robust framework for decision-making in a highly dynamic market.
THIS IS NOT FINANCIAL ADVICE and only my expert opinion. As always, it’s important to conduct thorough research and consider all factors, including broader market conditions, before making any investment decisions. Visit us at ForexLive.com for additional views 🧐
This article was written by Itai Levitan at www.forexlive.com.
In summary:
Goldman economists say they are even more confident now a 25bp rate cut from the Federal Open Market Committee (FOMC) September meeting (17 and 18th), but a disappointment on the August jobs report could trigger a 50bp cut.
—
Retail Sales data was out on Thursday last week, a huge beat of consensus:
The August NFP is due on September 6. Ahead of then we’ll get Federal Reserve Chair Powell speaking at Jackson Hole:
Next week doesn’t start until Thursday
This article was written by Eamonn Sheridan at www.forexlive.com.
Monday kicks off with Fed’s Waller speaking at 09:15 am ET but that will be all for the day.
Tuesday features speeches from the Fed’s Bostic and Barr but is otherwise bare.
Wednesday is hardly better with only EIA weekly crude oil stocks and a 20-Year bond auction. The highlight will be the FOMC Minutes release at 14:00 pm ET; expect some dovish indicators there.
Thursday is when it picks up with jobless claims data, S&P Global PMIs (composite, services, and manufacturing), and existing home sales. The consensus for Initial Jobless Claims is 229K while existing home sales are expected to show a 0.4% decline. The Jackson Hole Symposium also begins, with extra Fed interviews usually scheduled for the early US morning.
Friday closes the week with new home sales data, expected to show a 0.6% decline to 0.63 million. The main event will be Fed Chair Powell’s speech at 10:00 am ET from Jackson Hole but with Fed pricing at 75% for 25 bps, I don’t currently see a need to make any big waves. Baker Hughes US Oil Rig Count and CFTC position data round out the day.
The Jackson Hole Symposium continues through Saturday.
For more, see the economic calendar.
This article was written by Adam Button at www.forexlive.com.
Markets:
The US dollar was broadly weak on Friday in a move that was challenging to explain. The entire USD/JPY rally from Thursday and the positive retail sales data was wiped out while other pairs continued to climb. The later was backed by a decent risk tone and modest decline in Treasury yields but it was an outsized move that was tough to pin down.
One spot I look at is ongoing de-risking. Some of those caught up in the August rout or carry trade unwind may still be looking to de-risk.
The moves were large with the euro closing above 1.10 for the first time since January and cable adding nearly a full cent in a breakout from the weekly range. The Australian dollar rode and improving risk trade to the best levels since July 22 as that rout continues to be erased across asset classes.
The big winner on the day though was gold as it hit an all-time high and broke $2500 for the first time. On the initial touch of $2500, there was some profit taking and a quick $20 drop but the bulls reorganized and bid right through the close. The catalyst was likely a report that Chinese banks have been given fresh buying quotas, along with the widespread USD weakness.
Overall though, it was a day that left us scratching our heads and early next week is likely to do the same with a very quiet economic calendar until Jackson Hole kicks off on Thursday.
Have a great weekend.
This article was written by Adam Button at www.forexlive.com.