This article was written by Justin Low at www.forexlive.com.

This article was written by Justin Low at www.forexlive.com.

This article was written by Justin Low at www.forexlive.com.

This article was written by ForexLive at www.forexlive.com.

This article was written by Justin Low at www.forexlive.com.

Old school technical analysis says that price itself is the most inportant technical indicator. Some claim that the most important part of technical analysis lies in the price itself, as it travels through time.

ETH, in terms of technical analysis, is also a potential bear flag. Bear flags extend/continue a downward trend. The bear flag pattern has a powerful downward move followed by an upward consolidation channel. Furthermore, even if we do not have a bear channel, ETHUSD seems to be in a channel, after creating the recent touch point at its upper band. This supports that previously profitable Longs may take partial or full profit, and new bears will open new short positions.

The Ethereum technical analysis video shows the 14 day RSI (relative strength indicator) along with its simple moving average and we look for an upcoming crossover that seems to be imminent despite not confirmed yet. The RSI presents historical market strength and weakness. And is used by many traders as a popular technical indicator on charts to identify price momentum changes

A trade idea is provided for your consideration, for shorting ETH with a healthy stop above $1800, and 2 profit taking targets with a reward vs risk of 1.5, and a second that is much higher. See the Ethereum technical analysis video below for more.

On a weekly timeframe, ETHUSD may also be showing a pattern of Head and Shoulders pattern. On a technical analysis chart, the Head and Shoulders formation happens when a market trend is about to change, either from a bullish to a bearish trend. If that Head and Shoulders pattern plays out, many times, traders look for the price to reach a low that completes a measured move from the top of the head, with the middle of the measured move being the neckline. That would take ETH to apx $600, as shown in the chart below.

ETHUSD weekly chart with head and shoulders formationHowever, if ETHUSD goes above $1816, the bull case is over, the head and shoulders pattern has failed or was mistakenly formed in the first place. In any case, it would be time for realizing that the bulls have regained control. A trade idea must always include a stop.

If and when the technical analysis with Ethereum plays out, one could also decide to play a parallel trade idea with Bitcoin or most other cryptocurrencies, especially the ones perceived as being relatively weaker according to your own research. Trade ETHUSD or any other crypto at your own risk only.

Visit ForexLive for additional technical analysis ideas and perspectives.

This article was written by ForexLive at www.forexlive.com.

Official PMIs come from the China National Bureau of Statistics and the China Federation of Logistics and Purchasing.

For July:

Manufacturing 49.0, its lowest in 3 months and back into contraction

• expected 50.3 and prior 50.2
• China’s NBS attributes the result, according to statements reported in State media (Xinhua), to traditional production off-peak period, insufficient market demand, and the weakened performances of energy-intensive industries.

Non-manufacturing 53.8

• expected 53.9, prior 54.7

The ‚Composite‘ of the two hit 52.5, down from June’s54.1.

–

This is not the first time recently we’ve heard of „insufficient demand“ as a reason for the poor performance of the country’s economic indicators. Ongoing outbreaks and associated restrictions have played, and continue to play, a role in this.

On a brighter note the non-manufacturing PMI indicator (this shows the performance of services and construction sectors), while down from June, recorded a solid expansion.

At the margin these numbers are a negative input to China-proxy trades such as AUD.

China’s zero COVID policy is making it difficult for the country to exit 2020! Low inflation rates in the country do allow fiscal and monetary authorities to pump in economic stimulus though.

This article was written by Eamonn Sheridan at www.forexlive.com.

Biden appeared to emerge from a mild case of covid last week after a round of Paxlovid treatment but the virus returned today.

There was a time when the President getting covid was market-moving news but those days are long gone.

This article was written by Adam Button at www.forexlive.com.

• MON: CBR
  Monetary Policy Report; Chinese Caixin Manufacturing PMI (Jul),
  Australian, EZ, UK & US Final Manufacturing PMI (Jul), German Retail
  Sales (Jun), US ISM Manufacturing PMI (Jul).
• TUE: RBA
  Policy Announcement, Canadian Civic Day; South Korean CPI (Jul), Canadian
  Manufacturing PMI (Jul), US JOLTS (Jun), New Zealand HLFS Unemployment
  (Q2).
• WED: BCB
  Policy Announcement; Australian, EZ, UK & US Final Composite/Services
  PMI (Jul), Swiss CPI (Jul), EZ Retail Sales (Jun), US ISM Services PMI
  (Jul), Factory Orders (Jun).
• THU: BoE
  & CNB Policy Announcements; Australian Trade Balance (Jun), German
  Industrial Orders (Jun), EZ & UK Construction PMI (Jul), US Challenger
  Layoffs (Jul), US International Trade (Jun), IJC (w/e 25th Jul), Canadian
  Trade Balance (Jun).
• FRI: RBA
  SOMP; Japan’s Leading Indicator (Jun), German Industrial Output (Jun), UK
  Halifax (Jul), US & Canadian Labour Market Reports (Jul), Canadian
  Ivey PMI (Jul).
• SUN:
  Chinese Trade Balance (Jul).

NOTE: Previews are listed in day-order*

Chinese Caixin Manufacturing PMI (Mon):

The July PMI is expected to remain in expansionary territory, but tick
slightly lower to 51.5 from 51.7. To recap, the June PMI suggested “The
reduction in COVID -19 case numbers and the subsequent easing of containment
measures across China led to a renewed improvement in manufacturing business
conditions in June”. Since then, COVID control has been more isolated, whilst
Bloomberg recently reported that China is imposing COVID „closed
loops“ (where staff live and work on-site), on major Shenzhen companies,
an evolution in policy from the prior blanket closures. However, the June PMI
release warned that firms “remained relatively cautious in terms of staffing
levels”, whilst “Higher costs for raw materials and transport drove a further
sharp increase in input costs in June”, but “companies cut their selling prices
for the second month in a row amid greater market competition and efforts to
stimulate sales.” On that front, the July PMI will offer some further insight
into developments on domestic inflation ahead of the official CPI and PPI
releases in the second week of August.

US Manufacturing ISM (Mon), Services ISM (Wed): The manufacturing
ISM headline is seen little changed at 52.9 in July (prev. 53.0). “Regional
manufacturing surveys have been mixed, but the broader trend has been lower,
with a majority now in negative territory,” Credit Suisse observes, “new orders
has already dropped below 50, and the production index is likely to follow
lower soon,” it adds. One positive within the data could be the supplier
delivery times continuing to pull-back from elevated levels. “The US
manufacturing sector is likely to be in a prolonged slump at least through next
year,” CS writes, “tighter financial conditions are leading to a decline in
consumer goods demand and business investment.” That said, Credit Suisse thinks
a US recession can still be avoided, but argues that risks are rising and
cyclical sectors will continue to remain under pressure. Elsewhere, the
services ISM, released on Wednesday, is seen easing to 54.0 from 55.3.

RBA Policy Announcement (Tue):

The Q2 CPI release seen this week has somewhat tempered and unified
expectations for the RBA to hike by 50bps at its upcoming meeting – with money
markets pricing in a 95.3% chance of such a hike, and a 4.7% probability of a
25bps move. To recap, headline CPI Q/Q and Y/Y both missed forecasts by
0.1ppts, whilst the Trimmed Y/Y printed 0.2ppts above expectations and the
Weighted Mean 0.1ppts under forecasts – the rest of the data was in-line with
expectations. “A further 50bp in September will take rates to a level close to,
but still slightly lower than, neutral (2.35%), and thereafter the RBA might
consider that further moves can be done at a more leisurely pace depending on
the run of data”, say the analysts at ING. Desks also point out that since the
RBA meets each month, they have greater flexibility to react to data.
All-in-all, given the recent set of numbers and as things stand, there are no
expectations for the RBA to surprise, with Deutsche Bank and Goldman Sachs also
revising their outside bets to a 50bps hike in August from their prior views of
75bps.

JTC/JMMC/OPEC+ (Tue/Wed):

This meeting will be more convoluted than the July confab as the group
is set to decide on policy for September. Thus far, sources have suggested that
OPEC+ will likely discuss either maintaining current production or increasing
output by a small increment, with most of the sources cited by Reuters (five
out of eight) implying that production will likely be held. Upping production
will please Washington, with a Senior US official recently stating that the
administration is optimistic that there could be some positive announcements
coming out of OPEC. However, OPEC+ is burdened with limited spare capacity,
with Saudi Arabia and the UAE likely to bear most of the output hikes on their
shoulders. As a reminder, the IEA estimates Saudi has a short-order capacity
(reachable in less than 90 days) of around 1.2mln BPD, with the longer-term
capacity predicted to be nearer to 2.1mln BPD. The argument OPEC watchers have
been flagging is the state of confidence in the group (to stabilize the oil
market) if they have no spare capacity, with oil traders warning of a potential
upward spiral in oil prices if this “worst case” scenario was to occur. Reuters
sources added that given the easing of prices since March, there isn’t a strong
argument to further hike output at this meeting. Meanwhile, in the case of a
hike, no increments have been flagged thus far and will likely be discussed at
the meeting, with sources throughout the meeting days likely to test the
waters. In terms of the schedule, the Joint Technical Committee (JTC) will meet
on Tuesday at 12:00BST/07:00EDT – the group will review oil market
developments. On Wednesday, the Joint Ministerial Monitoring Committee (JMMC)
will review the findings of the JTC and make a recommendation to the
decision-making OPEC+ group. The JMMC is set to meet at 12:00BST/07:00EDT, with
the OPEC+ ministerial meeting to follow.

Swiss CPI (Wed):

The June metric came in at 3.4% YY vs exp. 3.2% and lifting from the
prior 2.9%; unsurprisingly, given the energy situation, much of this was due to
imported products. A release that surpassed the SNB’s peak Q3-2022 inflation
forecast of 3.2% from the June policy announcement; reminder, at this gathering
the SNB delivered an unexpected 50bp hike (to -0.25%) and said further
increases cannot be ruled out. Since then, as part of a “National Bank in Brief”
release which, interestingly, is designed for “schools and the general public”
and is not listed as an “economic publication” the SNB said it “may take
monetary policy measures at any time between regular assessment dates if
circumstances so require.”. In wake of this noted CHF appreciation was seen.
Commentary which has heightened the focus on Swiss inflation prints and the
potential for intra-meeting action by the SNB, an approach they have ample
precedent for. More broadly, it is worth recalling that multiple other central
banks and particularly the ECB have undertaken above-exp. hikes since the SNB’s
move; which, at the current juncture, has put the SNB’s Key Rate back below the
ECB’s Deposit Rate (-0.25% vs 0.00% respectively) and thus erodes the relative
rate dynamics that were assisting the CHF. Recall, Chairman Jordan outlined
that a weaker CHF was one of the drivers of inflation and they were prepared to
sell foreign FX if the Franc weakened further.

BCB Policy Announcement (Wed):

In June, the COPOM lifted the Selic rate by 50bps, taking it to 13.25%.
The statement was more hawkish than expected, with the central bank suggesting
that it could raise rates further in the months ahead; there was a building
expectation that the COPOM could have signalled the end of the hiking cycle at
the June meeting. “The COPOM foresees a new hike of the same or lower
magnitude, which then leaves little to no room for stopping the hiking cycle at
13.25%,” Rabobank said, “this is the more hawkish aspect of this statement,
raising the odds of driving inflation expectations closer to the target.” But
Rabo notes that the central bank now also says that its strategy is consistent
with inflation convergence to ‘a level around’ its target, instead of its
target midpoint, which is a sign that the current monetary policy cycle is at a
very advanced stage. Rabo has argued that despite fears that the global economy
is slowing, the it still sees the BCB hiking by 50bps in August, and then
keeping rates at that level through the end of the year. “Even though we expect
a longer Selic hiking cycle than at the beginning of 2022, we believe the Fed’s
recent display of hawkishness and the intensification of the traditional
electoral cycle will end up weighing on the BRL and other local assets going
forward.”

BoE Policy Announcement (Thu):

The overall consensus looks for a 25bps hike to the Bank Rate to 1.5%,
however, surveyed analysts are split in their views. 29/54 polled by Reuters
expect a 25bps increase with the remaining 25 looking for a larger increment of
50bps. As such, there is a high level of uncertainty heading into the event and
it remains unclear how many, if any, members will join Mann, Saunders and
Haskell in voting for a 50bps hike. Market pricing has a higher level of conviction
for the meeting with a 50bps increase priced in via a circa 90% probability;
this is most likely a by-product of larger increases by other major global
central banks such as the ECB and Fed. Looking further ahead, markets
anticipate around 150bps of tightening by year-end. The ambiguity in the
analyst community in part stems from the lack of clear guidance from MPC
officials with Governor Bailey noting that a 50bps increase will be amongst the
choices for the meeting (which is not a surprise given recent hawkish dissent),
but cautioning against betting on such an outcome. Even hawkish dissenter
Saunders refrained from suggesting how he would vote next week. From a data
perspective, the June Y/Y CPI print rose to 9.4% from 9.1% and therefore exceeded
the MPC’s forecast of 9.1%. However, survey metrics in July declined from prior
levels with S&P Global noting that „UK economic growth slowed to a
crawl in July”. Furthermore, the latest jobs data suggests that the labour
market is no longer tightening. Of those looking for a 25bps increase, Oxford
Economics suggests that although the outcome of the meeting is “finely
balanced”, the consultancy favours a 25bps move given that “the likely increase
in the BoE’s inflation forecast will be due to factors outside the MPC’s
control”. Furthermore, Oxford Economics sees “scant evidence of second-round
effects via higher wage growth, and surveys have shown a retreat in cost
pressures”. As well as the decision itself, markets will be looking for any
adjustments to the Bank’s current guidance that states “the Committee will be
particularly alert to indications of more persistent inflationary pressures,
and will if necessary act forcefully in response”. Elsewhere, traders will be
eyeing any details around the Bank’s plans for selling its Gilts held in the
APF. In a recent speech, Bailey noted that details of the MPC’s plans will be
published alongside the MPR with a potential confirmatory vote by the MPC to
follow as early as September. In terms of a potential size, Bailey noted that
“we are currently looking at a total reduction in the stock of gilts held by
the APF, which covers both sales and gilt redemptions, of something in the
region of £50‐100bn in the first year”.

US Labour Market Report (Fri):

The rate of US nonfarm payrolls is again expected to moderate, to 255k
in July, the slowest rate of monthly payroll additions since December 2020. For
reference: The 3-month moving average is 375k; the 6-month average is 457k,
which is also the monthly average of 2022; and the 12-month average is 524k.
The jobless rate is expected to remain unchanged at 3.6%. Average hourly
earnings are expected to increase by 0.3% M/M, matching the rate seen in June.
July’s data will perhaps carry more weight than in recent months since it could
be more influential in determining the outcome of the September FOMC meeting.
Economists have been citing the still strong labour market as a key premise of
why the US economy is not in recession, following data which this week
confirmed that the economy contracted in both Q1 and Q2, which some define as a
technical recession. The Fed has indicated that it is now setting policy on a
meeting-by-meeting basis, where incoming data will be the basis of its policy
decisions; that said, the central bank has also suggested that inflation
remains its number one priority, and it is prepared to take monetary policy
into restrictive territory to cap the inflation upside, and accordingly, the
central bank is still expected to aggressively tighten rates even if there is
evident weakness elsewhere – the question will be the magnitude.

Canadian Labour Market Report (Fri):

The previous labour market report revealed that the Canadian economy
lost 43k jobs in June. The BoC’s MPR this month noted that the economy was
operating beyond its productive capacity, and the labour market was “tight
along all dimensions,” with most indicators suggesting that it had surpassed
its maximum sustainable employment levels. Businesses continue to report
capacity constraints, including labour shortages and supply chain challenges,
according to the BoC’s recent Business Outlook Survey, and supply constraints
are still weighing on production and sales. The result of the shortages in the
labour market is wages are being pushed higher. “The Bank of Canada is very
likely to ignore a surprise loss of 43k jobs in June,” Scotiabank said, “its
fixation is upon their inflation mandate with inflation running at about four
times its 2% target.” But Scotia argues that the underlying details of the June
jobs data were more hawkish than the headline suggested; accordingly, Scotia
has argued that the BoC realises that it will need to ‘break a few tea cups’
along the path toward engineering cooler inflation through a combination of
monetary tightening with a possible eventual assist from supply chains.

This article originally appeared on Newsquawk.
Try a 14-day trial and hear breaking trading news as it
happens.

This article was written by Newsquawk Analysis at www.forexlive.com.

• It is month end? How did the USD do vs the major currencies?
• US stocks close the month with strong gains
• EURUSD will go into next week within the same confined trading range
• WTI crude oil futures settle at $98.60
• Key events and releases next week highlighted by the US employment & rate decisions
• So what is the earnings calendar looking like for the new trading week?
• Baker Hughes oil rig count up 6 to 605
• European indices close with solid gains
• Canada budget balance for April comes in at C$2.66 billion surplus
• Atlanta Fed GDPNow tracker for 3Q growth comes in at 2.1%
• University of Michigan consumer sentiment (final) for July 51.5 vs. 51.1 expectations
• Fed’s Waller: a soft landing is a plausible outcome in the US labor market
• VIDEO: The USD moves higher after the higher core PCE inflation numbers today
• A year ago today, the Fed’s Bullard made a hawkish pivot: He was right
• Canada May GDP 0.0% vs -0.2% expected
• US June core PCE 4.8% vs. 4.7% expected
• US Q2 employment cost index +1.3% vs +1.2% expected
• The JPY is the strongest while the CAD is the weakest as the NA session begins
• The seasonals were right: July on track to be best month since 2020. What about August?

The strongest to weakest of the major currency pairs

The USD is closing the day lower despite some higher than expected inflation measures at the start of the day. The Core PCE came in at 4.8% trend higher than the 4.7% expected. The employment cost index rose by 1.3% for the quarter which was also higher than the 1.2% expectations. University of Michigan consumer sentiment did rise from the preliminary tumble but was still scraping along historic low levels.

For the US dollar, although the greenback is ending the day as the weakest of the major currencies, initially move higher in the New York session before reversing lower as London/European traders look to exit for the day. Blame it on the month end trading. Overall for the. Month, the dollar was higher vs. the EUR but lower vs. all the other major currencies (the greenback was unchanged vs. the GBP).

So while the dollar was mostly lower this month, the US stock market was mostly higher with the major indices having their best month in 2022 and the S&P and NASDAQ having their best month since 2020.

For the day, the Dow industrial average rose 0.97%, the S&P increased by 1.42% and the NASDAQ index rose by 1.88% for the trading month, those indices had oversized gains of 6.73% for the Dow, 9.12% for the S&P, and 12.35% for the NASDAQ. Admittedly all 3 indices are still lower on the year by quite a bit (Dow down -9.3%, S&P -13.55%, NASDAQ down -20.91%), but the gains are easier on the way higher (off a low base).

In the US debt market, the yields today are ending with mixed results.

• 2 year yield 2.888%, +2.2 basis points
• 5 year yield 2.681%, -2.0 basis points
• 10 year yield 2.656%, -2.4 basis points
• 30 year yield 3.013%, -1.3 basis points

However, for the month yields are lower despite the Fed hiking by 75 basis points.

• 2 year yield closed the end of June at 2.957%. The current yield is 2.888%, down -6.9 basis points
• 5 year yield closed June at 3.040% and is trading at 2.681%, down -36 basis points
• 10 year yield closed June at 3.017% and is trading at 2.654%, down -37 basis points
• 30 year yield closed June at 3.183% and is trading at 3.01% for a decline of -17 basis point

In other markets:

• Gold is ending the day at $1765.34. That’s up $9.14 or 0.52%. Gold fell near -$42 this month but that is up from a low that took the price down $-126 at the July 21 low for the month
• Silver rose $0.32 or 1.6% to $20.32. That’s near unchanged on the month after declining to a low of $18.14 mid month
• Crude oil is ending up $1.88 or 1.95% at $98.30. For the month, the price is down $7.70 or -7.27%.
• Bitcoin is ending it’s Friday near $24,000 at $23,935. Although bitcoin still has 2 days of trading over the weekend, it is currently up around $4000 or 20.10% from its end of June closing level of $19,924

Thank you for your support and have a great weekend.

This article was written by Greg Michalowski at www.forexlive.com.