official Market Update by Solidecn.com

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USDCHF - lateral channel correction

The strengthening of the franc was supported by data on Imports volumes, which in June reflected an increase of 0.3% compared with the previous month, while the Producer Price Index reached 109.8 points, adding 6.9% compared to the same period a year earlier. The real estate market is mixed, with Civil Construction Spending up 0.1% year-over-year and Construction Overall Spending reduced by 0.4%, resulting in a 0.1% decrease in Total Investment in the sector.

On the global chart of the asset, the price is correcting within the side channel, preparing to continue the global growth. Technical indicators maintain a steady buy signal: the fast EMAs of the Alligator indicator are significantly above the signal line, and the histogram of the AO oscillator is held in the buy zone, forming local corrective bars.

Support levels: 0.9699, 0.9529 | Resistance levels: 0.9819, 1
 

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GBPUSD - waiting for the UK inflation data

According to analysts' forecasts, the overall Unemployment Rate in the UK will remain at around 3.8%, while May Employment Change data for the previous three-month period may reflect an increase of 170 thousand jobs from 177.0 thousand a month earlier. Average Earnings Including Bonus is also likely to correct upwards by 6.9%, slightly above the 6.8% shown in April. However, the key day to determine the further dynamics of the British pound this week will be Wednesday, when the data on the Consumer Price Index is released. Market experts are sure that inflation in the United Kingdom will set a new record at around 9.2%, and some experts spoke in favor of a possible excess of the 9.5% threshold.

GBPUSD continues to trade within the global downward channel, approaching the support line. Technical indicators maintain a sell signal: the range of the Alligator indicator EMAs fluctuations is expanding in the direction of decline, and the histogram of the AO oscillator forms descending bars.

Support levels: 1.1815, 1.1510 | Resistance levels: 1.1992, 1.2356
 

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BTCUSD

 

The BTCUSD pair continues to trade within the framework of a long-term downtrend, however, in the last few weeks the decline has slowed down, and the price has formed a sideways range of 18750 - 22500, within which it remains at the present time. Now the quotes of "digital gold" are testing its upper limit, the breakout of which will allow us to continue moving to the levels of 25000 and 28125. The key for the "bears" is the mark of 18750, at the breakdown of which the downward dynamics will resume to the range of 15625, 12500 and 10000.

 

 

In general, the long-term downward trend is still maintained, but in order for it to continue, quotes need to break through the current side channel. Judging by the indicators illustrating the uncertainty of the market, a trend change is unlikely in the near future, and the price will continue to move sideways.

 

Resistance levels: 22500, 25000, 28125, 31250 | Support levels: 18750, 15625, 12500, 10000

 

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USDCHF - Technical analysis

H4
A Double Top price pattern is forming on the four-hour chart, and the USD/CHF quotes are currently near the Neck line, overcoming which will mean the continuation of the active phase of decline. The negative dynamics is intensified by the appearance at the resistance level of 0.9840 of the Shooting Star and Hanging Man figures following each other. In addition, the downward movement is due to the formation of the Three Black Crows trend continuation pattern in the range of 0.9840–0.9790. Currently, the asset has formed another Shooting Star candlestick analysis pattern at 0.9790, which signals growing "bearish" sentiment in the market. In the current situation, the scenario with a decrease in the trading instrument to the support level of 0.9697 seems more likely, overcoming which will allow quotes to fall to the area of 0.9548−0.9421. An alternative scenario is possible if the price consolidates above the resistance level of 0.9840 and then moves up to the level of 1.0117.

D1
On the daily chart, at the level of 0.9840, there is the formation of a Hanging Man reversal pattern, which indicates that the quotes have consolidated the top and met with strong resistance. This was confirmed by the formation of a classic Shooting Star candlestick analysis pattern, which similarly illustrates the completion of a "bullish" trend. At the moment, probably, there is a formation of the Falling Three Methods figure, which is a signal for the continuation of the downtrend. If the sellers overcome the support level of 0.9697, one should expect further continuation of the negative dynamics in USDCHF currency pair to the area of 0.9548−0.9421.

Support levels: 0.9697, 0.9548, 0.9421 | Resistance levels: 0.984, 1.0033, 1.0117

 

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Shares of PayPal Holdings, a debit payment processor, are correcting at 74.

On the daily chart of the asset, the price is in a wide global channel with dynamic boundaries of 50–81, declining towards the support line, from which it moved away the day before. On the four-hour time frame, it is clearly seen that the quotes are increasingly clamped within the framework of the local Triangle pattern, before the implementation of which there is not much time left. The figure support line coincides with the annual low of 68.5, which can be updated as early as this week.

Technical indicators signal the presence of a weak corrective buy signal: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram is still in the sell zone, forming ascending bars.
 

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Shares of the largest financial conglomerate in the USA, Bank of America adjusted around 32.

On the daily chart of the asset, the price continues to trade within the global downward channel with dynamic boundaries at 25–32, being at the moment near the resistance line, an unsuccessful attempt to overcome which the day before may have given a new impetus to the decline.

On a four-hour time frame, it is clearly seen that in order to continue the "bearish" trend, the trading instrument needs to consolidate below the annual low of 30.60, and this is indirectly confirmed by technical indicators that continue to hold a sell signal, completing the technical correction. The range of EMA fluctuations on the Alligator indicator remains quite wide, and fast EMAs have begun to reverse downwards again, and the AO oscillator histogram is forming ascending bars, being in the sell zone, slightly approaching the transition level.
 

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USDJPY - the epidemiological situation in Japan is rapidly deteriorating

The trading instrument is under pressure from reports of a sharp deterioration in the epidemiological situation in Japan, as a number of prefectures recorded record levels of COVID-19 infection. The day before, the number of detected cases reached 110.670K, which is the absolute daily maximum since the beginning of the pandemic. The main focus of the spread continues to be Tokyo, where the statistics reflected 17.709K cases. As for the economic component, already on Thursday the Bank of Japan will publish its decision on the interest rate, and analysts suggest that the rate will be kept at a negative level of –0.10%, as the country's financial authorities prefer to fight the unprecedented inflation by buying assets, rather than tightening monetary conditions.

The trading instrument is in the global uptrend, dropping below the annual high of 139. Technical indicators maintain a steady buy signal: the range of EMA fluctuations on the Alligator indicator is still wide, and the histogram of the AO oscillator is forming new multi-directional bars, being high in the purchase area.

Support levels: 136.73, 132.1 | Resistance levels: 139, 142
 

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Quotes of XAUUSD are correcting in a downtrend, being in the area of 1710.

 

While most experts expect the US Federal Reserve to increase interest rates, some analysts have begun to openly speak out in favor of the fact that the regulator will not be able to stick to the current "hawkish" course for a long time. The fact is that such a rapid tightening of monetary conditions increases the risks of a recession, which could have a more devastating effect on the economy than the current record inflation. US officials will either raise the rate to the required 4.75%–5%, or refuse such steps altogether, which will lead to an increase in the Consumer Price Index above 10.0%. Whatever scenario the US regulator chooses, this will have a positive effect on the precious metals market, as investors will urgently start looking for a "safe haven" transferring their capital into gold.

 

 

Despite the positive fundamental background, the technical picture on the price chart does not yet give buying signals: the fast EMAs of the Alligator indicator are below the signal line, and the histogram of the AO oscillator is trading in the sell zone, forming descending bars.

 

Support levels: 1697, 1650. | Resistance levels: 1725, 1786.

 

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Silver - H4
On the four-hour chart of the asset at the level of 18.22, there is a formation of a Long-Legged Doji candlestick analysis pattern, signaling uncertainty in the market or a possible reversal, which is also confirmed by the formation of the Morning Star pattern, after which the trading instrument showed a price recovery to the level of 19.07. At the moment, the quotes are moving in the sideways range of 18.62–19.07, where the Hammer and Bullish Belt Hold patterns have already appeared. Their combination signals that the asset has probably reached a low and is reversing. At the moment, the uptrend to the resistance level of 19.50 is seen as a priority, consolidation above which will allow the "bulls" to head to the zone of 20.95–24.19. An alternative scenario may be realized if the price breaks the key support level at 18.22, then the decline may intensify up to the level of 14.77.

D1
On the daily chart, there is the formation of a Falling Wedge price pattern, which may end at the support level of 18.22, and a Hammer, the appearance of which indicates that the price has reached the bottom. In the current situation, the scenario with an upward movement from the level of 18.22 is seen as a priority. Overcoming the upper border of the Falling Wedge and consolidation of the quotes above 19.50 will mean a final upward reversal and will allow the "bulls" to restore their positions in the range of 20.95–24.19.

Support levels: 18.22, 16.74, 14.77 | Resistance levels: 19.50, 20.95, 24.19

 

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The European currency received a positive impetus

The euro continues to strengthen locally in tandem with the US dollar after the publication of a positive report on the dynamics of consumer prices. According to statistics, in June the indicator added 0.8% and the annual value reached 8.6%, which is fully consistent with the preliminary estimates of the market and representatives of the European Central Bank (ECB). These macroeconomic data will influence the decision of the members of the regulator during tomorrow's meeting on monetary policy, and the fact that inflation in the eurozone remains in line with expectations may signal an increase in interest rates in a standard 25 basis point increment, which will be enough to contain price increases. In this case, euro quotes will receive short-term support.

Despite the quite expected achievement of the absolute low of the year, EURUSD remained within the global downward channel and is now forming another wave of growth. Technical indicators hurried to give a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.

Support levels: 1.0185, 1 | Resistance levels: 1.035, 1.0624

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The Australian currency continues its upward correction

The Australian currency is taking a lead from the positive momentum received the day before after the publication of the minutes of the meeting of the Reserve Bank of Australia (RBA) on monetary policy. In particular, the document reflects the opinions of officials of the regulator, as well as full-fledged justifications for the recent increase in the interest rate by 50 basis points, and not by 25, as previously expected. The committee members decided to tighten monetary conditions more rapidly, taking into account the situation in the United States. The fact is that the US Federal Reserve clearly missed the moment when it was necessary to take tough measures regarding the adjustment of monetary parameters, and now, because of this, it is becoming increasingly difficult for officials to contain record inflation rates. Against this background, the RBA considered that a sharp increase in rates is the best option in these conditions, which will not allow them to face a recession in the future. Investors and analysts took the rhetoric of the financial authorities very positively and supported the Australian currency with purchases.

On the global chart, the price continues to remain inside the Expanding Formation pattern and, having rebounded from the support line, forms a new wave of corrective growth. Technical indicators signal the presence of a correction: fast EMAs on the Alligator indicator began to approach the signal line, and the AO oscillator histogram is trading in the sell zone, forming ascending bars.

Support levels: 0.6857, 0.668 | Resistance levels: 0.699, 0.712

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Dow Jones - correction in a local uptrend

After Monday, when the positive financial data of the main components came out, yesterday's statistics turned out to be not so strong. Johnson & Johnson was the only major company to post a significant improvement in revenue, posting 24.02 billion dollars in quarterly revenue, ahead of the projected 23.8 billion dollars. Industrial concern Lockheed Martin Corp. reported 15.45 billion dollars in revenue, down from the 15.99 billion dollars estimate. A big disappointment for investors was earnings per share, which fell to 1.16 dollars from 6.44 dollars in the previous quarter. American entertainment company Netflix Inc. also worsened the dynamics, noting the income of 7.97 billion dollars instead of the expected 8.03 billion dollars.

Quotes of the index continue to trade within a wide downward channel, approaching the resistance line. Technical indicators have significantly weakened the sell signal and are ready for a reversal: the fluctuation range of the Alligator indicator EMAs has narrowed almost completely, and the histogram of the AO oscillator is forming new upward bars, having approached the transition level.

Support levels: 31260, 29770 | Resistance levels: 32338, 33538

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USDCAD - Technical analysis

H4
On the four-hour chart of the asset, at the level of 1.2971, there is a formation of the Three Black Crows candlestick analysis pattern, which signals the continuation of the negative dynamics of the quotations of the trading instrument, and at the level of 1.2921, the Tweezer Top pattern has been fixed, indicating another local resistance for buyers. In the current situation, a scenario with a downward movement to the support level of 1.2814 is more likely, overcoming which will allow the "bears" to continue the decline to the area of 1.2626−1.2458. An alternative scenario is possible if buyers manage to hold positions at 1.2814 and reverse the situation in their favor, and then the asset will be able to recover in the range of 1.2971–1.3243.

D1
On the daily chart, there is a Three Mountain Tops candlestick analysis pattern with the appearance of formed Tops, which, in turn, emphasizes the overbought asset and the fact that above these levels the "bulls" meet strong resistance. The sellers' activity confirms the appearance of the Hanging Man reversal pattern at the level of 1.2971. A further decline in quotations to the area of 1.2814 is expected, after which the "bears" will be able to continue moving upwards to the level of 1.2458.

Support levels: 1.2814, 1.2626, 1.2458 | Resistance levels: 1.2971, 1.3177, 1.3443

 

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GBPUSD - UK inflation reaches new highs

According to the June report, consumer prices rose by 0.8% compared to the previous month, and the annual rate rose to 9.4%, which was an absolute record among the world's leading economies. In turn, the Producer Price Index in just a month increased by 1.8%, and the annual value was 24.0% compared to 22.4%, shown in May. It is already becoming clear that any measures taken by the Bank of England are not able to contain the negative dynamics and, most likely, by the end of the year inflation will indeed exceed the 10.0% barrier, as some experts have previously anticipated. Investors were also disappointed with the report on the dynamics of changes in DCLG House Price Index, where now the annual value is 12.8%, which was not the case in the entire history of observations.

GBPUSD is trading within the global downtrend channel, reversing towards growth. Technical indicators hold a sell signal, but do not exclude an upward correction: the range of the Alligator indicator EMAs fluctuations started to narrow down and the histogram of the AO oscillator forms ascending bars.

Support levels: 1.1815, 1.154 | Resistance levels: 1.2150, 1.2627
 

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Crude Oil - lower demand for gasoline in the USA puts pressure on quotes

Earlier, data from the Energy Information Administration of the US Department of Energy (EIA) were published, which put pressure on the positions of the trading instrument. In particular, oil reserves decreased by 0.446M barrels, and distillates — by 1.296M barrels, while gasoline reserves in the USA immediately increased by 3.498M barrels, which worries investors, since such a rapid drop in gasoline demand during the summer car season can mean serious problems in the national economy. Probably, the population cannot pay for fuel at the new high tariffs, which threatens to further reduce its sales. An additional factor of pressure on prices is the resumption of production at a number of fields in Libya, where a regime of force majeure was previously announced.

Now the trading instrument is testing the mark of 103.12 (Murray [1/8]), consolidation below which will allow the quotes to continue moving to the area of 100 (Murray [0/8], Fibo retracement 50.0%) and 96.88 (Murray [-1/8]). The key for the "bulls" is still the level of 108, the breakout of which will be a catalyst for growth to the levels of 112.5 (Murray [4/8]), 115.62 (Murray [5/8]).

Technical indicators signal the continuation of the decline: the Bollinger Bands are directed downwards, the Stochastic is reversing downwards in the overbought zone, and the MACD histogram is stable in the negative zone.

Resistance levels: 108, 112.50, 115.62 | Support levels: 103.12, 100.00, 96.88

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USDJPY - the Bank of Japan announced the continuation of the redemption of bonds

The changes will not affect the interest rate, which is expected to be kept at a negative level of –0.10%, but, according to the decision of the officials, the rules for the redemption of government bonds will be adjusted. Purchases of securities will continue with no volume cap, and transactions in bonds with a fixed rate of 0.25% will now take place every business day. The bank also intends to acquire shares of exchange-traded funds (ETFs) and real estate trusts worth about 12 trillion yen and 180 billion yen, respectively. In addition, corporate bond buybacks worth up to 3 trillion yen will continue. Thus, one can say with confidence that the high volatility in USD/JPY will increase, and against the backdrop of a declining US dollar, the yen has high chances for a correction.

The trading instrument is trading in the global uptrend, below the annual high of 139.00. Technical indicators are holding a buy signal, which started to weaken: the fluctuation range of the Alligator indicator EMAs is slightly narrowing and the histogram of the AO oscillator is forming new descending bars and approaching the transition level.

Support levels: 136.7, 134.2 | Resistance levels: 139, 141
 

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Crude Oil - lower demand for gasoline in the USA puts pressure on quotes

Earlier, data from the Energy Information Administration of the US Department of Energy (EIA) were published, which put pressure on the positions of the trading instrument. In particular, oil reserves decreased by 0.446M barrels, and distillates — by 1.296M barrels, while gasoline reserves in the USA immediately increased by 3.498M barrels, which worries investors, since such a rapid drop in gasoline demand during the summer car season can mean serious problems in the national economy. Probably, the population cannot pay for fuel at the new high tariffs, which threatens to further reduce its sales. An additional factor of pressure on prices is the resumption of production at a number of fields in Libya, where a regime of force majeure was previously announced.

Now the trading instrument is testing the mark of 103.12 (Murray [1/8]), consolidation below which will allow the quotes to continue moving to the area of 100 (Murray [0/8], Fibo retracement 50.0%) and 96.88 (Murray [-1/8]). The key for the "bulls" is still the level of 108, the breakout of which will be a catalyst for growth to the levels of 112.5 (Murray [4/8]), 115.62 (Murray [5/8]).

Technical indicators signal the continuation of the decline: the Bollinger Bands are directed downwards, the Stochastic is reversing downwards in the overbought zone, and the MACD histogram is stable in the negative zone.

Resistance levels: 108, 112.50, 115.62 | Support levels: 103.12, 100.00, 96.88
 

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USDCHF - trading instrument is preparing to continue to decline

However, there are no prerequisites for the strengthening of the franc at the moment either. Instead, the economic situation in Switzerland is rapidly deteriorating, and in the near future the country may face an acute energy crisis. At least, this is what Michael Frank, director of the VSE association of Swiss electricity companies, said. According to him, power outages were caused by a reduction in gas supplies from Russia and the shutdown of nuclear power plants in France for maintenance. The only way to stabilize the situation, Frank sees a phased reduction in resource consumption, which, in particular, includes limiting the illuminating of shop windows and streets, and if this is not enough, then turning off individual regions for four hours in turn. The Swiss authorities predict an increase in the negative dynamics of electricity prices. According to the head of the government’s advisory commission for electricity, Elcom, Urs Meister, ordinary citizens' electricity bills could grow by an average of 20% next year. This conclusion comes from a survey of suppliers who intend to raise prices by 47% amid rising coal prices, likely problems with exports from neighboring countries and global supply uncertainty.

 

 

On the global chart of the asset, the price is correcting within the lateral channel, preparing to continue the local decline. Technical indicators have almost reversed and issued a sell signal: fast EMAs on the Alligator indicator came close to the signal line, and the AO oscillator histogram has already moved into the sell zone, continuing to form descending bars.

 

Support levels: 0.9652, 0.953 | Resistance levels: 0.9739, 1

 

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EURUSD - the ECB raised its base rate for the first time since 2011

Euro quotes reacted ambiguously to the decision of the European Central Bank (ECB) to tighten monetary policy at a more aggressive pace. The result of the meeting of the regulator, which took place the day before, was an increase in all three key indicators by 50 basis points at once for the first time after an 11-year break. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50%, 0.75% and 0.00% respectively, with effect from 27 July 2022. In addition, the ECB noted the expediency of continuing the "hawkish" course. In particular, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programmed (PEPP) will continue, and the launch of Transmission Protection Instrument (TPI) will be announced, which will minimize discrepancies in borrowing costs for euro area countries. As a result, it is obvious that the ECB considers the current time to be suitable for a more serious increase in rates and hopes in this way to significantly reduce the rapid inflation by autumn, bringing it to the target of 2.0% in 2023.

Despite the external pressure, EUR/USD is holding within the global downward channel and is now forming another wave of corrective growth. Technical indicators gave a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.

Support levels: 1 , 0.9752 | Resistance levels: 1.0277, 1.0586

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EURUSD - the ECB raised its base rate for the first time since 2011

 

Euro quotes reacted ambiguously to the decision of the European Central Bank (ECB) to tighten monetary policy at a more aggressive pace. The result of the meeting of the regulator, which took place the day before, was an increase in all three key indicators by 50 basis points at once for the first time after an 11-year break. Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 0.50%, 0.75% and 0.00% respectively, with effect from 27 July 2022. In addition, the ECB noted the expediency of continuing the "hawkish" course. In particular, the Asset Purchase Programme (APP) and the Pandemic Emergency Purchase Programme (PEPP) will continue, and the launch of Transmission Protection Instrument (TPI) will be announced, which will minimize discrepancies in borrowing costs for euro area countries. As a result, it is obvious that the ECB considers the current time to be suitable for a more serious increase in rates and hopes in this way to significantly reduce the rapid inflation by autumn, bringing it to the target of 2.0% in 2023.

 

 

Despite the external pressure, EUR/USD is holding within the global downward channel and is now forming another wave of corrective growth. Technical indicators gave a signal for the beginning of the correction: fast EMAs on the Alligator indicator are actively approaching the signal line, and the AO oscillator histogram is forming upward bars.

 

Support levels: 1 , 0.9752 | Resistance levels: 1.0277, 1.0586