official Market Update by Solidecn.com

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CAC 40 - French stock market is correcting upwards

Thales Group, a company producing information systems for aerospace, military and maritime applications, recorded quarterly revenue at the level of analysts' expectations in the region of 4.05 billion euros, surpassing the figure of the previous period at the level of 3.74 billion euros; and advertising and communication company Publicis Groupe reflected revenue of 3.07 billion euros, the best result since 2016. Macroeconomic data will also be published today, including Services and Manufacturing PMIs, where a decline to 52.7 points and 50.8 points, respectively, is projected.

The asset quotes are in the global downtrend, approaching the resistance line. Technical indicators have already reversed and issued a new buy signal: the fast Alligator indicator EMAs crossed the signal line from below, and the histogram of the AO oscillator moved to the buy area, forming ascending bars.

Support levels: 6070, 5827 | Resistance levels: 6254, 6568

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In the shares of the American company Snap, which owns the Snapchat application, a global downtrend is developing, and at the moment the quotes of the trading instrument are around 16.00.

On the daily chart, a global downtrend is forming, which is the result of the implementation of the Triangle pattern, and after the price gap with the boundaries of 15 – 22, the price makes attempts to work it out.

On the four-hour timeframe, it is clearly seen that the most serious attempt to close this price gap is taking place right now, since the quotes have already overcome the key level of 15.5 and continue to grow actively. Nevertheless, another serious obstacle for the upward movement is the resistance line of the global trend at 17.00, the overcoming of which will become the main marker of a change in the trend.

Technical indicators are ready to issue a buy signal: the range of EMA fluctuations on the Alligator indicator is trying to begin expanding in the direction of growth, and the histogram of the AO oscillator has already moved to the buy zone.
 

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Crude Oil

Quotes of Crude Oil have continued to decline since the end of last month and have now left the ascending channel, testing the 95.45 mark (Fibo retracement 50.0%). Consolidation of the price below it will allow the movement to continue up to 87.5. The key for the "bulls" is a strong resistance level of 102.5 (the middle line of the Bollinger Bands), the breakout of which will act as catalysts for upward dynamics to the area of 106.25, 112, however, this option is currently estimated as less probable.

Technical indicators point out the continuation of the current trend: the Bollinger Bands and the Stochastic have reversed downwards, the MACD histogram is stable in the negative zone.   

Resistance levels: 102.5, 106.25, 112 | Support levels: 95.45, 87.5, 85
 

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AUDUSD - Upward correction in the asset

At the recent Australian Strategic Business Forum – Melbourne, the head of the Bank of Australia, Philip Lowe, announced a preliminary forecast that inflation in the country would accelerate, and new anti-records may be reflected in the quarterly report, after which another peak in consumer prices will probably have to at the end of the year. Analysts suggest that in the second quarter, the figure will increase from the current 5.1% to 6.3% against the continued decline in key sectors of the economy. Thus, in June, Manufacturing PMI fell to 55.7 points from 56.2 points, and Service PMI – to 50.4 points from 52.6 points a month earlier. In his speech, the head of the financial department also said that the neutral key rate at the current inflation rate should be at least 2.5%, while now it consolidates at 1.35%. Faster labor productivity growth will likely be a catalyst for the higher value.

The price remains inside the Expanding formation pattern on the global chart, rising within the local trend. Technical indicators signal the presence of an upward correction: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has approached the transition level.

Support levels: 0.6855, 0.671 | Resistance levels: 0.6978, 0.712
 

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Crude Oil - Global oil supply continues to rise

The pressure on the quotes of the trading instrument is exerted by messages from Libya, where the growth in the oil production has already exceeded 800.0K barrels per day after the resumption of work at five fields. Also, the national Ministry of Oil and Gas representatives announced plans to increase daily production to 1.2M barrels by next month. Preliminary data on oil supply from Iraq and Saudi Arabia to the EU countries also speak about the stabilization of supply. Thus, Bloomberg reports that Saudi Arabia transports oil by tankers to Egypt, from where it is sent to the European market via the Sumed pipeline. According to statistics, since the beginning of July, the pumping has already amounted to more than 1M barrels of oil per day, which is almost twice as much as last year. As for supplies from Iraq, they are carried out by sea, and in July, the figure here reached 1.2M barrels per day, while the total volume of fuel supplied from the countries of the Middle East was recorded at around 2.2M barrels per day, which also 90% higher than the January value.

On the weekly chart, the price continues to fall towards the support line of a possible downtrend. Technical indicators keep a stable sell signal: fast EMAs of the Alligator indicator move away from the signal line, and the AO oscillator histogram, being in the sell zone, forms new correction bars.

Support levels: 95.62, 88.7 | Resistance levels: 101.1, 108

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XAUUSD - Investors are actively reducing short positions

The current growth was the reaction of traders to the slowdown in the USD dynamics, which has been putting pressure on the quotes of the precious metal for two months now. The proximity of the US Federal Reserve meeting, scheduled for Wednesday, July 27, provoked an outflow of investor capital into conservative gold, which traditionally acts as a safe-haven asset in situations of uncertainty. Of course, if the interest rate is increased by 75 or even 100 basis points, a short-term decline in the trading instrument is inevitable, but after that, the global correction may resume.

On the weekly chart, the formation of a long-term downward channel continues, with dynamic boundaries of 1800.0–1650.0. The price is trying to start a new wave of growth. Technical indicators are holding a sell signal, which is slightly weakening: fast EMAs on the Alligator indicator have begun to approach the signal line, and the AO oscillator histogram is forming new rising bars in the sell zone.

Support levels: 1695, 1650 | Resistance levels: 1741, 1786
 

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Nasdaq 100 - US stock market corrects

The corporate segment of the stock market continues to publish financial statements for the second quarter. So, shares of Snap Inc., owner of the Snapchat messenger, became the leader of the fall yesterday, after the net loss per share increased to –0.26 dollars from –0.22 dollars in the previous period. Quarterly revenue also fell short of analysts' expectations, amounting to 1.1B dollars against the forecast of 1.14B dollars. Meanwhile, financial services firm American Express Co. released positive data with revenue of 13.4B dollars, well above its preliminary estimate of 12.5B dollars, while earnings per share of 2.57 dollars improved its forecast from 2.42 dollars.

The index quotes continue to form a global downward channel, rising towards the resistance line. Technical indicators are in a buy signal: fast EMAs on the Alligator indicator are holding above the signal line and expanding the range of fluctuations. At the same time, the AO oscillator histogram steadily rises in the buying zone.

Support levels: 11816, 11087 | Resistance levels: 12688, 13531

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USDJPY - correction after a five-month uptrend

Despite the decision of the Bank of Japan to leave the interest rate unchanged at a negative level of –0.10%, the trading instrument failed to strengthen its position. Instead, the quotes began to decline and broke through 136.7, initiating a correction after a strong five-month uptrend. At a subsequent press conference, the head of the regulator, Haruhiko Kuroda, said that the country's financial authorities would continue the current "dovish" course and maintain an ultra-loose monetary policy, responding appropriately if the market situation required it. According to Kuroda, the economic risks are currently skewed to the downside, as growth rates are not keeping with the acceleration of inflation but will eventually be balanced. The main goal of the current policy is to increase the population's income and fix inflation above 2%, the official stressed.

The long-term trend remains upwards. However, the instrument is heavily overbought, which led to an inevitable correction, as a result of which the traders broke through the support level of 136.7. Now the decline target is 134.55. In case of its breakdown, the downward dynamics will intensify to the area of 131.4. The medium-term trend is upwards. At the moment, the instrument is correcting, trying to test the key trend support 135.24 – 134.84, after which traders should consider new long positions with the target at the July high of 139.30.

Resistance levels: 136.7, 139, 141 | Support levels: 134.55, 131.4

 

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EURUSD - The development of the energy crisis increases pressure on the euro

The European economy continues to slide smoothly into recession, and one of the key factors in the current downturn is the rapid development of the energy crisis. So, yesterday, the Russian company Gazprom, which supplies gas to the EU countries, announced that one of the turbines of the gas pipeline would be stopped for repair, and the total volume of pumping from July 27 will decrease to 33M cubic meters per day. Thus the low level of supplies will be corrected by almost half. The head of the European Commission, Ursula von der Leyen, called on the leadership of the EU states to prepare for a complete halt in supplies from Russia against the background of the sanctions policy. To avoid critical consequences, the official announced the need to save resources even in those territories where dependence on Russian resources is insignificant. Earlier, a document was presented: it obliged all states of the region to submit projects for a voluntary reduction in gas consumption by 15% by the end of March next year by the end of September this year, which was criticized. Yesterday, there were reports of numerous adjustments being made to adapt to a particular country's needs. Today, the project was agreed upon at a special meeting of EU energy ministers in Brussels.

Despite serious pressure, the EUR/USD pair is within the global downward channel, approaching the resistance line. Technical indicators continue to hold a sell signal, which is gradually weakening: fast EMAs on the Alligator indicator are approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0130, 0.9952 | Resistance levels: 1.0278, 1.0494
 

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NZDUSD - New Zealand households face rising cost of living

Yesterday, Statistics New Zealand (Stats NZ) published data on the cost of living index for various household groups, noting an increase in the indicator in June of this year by 7.4% compared to the same period in 2021. Thus, the cost of living for households with high average expenses increased by 8.1%, and for households with low expenses – by 6.5%, reflecting the most rapid negative dynamics since 2008, the key drivers of which, as noted, were high tariffs for gasoline and utilities.

The NZDUSD pair continues to trade within a global downtrend, gradually rising towards the local resistance level. Technical indicators are ready to reverse and signal to start buying: fast EMAs on the Alligator indicator have almost reached the signal line, and the AO oscillator histogram has moved into the buying zone, having formed the first rising bar.

Support levels: 0.6213, 0.6062 | Resistance levels: 0.6315, 0.6421
 

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S&P 500 in anticipation of the publication of corporate reports

Today, several major players in the US market will present data on the results of the second quarter. Thus, the world leader in information technology, software, and IT services, Microsoft Corp., expects revenue growth at 52.43B dollars, higher than 49.36B dollars shown a quarter earlier. In turn, the Alphabet Inc. holding, which owns the Google brand, predicts a figure of 70.04B dollars against 68.01B dollars. Visa Inc. will record quarterly revenue in the region of 7.06B dollars, which is in line with the 7.19B dollars shown in the previous period.

The index quotes are traded within a global downward channel, heading towards the resistance line. Technical indicators keep a stable buy signal: fast EMAs on the Alligator indicator are above the signal line, and the AO oscillator histogram is in the buy zone, continuing to form rising bars.

Support levels: 3907, 3674 | Resistance levels: 4013, 4182

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USDCHF - the decision of the US Federal Reserve will determine the direction of the pair's dynamics

Against the background of the correction of the American currency, the USDCHF pair is falling and is approaching the key support for the long-term uptrend around 0.9520. Investors are closing long positions on the dollar ahead of the US Federal Reserve meeting tomorrow, believing that the regulator may retreat from earlier plans and raise interest rates by fewer basis points than analysts expect.

The fears of traders are also caused by the falling incomes of large technology companies and a decrease in overall consumer demand. Tomorrow at 14:30 (GMT+2), June data on the volume of orders for durable goods in the US will be published, a leading indicator of industrial activity. Experts predict a decline in the index by 0.4% MoM, while the Core value will add only 0.2%. However, the strength of the dollar should not be underestimated. Suppose the US financial authorities do not deviate from the "hawkish" rate and increase the interest rate by 75 basis points or more. In that case, the national currency will continue its upward dynamics, and the USD/CHF pair will rush up to the 0.9850 area.

As for the Swiss franc, it is under pressure due to the difference in interest rates between Switzerland and the US. The Swiss National Bank does not intend to adjust the indicator until September; now, it is at a negative value of –0.25%. Tomorrow, investors will pay attention to retail sales data; if the value rises, the franc is likely to strengthen its position slightly, and the USDCHF pair will approach 0.9520.

The long-term trend remains upward. The key support level is around 0.9520, and while the asset is trading above it, it is worth considering long positions with the target at 0.9850. If the level of 0.9520 is broken down, then the USD/CHF pair will continue its downward trend with the target at 0.9363. The medium-term trend is downward. Last week, market participants reached the target zone 0.9608–0.9595. In case of breakdown of which, the quotes of the instrument will fall to the area of 0.9475–0.9462. The key resistance of the trend is shifting to 0.974 – 0.9227, from where new sales may be considered.

Resistance levels: 0.9850, 1.004 | Support levels: 0.9520, 0.9363
 

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Silver Technical analysis

H4
On the four-hour chart, there is a long-term consolidation of the asset in the range of 18.12–20, and at the moment, above 18.12, the quotes have formed a Morning star candlestick analysis model, which is a reversal formation at the bottom. Also, an Inverted hammer pattern has formed, the green color of which emphasizes the "bullish" strength. The combination of these figures indicates that the trading instrument has reached the bottom and a high probability of further recovery to the resistance level of 20.56, the breakout of which will increase the upward dynamics to the zone of 22.16−24.22. An alternative scenario is possible if the "bulls" fail to hold the key level of 18.12. The instrument may drop to the range of 16.57–14.6.

D1
On the daily chart, the falling Wedge price pattern is being completed. The fact that the asset has reached the bottom is also indicated by the appearance above the support level of 18.12 of a series of Hammer and Inverted hammer figures. Also, the confirmation of the increasing activity of buyers can serve as a model of a "bullish" Belt hold. In this situation, the probable scenario of the price movement seems to be the breakout of the upper border of the Wedge with further growth to the area of 20.56−24.22.

Support levels: 18.12, 16.57, 14.6 | Resistance levels: 20.56, 22.16, 24.22

 

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GBPUSD - The market is waiting for the US Federal Reserve meeting

However, the current trend is not a consequence of the strengthening of the British currency since the fundamental background is still rather negative. Yesterday, Reach, the publishing house that owns the Daily Mirror and Daily Express newspapers, reported a significant reduction in the number of pages in printed versions due to a record increase in the cost of paper, which in turn is a consequence of the current energy crisis and rapid inflation. According to The Guardian, the publisher's newsprint spending increased by 65%, leading to a 6.0% decline in pages in popular newspapers in the second quarter, the lowest since the acute phase of the COVID-19 pandemic. The increase in the cost of consumables was the driver of Reach Plc. profit drop by 31% in six months. As for the macroeconomic statistics, yesterday, July data on the change in the volume of retail sales from the Confederation of British Industrialists (CBI) were presented, which was poor: the indicator strengthened the negative dynamics from –4 points to –5 points but preliminary estimates for August statistics were even worse, reaching –14.0 points.

The trading instrument moves within the global downward channel, reversing upwards. Technical indicators continue to weaken the current sell signal: indicator Alligator’s EMA oscillation range narrows, and the histogram of the AO oscillator forms ascending bars, approaching the transition level.

Support levels: 1.1992, 1.1762 | Resistance levels: 1.2107, 1.2355
 

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USDJPY - Bank of Japan continues buying bonds

As previously reported, officials kept the interest rate at a negative value of –0.1% and announced their intention to continue buying government bonds from the market without setting a cap to consolidate their yield around 0 %. In particular, the bank will purchase 10-year bonds every working day at a consolidated rate of 0.25% for an unlimited amount. In other words, the agency will continue to provide over-issuance, which is observed at the moment and may be one of the reasons for the local strengthening of the yen against the major world currencies.

Yesterday, the Japanese government, in its economic report, gave an optimistic assessment of the development of the national economy against the backdrop of increased consumer activity. Indicators are expected to return to growth in the second quarter after falling at the beginning of the year, although the pace continues to be affected by prolonged disruptions in the supply chains of high-tech devices that are exported from the country, rising raw material costs, and fluctuations in financial markets.

The trading instrument moves within the global uptrend. Technical indicators keep a weakening buy signal: indicator Alligator’s EMA oscillation range narrows and the AO oscillator histogram forms new downward bars, approaching the transition level.

Support levels: 136.05, 133.78 | Resistance levels: 137.77, 139.39
 

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USDCAD - The instrument continues its downward correction

Yesterday, traders only paid attention to the June data on wholesale sales, which increased by 0.5%, yielding analysts' forecasts of 2.0%. On Friday, Statistics Canada will publish May GDP data, which for the first time in the last nine months, may slow down to –0.2%. However, given the increase in April by 0.3%, there is no talk of a recession in the national economy since the quarterly value, in this case, will be adjusted to 0.1%.

On the weekly chart, the price is trading within a wide ascending channel with dynamic boundaries 1.26 – 1.32 and is falling towards the support line. Indicator Alligator's EMA oscillation range expands downwards, and the histogram of the AO oscillator forms new downwards bars, moving into the sell zone.

Support levels: 1.2816, 1.2644 | Resistance levels: 1.2936, 1.3052
 

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AUDUSD, H4
On the four-hour chart, at 0.6860, there is the formation of the Three advancing white soldiers pattern, meaning buyers have seized the initiative and intend to restore positions. In turn, the appearance of the Three “bullish” steps pattern also signals the continuation of the upward dynamics, and the “bullish” Marubozu pattern indicates the predominance of “bullish” sentiment. In the current situation, the asset will most likely continue to recover to the resistance level of 0.7037, which will allow the quotes to head to the zone of 0.7191−0.7397. An alternative scenario is possible after the consolidation below the support level of 0.6860, and then the downward movement may intensify to 0.6437.

AUDUSD, D1
On the daily chart, a Falling wedge price pattern is being formed, from which the asset managed to break up, but its implementation has not yet been completed. The “bullish” mood for the instrument is also confirmed by a series of formed Three “bullish” steps figures, which serve as signals for the continuation of the uptrend. Most likely, the trading instrument will strengthen the upward dynamics to 0.7037, consolidation above which will become a catalyst for the movement of quotations to the area of 0.7191−0.7397.

Support levels: 0.686, 0.6686, 0.6437 | Resistance levels: 0.7037, 0.7191, 0.7397

 

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Visa - Technical analysis

The shares of Visa Inc., the largest American multinational company that provides payment services, are developing a corrective trend, and the instrument is trading around 209. On the daily chart, a global Diamond pattern with border levels of 187–230 is developing, and at the moment, the price is clamped inside its limits.

On a four-hour chart, a Volumetric candle candlestick analysis pattern appears with local resistance located around 216.60, from where buy positions may be formed, and a support level of 199.9, from which new sell positions may be opened. In case of orientation to the signals of the pattern, the readings of technical indicators do not need to be considered. Still, at the moment, they signal a possible continuation of growth: indicator Alligator's EMA oscillation range is directed upwards, and on the AO oscillator, the histogram is in the buy zone.

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Johnson & Johnson

On the daily chart, the price holds within the global ascending channel with dynamic boundaries of 170–190 and, reversed at the support line, is trying to consolidate within the uptrend.

On a four-hour chart, it is seen that the channel support line coincides with the multi-year level of 170, which the quotes of the trading instrument have already tested more than ten times. It indicates the presence of large volumes in the area, which makes the probability of crossing the line extremely low. The key resistance for the upward momentum is the June local high of 182, towards which the price is moving.

Technical indicators signal in favor of a likely continuation of growth: fast EMAs on the Alligator indicator began to approach the signal line, and the AO oscillator histogram is approaching the transition level, forming new rising bars.
 

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EURUSD - The decision of the US Federal Reserve disappointed investors

This week, within the framework of an extraordinary meeting, the energy ministers of the EU countries reached a compromise on the issue of reducing the consumption of "blue fuel" by 15% from the average level over the past five years. The emergency plan, developed in the event of a complete cessation of energy supplies from Russia, assumes a decrease in the volume of gas used in the upcoming winter heating season, starting from August this year to the end of March 2023. The driver for the decision was the reduction in the volume of fuel transported through the Nord Stream gas pipeline to 1/5 of the throughput capacity due to technical work carried out on the gas turbine engine. The market took this as a signal of an escalation of political tension between Russia and the European Union. Nevertheless, despite the decrease in the volume of supplies, the filling of gas storage facilities continues and, according to experts, may reach 80% by November 1. As for the state of the economies of the EU countries, the situation continues to deteriorate, and, as shown by the German consumer climate index for August, the decline in the indicator increased to –30.6 points, which is the absolute minimum in the history of observations.

The trading instrument moves within the global downward channel, rising towards the resistance line. Technical indicators hold a sell signal, which is weakening: fast EMAs on the Alligator indicator is approaching the signal line, and the AO oscillator histogram continues to form upward bars.

Support levels: 1.0112, 0.9952 | Resistance levels: 1.0259, 1.0494