Solid ECN | Professional Market Analysis | *Video*

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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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Solid ECN Market Analysis

USDCHF, H4
On the four-hour chart, the Three "bearish" steps downwards trend continuation pattern is formed, which signals increasing sales. However, the asset has also formed the Doji rickshaw model. This figure means that the forces of "bulls" and "bears" are equal at the moment, but its appearance in a local base can mean both a reversal of quotes up and a continuation of the downward movement. In the current situation, the decrease to the support level of 0.9538 seems more likely, which breakdown will allow sellers to move into the range of 0.9410–0.9167. An alternative option is possible after the price breaks the upper border of the trend channel and the resistance level of 0.9667 with the growth target at 0.9828–1.0032.

USDCHF, D1
On the daily chart, at 0.9828, Shooting star and Hanging man reversal patterns are forming, from where the asset rushed down. Also, a series of Three "bearish" steps candlestick analysis patterns have formed, which are models for the continuation of a downtrend. Probably, the asset is trying to test the key support level of 0.9538, and if the "bulls" fail to hold it, then the movement will continue to the area of 0.9410–0.9167.

Support levels: 0.9538, 0.941, 0.9167 | Resistance levels: 0.9667, 0.9828, 1.0032

 

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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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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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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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USDCAD: the pair is down 2.3% from July highs

On July 13, the regulator raised the interest rate by 100 basis points to 2.5%. However, the markets expected conflicting inflation figures. According to macroeconomic statistics, CPI was recorded at 6.2% YoY, higher than the analysts' forecast of 5.9% and the previous value of 6.1%, but standard inflation slowed down in June. The indicator was lower than the forecast of 0.9% MoM and the May value of 1.4%, probably due to the seasonal factor and the adaptation of enterprises to the new conditions of monetary policy.

The long-term trend in the USDCAD pair remains upward. The key support for the trend is at 1.2835, and market participants tested it last Friday, which resulted in quotes rising to the 1.2938 area. Accordingly, for the upward dynamics to continue, buyers need to break through it. Otherwise, the USDCAD pair is expected to decline and renew the July low of 1.2835.

The mid-term trend changed to a downtrend last week. Traders broke through the key trend support 1.2996–1.2974. The sell target zone is 1.2777–1.2756. The key trend resistance is shifting to 1.3064–1.3042. If the participants overcome it within the correction, it will be possible to consider short positions with the first target at the last week's low.

Resistance levels: 1.2938, 1.3065, 1.3157 | Support levels: 1.2835, 1.2525​

 

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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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USDCAD - Technical analysis​

H4
On the four-hour chart, after the "morning star" candlestick analysis model appeared at 1.2868, the trading instrument showed a slight increase to the area of 1.2940, but the "bulls" did not manage to consolidate above it. It is worth noting the activity of the "bears" at 1.2826, where the "inverted hammer" pattern formed, signaling that buyers are set to restore their positions. A likely scenario in the current situation is an upward trend around 1.2868, the impulse breakdown of which will allow the quotes to go to the range of 1.2940 – 1.3127. A decrease in the asset is possible if the "bulls" fail to keep the key support level of 1.2781, and then the pressure on the price will increase, which will allow sellers to continue moving towards the zone 1.2634 − 1.2436.

D1
On the daily chart, there is a formation of a "bear flag" price pattern, which could not be fully realized since at 1.2868, a "hammer" candlestick analysis reversal pattern was formed, as a result of which there is an impulsive downward movement. However, the figure has a pronounced "bullish" structure and warns the "bears" about the probable price rebound back to the 1.2868 – 1.3127 zone.

Support levels: 1.2781, 1.2634, 1.2436 | Resistance levels: 1.2868, 1.2940, 1.3127​

 

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The ETHUSD pair continues to trade within a wide long-term downward channel. However, over the past two weeks, the cryptocurrency has shown significant growth, adding about 66%, and consolidated at 1660. However, the quotes failed to stay in this area and resumed the decline.

For the development of downward dynamics, the digital asset needs to fall below the support zone of 1375 − 1345 (the middle line of Bollinger bands). In this case, the downside targets will be 1250 and 1125, and 1000. The key “bullish” level is 1625, the breakout of which will allow quotes to continue moving to the area of 1750, 1885 Fibonacci correction 38.2%).

Technical indicators do not give a single signal: Bollinger bands are directed upwards, Stochastic reversed downwards, while the MACD histogram is stable in the positive zone. Given the long-term trend, a continuation of the price decline soon seems to be a more likely scenario.

Resistance levels: 1500, 1625, 1750, 1885 | Support levels: 1345, 1250, 1125, 1000​

 

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AUDUSD - Inflation in Australia may accelerate​

The AUDUSD pair started the week with an upward movement and is currently testing the level of 0.6958. However, consolidation above it seems less likely, as investors refrain from opening new trading positions, waiting for two key releases on Wednesday – the publication of inflation data in Australia and the decision of the US Federal Reserve on the interest rate.

Thus, Q2 CPI is likely to be poor: the indicator will consolidate around 6.1–6.3% YoY, which is twice the target of the Reserve Bank of Australia (2.0–3.0%) and thus will reach the high since 1990. Implementation of the forecast or its exceeding will confirm the fears of the head of the regulator, Philip Lowe, who recently stated that “psychological inflation” is forming in the country when consumers rush to spend available capital, expecting further price increases, which only exacerbates the negative dynamics, which, in turn, could push agency officials to accelerate the pace of interest rate adjustments to 75 basis percentage points, increasing the risks of the national economy going into recession.

The trading instrument is within the long-term downward channel, and now the price is testing 0.6958, consolidation above which will allow quotes to strengthen to the area of 0.708. Otherwise, the price decline will resume to 0.6835, 0.6713. Technical indicators do not give a single signal: Bollinger bands are horizontal, Stochastic is leaving the overbought zone, forming a sell signal, and the MACD histogram is preparing to move into the positive zone.

Resistance levels: 0.6958, 0.708 | Support levels: 0.6835, 0.6713, 0.6591​

 

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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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Crude Oil - Prices hold above 95 dollars per barrel​

Thus, according to the American Petroleum Institute (API) statistics, the indicator decreased by 4.037M barrels, which was four times lower than the analysts' forecast. However, traders are concerned about the possible pressure on the instrument after the increase in interest rates by the US Federal Reserve, whose meeting will be held today. Due to the active strengthening of the dollar, goods denominated in US currency will become more expensive for buyers from other countries.

Nevertheless, prices are supported by the reduction in the supply of Russian gas to the EU countries via the Nord Stream gas pipeline. Yesterday, Gazprom announced that it would be able to ensure the loading of only 20% of its nominal capacity, which could cause an increase in demand for energy resources, including oil, to replenish the missing volumes partially. The subsequent decision of the EU countries to switch to a regime of reducing gas consumption somewhat restrained the growth of quotations.

Thus, the balance of positive and negative fundamental factors is confirmed by technical analysis. After a decline and an attempt to break through 95.00 in the middle of the month, oil prices stabilized slightly above the indicated level within the range of 97.00–100.00. However, the long-term trend remains upward, so a new wave of growth may develop after the announcement of the decision of the US Federal Reserve on the interest rate. The target zone will be 105.76–103.55.

The medium-term trend is downwards. Last week, market participants unsuccessfully tried to break through the key trend resistance 100.11–99.25, and as a result, the price returned under it. This week, it is worth considering short positions with the target at the July low of 90.80. The downward scenario will be canceled after the consolidation above 100.11. In this case, long positions with the target at 108.71–107.85 are relevant.

Resistance levels: 103.55, 105.76 | Support levels: 95, 85​

 

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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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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​