Hot forecast for EUR/USD on July 8, 2024

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Although 206,000 new jobs were created outside the agricultural sector, significantly exceeding the forecast of 160,000, the overall content of the US Department of Labor report turned out to be simply appalling. This was mostly due to the downward revision of previous data from 272,000 to 218,000. This means that for three consecutive months, fewer than 250,000 new jobs have been created, which is not even enough to maintain labor market stability. Consequently, the unemployment rate rose from 4.0% to 4.1%. In other words, unemployment has been rising for three consecutive months. This sharply increases the likelihood of interest rate cuts during the upcoming Federal Open Market Committee meeting, which led to the dollar's weakness. The issue lies in the extremely weak data, which were significantly worse than expected.

Considering that today's economic calendar is practically empty, the market will be guided by other factors, particularly the dollar's oversold condition. In addition, the results of the early parliamentary elections in France are likely to disappoint the markets. This is not so much due to the defeat of President Macron's party but rather because of the clear victory of parties that the media describe as far-right. From the perspective of leading business publications, which significantly influence the markets, this is a highly negative factor. Thus, the dollar has every chance to recover some of its recent losses.

EUR/USD closed the week above the level of 1.0800, which in terms of technical analysis is a sign that the market sentiment is bullish.

On the 4-hour chart, the RSI reached the overbought zone and left. Based on the absence of a complete corrective movement, we can conclude that at this time the market is reassessing long positions on the euro.

On the same chart, the Alligator moving averages are headed upwards, which corresponds to the upward cycle.

Outlook

If we focus solely on the technical analysis, keeping the price above the level of 1.0800 may eventually lead to further growth for the euro, on the basis of which it is possible to test the local high of the medium-term trend.

The bearish scenario will come into play in case of a pullback, if the price settles below the level of 1.0800 for at least a 4-hour period.

In terms of complex indicator analysis, the short-term period does not have stable indicators since the price is stagnant. In the daily period, the bullish sentiment is still in force.

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Technical analysis of BTC/USD for July 05, 2024

Technical market outlook :

BTC/USD : Bitcoin

In 2023, our Forecast was :

Uptrend market - strong bullish - Take profit 2 : 29,800 (in 2023).

Now : 05 July 2024. Price at 56k.

Our Forecast (between 6 and 18 months)

BTC/USD increased within an up channel from the area of 50k -56k.

Trading recommendations :

The trend is still bullish as long as the price of 50k is not broken. Thereupon, it would be wise to buy above the price of at 50k with the primary target at the highest price of 73k. The volatility is very high for that the BTC/USD is still moving between 50k and 73k in coming hours. Consequently, the market is likely to show signs of a bullish trend again. So, it will be good to buy above the level of 50k. Then, the BTC/USD pair will continue towards the second target at 84k (a new target is around 91k in the long term).

Alternative scenario :

The breakdown of 50k will allow the pair to go further down to the prices of 30k.

Warning : Risk disclosure: All investments involve a degree of risk of some kind. Trading financial derivative products comes with a high risk of losing money rapidly due to leverage. You should not engage in trading these instruments unless you fully understand the nature of the transactions you are entering into, and the true extent of your exposure. These types of investments may be suitable for some investors, but they are not for everyone

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Analysis of GBP/USD pair on July 5, 2024

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Analysis of GBP/USD pair on July 5, 2024


The wave pattern for GBP/USD remains




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The wave pattern for GBP/USD remains quite complex and ambiguous. A successful attempt to break the 50.0% Fibonacci level in April indicated the market's readiness to form a downward wave 3 or c, but we have only seen increases since then. If this wave does resume formation, the wave pattern will become much simpler, and the threat of complicating the wave structure will disappear. However, in recent weeks, the decline of the instrument has been rather weak, with sellers unable




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Forecast for AUD/USD on July 5, 2024

AUD/USD

The Australian dollar has risen above the resistance level of 0.6730, fulfilling the condition for a divergence with the Marlin oscillator on the intraday timeframe. Without breaking the divergence's potential to turn around, the price may still rise to the target level of 0.6780.

Consolidating above 0.6780 will lead the price to the second target level of 0.6874, which corresponds to the peak of December 28, 2023. If the divergence overpowers the growing trend from the current levels, then once the price moves below the support levels at 0.6690 and 0.6627, we expect the price to reach 0.6467.

On the 4-hour chart, the price has consolidated above the level of 0.6730, while the Marlin oscillator moves sideways. We will find out after the release of the US labor data whether the upward trend will get weaker following the oscillator or it will actually gain new momentum.

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The dollar retreats but refuses to give up

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Fears about Frexit and the related parity in the EUR/USD pair are gradually receding, the yield spread between French and German bonds is narrowing, and Morgan Stanley is even recommending buying significantly cheaper stocks of the Eurozone's second-largest economy. They argue that as the degree of political risk diminishes, these stocks will rise significantly. We shall see, but for now, the euro has reached the first of the two bullish targets at 1.08 and 1.0835.

Dynamics of CAC-40 and the Yield Spread of French and German Bonds

The fact that investors are satisfied with the attempt by the alliance of the New Popular Front and Renaissance to prevent the National Rally from gaining an absolute majority is also evidenced by the results of the auction for the placement of French bonds amounting to €10.5 billion. Demand exceeded supply by 2.58 times, more than at the previous two auctions. If local bonds appeared toxic, who would buy them?

The decrease in political risk is far from the only bullish driver for EUR/USD. According to ECB Chief Economist Philip Lane, the central bank is not entirely convinced that price pressures in the Eurozone have been contained. The central bank has concerns about domestic inflation, which is currently around 4%. Lane is likely referring to service prices. In any case, if the European Central Bank does not rush to take the second step toward monetary easing, the euro will only benefit.

In contrast, the US economy indicates that the Federal Reserve should hurry with easing monetary policy. Bad news comes from repeated unemployment claims, which have been rising for nine consecutive weeks. People are finding it harder to get jobs. The increase in private-sector employment from ADP disappointed, the services PMI fell to a four-year low, and the widening trade deficit suggests that net exports will slow GDP growth in the second quarter.

Dynamics of Repeated Unemployment Claims

Treasury yields fell and the US dollar broadly weakened against major currencies due to the combination of weak data and dovish notes in the June FOMC minutes. The futures market is indicating a 73% probability of a federal funds rate cut in September. If inflation and the economy continue to cool, borrowing costs could drop to 5% by the end of the year.

At the same time, it's too early to count out the US dollar. The chances of Donald Trump winning the presidential race are significant. With the Republican back in the White House, protectionist policies, trade wars, and additional fiscal stimuli could return, which would lend support to the USD index.

Technically, on the daily EUR/USD chart, there is a battle for the upper boundary of the fair value range of 1.0675-1.0805. If the bulls win, it will create an opportunity to increase previously formed long positions in the euro towards $1.0835 and $1.0865.

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Analysis of EUR/USD pair on July 4th. The dollar falls again as America celebrates Independence Day

The wave pattern on the 4-hour chart for the EUR/USD remains unchanged. Currently, we observe the formation of the supposed wave 3 in 3 or c of the downtrend section. If this is indeed the case, the decline in quotes will continue for quite some time, as the first wave of this section ended around the level of 1.0450. Consequently, the third wave of this trend section should conclude lower, even if it takes a non-impulsive form.

The level of 1.0450 is the target only for the third wave. If the current downward section of the trend takes on an impulsive form, then we are looking at a total of five waves, and the euro could fall below the 1.0000 mark. Undoubtedly, it isn't easy to expect such developments right now, but there have been plenty of surprises in the forex market over the years.

An alternative scenario now is to transform wave 3 or c into a corrective form with five waves of the a-b-c-d-e type. Even in this case, the low of wave 3 or c should be below the low of wave 1 or a. Therefore, if wave e in 3 or c is currently forming and not 3 in 3 or c, the instrument's decline should continue.

Two Stumbling Blocks for the US Dollar

The EUR/USD rate fell by 40 basis points on Thursday. For the third consecutive day, demand for the US currency has been declining, but its total drop is still no more than 100 points. Such a movement is not enough to dismiss the dollar. This week, most US reports disappointed market participants. Specifically, the ISM indices showed weaker values than expected. The ADP report was also disappointing. However, if you carefully examine these reports, I cannot conclude that American statistics have completely failed.

The ISM manufacturing activity index was only a few tenths of a point below expectations. The ADP report showed 10,000 fewer jobs created than expected. It's clear to everyone watching the market that a deviation of 10,000 is neither significant nor substantial. It's merely a margin of error. Meanwhile, the number of JOLT job openings exceeded expectations. Therefore, this week's US economic data has not failed.

Yesterday, the ADP and ISM reports tripped up the dollar, but the market was also eager to increase demand for the euro. The wave pattern has not changed due to these movements. Only the internal wave pattern is becoming more complex and extended. Currently, sellers and buyers need more grounds to move the instrument down or up confidently. Therefore, we observe a sluggish tug-of-war with a slight advantage for the sellers.

General Conclusions

Based on the analysis of EUR/USD, the construction of the downward wave set continues. In the near future, I expect the continuation of the construction of the descending wave 3 or c with a significant decline in the instrument. I continue to consider only sales with targets around the estimated level of 1.0462. The internal wave pattern of wave 3 or c may take a five-wave corrective form, but even in this case, quotes should drop to the area of 4-5 figures.

On a larger wave scale, it is visible that the supposed wave 2 or b, which by length made up more than 76.4% of the Fibonacci of the first wave, may be complete. If this is indeed the case, the scenario of building wave 3 or c and reducing the instrument below the 4th figure continues to unfold.

Basic Principles of My Analysis:

* Wave structures should be simple and understandable. Complex structures are difficult to play out; they often change.
* If there is certainty about what is happening in the market, it is better to avoid entering it.
* There is never 100% certainty about the direction of movement. Always use Stop Loss orders.
* Wave analysis can be combined with other types of analysis and trading strategies.


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EUR/USD. July 4th. The euro celebrates the Independence Day of the USA

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EUR/USD. July 4th. The euro celebrates the Independence Day of the USA


On Wednesday, the EUR/USD pair made




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On Wednesday, the EUR/USD pair made a sharp rise to the resistance zone of 1.0785–1.0797 and even consolidated above it. Thus, the growth process may continue towards the next corrective level of 23.6%–1.0843. Consolidation below the zone of 1.0785–1.0797 will favor the US dollar and a slight decline towards the levels of 1.0722 and 1.0760, but after several weeks of desperate struggle, it seems the bears have admitted defeat. The wave situation has become more complicated this week. A




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Forecast of GBP/USD pair on July 4, 2024

On the hourly chart, the GBP/USD pair consolidated above the resistance zone of 1.2690–1.2705 on Wednesday, marking the end of another sideways trend. Now, the pair's growth may continue towards the next resistance zone of 1.2788–1.2801. A rebound from this zone will favor the US dollar and a slight decline towards the zone of 1.2690–1.2705. Consolidation above 1.2788–1.2801 will increase the likelihood of further growth towards the next corrective level of 0.0%–1.2892.

The wave situation remains unchanged. The last upward wave broke the peak from June 4, while the most recent downward wave (formed on June 12) managed to break the low of the previous wave. Thus, the trend for the GBP/USD pair remains bearish. I am cautious about conclusions regarding the beginning of a bearish trend, as bears still show weakness regularly, and the news background often makes their further attacks impossible. This week, they had to retreat due to news from the USA. The bearish trend will officially be broken after the peak of the last upward wave from June 12 – 1.2858 is breached. The pound needs to rise by another 100 points to reach this level.

The news background for the pound was the same as for the euro, as all the major news came from the USA. The same ADP and ISM reports were the main reasons for the bears' retreat. However, it should be noted that the bears had enough time to break through the support zone of 1.2611–1.2620 on their own without relying solely on the news background. They failed to do so, and the bulls couldn't stay out of the market forever. This week, most of the reports from the USA were weaker than traders' expectations, but there is still Friday left. The Nonfarm Payrolls and unemployment reports could yield unexpectedly positive figures, strengthening the US dollar at the end of the week.

On the 4-hour chart, the pair turned in favor of the British currency after four rebounds from the level of 1.2620 and then rose to the corrective level of 61.8%–1.2745. This level is not a strong barrier for the bulls, but a rebound from it might lead to a slight decline. If you look closely at the 4-hour chart, there are no obstacles to the further growth of the pound. The bears couldn't even break the easiest level.

Commitments of Traders (COT) Report:

The sentiment of the "Non-commercial" category of traders became slightly less bullish over the last reporting week. The number of long positions held by speculators decreased by 3,373, while the number of short positions increased by 200. Bulls still have a solid advantage. The gap between the number of long and short positions is 44 thousand: 102 thousand against 58 thousand.

The pound still has prospects for a decline. Graphical analysis has provided several signals of a broken bullish trend, and bulls can't keep attacking forever. Over the past three months, the number of long positions has grown from 98 thousand to 102 thousand, while the number of short positions has increased from 54 thousand to 58 thousand. Over time, major players will continue to shed long positions or increase short positions, as all potential buying factors for the pound have already been exhausted. However, it is important to remember that this is just an assumption. Graphical analysis still shows the weakness of the bears, who can't even break the 1.2620 level.

Economic Calendar for the USA and UK:

The economic events calendar does not contain any important entries on Thursday. Therefore, the impact of the news background on market sentiment will be absent today.

Forecast for GBP/USD and Trading Tips:

Sales of the pound are possible on a rebound from the zone of 1.2788–1.2801 with a target of 1.2690–1.2705. Purchases could have been considered on a rebound from the zone of 1.2611–1.2620 on the hourly chart with a target of 1.2690–1.2705. Then, on a close above the zone of 1.2690–1.2705 with a target of 1.2788–1.2801. The first target has been reached, and the second is almost there.

The Fibonacci level grids are built at 1.2036–1.2892 on the hourly chart and at 1.4248–1.0404 on the 4-hour chart.Pentru mai multe detalii, va invitam sa vizitati stirea originala.

The S&P 500 has not set all records yet

Since the 2022 lows, the market capitalization of the companies included in the S&P 500 has increased by more than $16 trillion. Since the beginning of the year, the broad stock index has jumped 16% and has already marked 33 record highs. However, the current rally is far from the fastest among the bull markets since 1924, indicating untapped potential. Especially with the figure of Donald Trump looming on the horizon.

S&P 500 Dynamics in Bull Markets

According to Deutsche Bank, the corporate profits of the companies included in the S&P 500 grew 13% above Wall Street consensus estimates in April-June. This marks the sixth consecutive quarter in which the indicator has exceeded average forecasts, which is excellent news for bulls of the broad stock index. However, to understand the factors driving its northern march, one must examine the structure.

In the 1970s, the share of industrial enterprises and material suppliers was 26%; now, it has decreased to 10.6%. In contrast, the weight of technology and finance has grown from 13% to 42% over the same period. The technology sector alone accounts for 29%, with 6 of the 7 largest corporations by market capitalization belonging to this sector.

This means that the modern S&P 500 is more sensitive to artificial intelligence and interest rates than to the health of the US economy and corporate profits. It's no surprise that shares of AI-related companies increased their value by 14.7% in the second quarter while others lost 1.2%.

When the market is heightenedly sensitive to interest rates, bad news from the US economy becomes good news for it. Under such conditions, the likelihood of the Fed beginning monetary policy easing soon increases. Indeed, after investors saw disappointing statistics on foreign trade, business activity in the services sector, unemployment claims, and ADP private sector employment, the chances of a federal funds rate cut in September jumped from 63% to 73%. How could the S&P 500 not rise?

If the stock market depends so heavily on rates, reducing the scale of monetary expansion should lead to a faster decline in tech sector stocks compared to others. This is what happened in April.

P/E Dynamics by Sectors of the US Stock Market

With two Fed rate cuts in 2024 and three to four in 2025, the S&P 500 and its dominant tech sector are destined to continue rallying. The main thing is that the US economy does not collapse into a recession.

Technically, on the daily chart, the S&P 500 has finally reached the previously set target for long positions at 5535. As long as the broad stock index trades above its fair value of 5465, bears continue to dominate the market. Use pullbacks to form long positions towards 5650 and 5800.Pentru mai multe detalii, va invitam sa vizitati stirea originala.

S&P 500, Nasdaq at All-Time Highs as Rate Cuts Become Real

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S&P 500, Nasdaq at All-Time Highs as Rate Cuts Become Real


The S&P 500 and Nasdaq hit




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The S&P 500 and Nasdaq hit new records on Wednesday amid data signaling a slowdown in economic growth, raising speculation that the Federal Reserve could cut interest rates in September.
The Dow Jones Industrial Average ended the day marginally lower, weighed down by selling in health care and consumer staples during the shortened trading session ahead of the Fourth of July holiday. The market will be closed Thursday for Independence Day, limiting trading volume this week.
ADP employment reports and weekly jobless




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