Welcome to the Weekly Market Update!
In this edition, we bring you the latest highlights and insights from the world of finance. We will cover the week’s top stories, provide market analysis, highlight economic developments, discuss upcoming events to watch, and present technical analysis. Let’s delve into the key information you need to stay informed and make informed financial decisions.
Top Stories of the Week
- Fitch’s Warning for US Banks: The warning bells are ringing as Fitch Ratings issues a potential downgrade for a slew of US banks, including heavyweights like JP Morgan. This move comes as a result of a comprehensive sector evaluation, and it’s bound to stir discussions.
- Chinese Yuan’s Tumble: The Chinese yuan faced turbulence, sinking to a nine-month low. Weaker Chinese data and renewed concerns over the property sector combined forces, propelling USD/CNH to this year’s peak.
- Gold’s Precarious Dip: Gold took a tumble, hitting a five-month low. A hawkish tone from the July FOMC meeting, where policymakers underscored significant inflation risks, sent gold on a downward trajectory not seen since March.
- Nvidia’s Optimistic Boost: The spotlight is on Nvidia as brokers shower the company with optimism ahead of its earnings report. Multiple price target hikes contribute to a bullish atmosphere, underscoring the anticipation surrounding the tech giant’s results.
- Walmart’s Upbeat Outlook: Retail titan Walmart delivered better-than-expected Q2 profits, prompting a lift in its full-year sales and profit guidance. With FY EPS projected at $6.36-$6.46, up from the previous $6.10-$6.20 range, Walmart leaves a strong impression on the market.
Market Analysis
- Coinbase’s Crypto Futures Approval: The approval for Coinbase to offer crypto derivatives directly to retail customers in the US has significant implications for the market analysis. This move by Coinbase marks a major step towards the mainstream adoption of cryptocurrencies. Market analysts will closely monitor how this approval impacts the overall crypto market, whether it leads to increased trading volume, potential price movements in various cryptocurrencies, and the broader acceptance of crypto derivatives among retail investors.
Economic Highlights
- UK Wages Skyrocket: The exceptional surge in UK wages at a record pace of 8.3% is a crucial economic highlight. This development provides insights into the labor market dynamics and the overall health of the UK economy. The substantial wage growth could indicate increasing consumer spending power and potentially influence inflation trends. Economists and policymakers will analyze this data to assess its impact on the UK’s economic recovery, inflation expectations, and potential implications for monetary policy decisions.
Upcoming Events to Watch
- Jackson Hole Symposium (Aug 24 – 26): Global economic insights unfold as central bankers gather. Key speeches by Powell and Lagarde hint at potential policy shifts.
- Eurozone PMI Data (Aug 23): Eurozone’s health revealed. July’s business contraction and service sector strength offer clues. Input costs eyed for inflation signs.
- Yen Intervention? USD/JPY near 9-month peak due to BoJ-Fed gap. Past intervention levels at 145.00 loom. Japan’s cooling inflation might influence yen’s fate.
- Nvidia Earnings (Aug 23): Nvidia’s surge fuels expectations. Earnings report amid 200% stock rise. Wall Street eyes 66% revenue surge to $11.13B.
- US Retailers’ Earnings: Consumer spotlight remains. Lowe’s, Coty, Dollar Tree, Macy’s, Kohls earnings illuminate consumer health amid cooling inflation and rising rates.
Technical Analysis
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
EUR/USD
The EUR/USD exhibits a downtrend with declining peaks and troughs below the 50 SMA. On daily charts, prices show a downtrend while the 50 SMA remains steady, suggesting recent sideways movement. Key support lies at 1.0820, with June’s low at 1.0650 beneath. Resistance levels are at 1.107 and 1.118.
GBP/USD
The GBP/USD is on a downward path, making lower lows and lower highs beneath the 50 SMA line. While the price dropped below the 50 SMA, it hasn’t continued falling afterward. Two hammer patterns close to 1.26 indicate potential bullish backing. A close above 1.28 confirms the positive move, or else the next support sits at 1.25.
XAU/USD
The XAU/USD is on a downward path, creating lower lows and highs while staying below the 50 SMA line. The RSI, a measure of momentum, is really low, under 35, indicating continued downward movement. Recently, the price reached its lowest point since March. If the price keeps going down, support lies at 1876 and then 1846. On the other hand, if the price goes up, resistance levels are at 1912 and 1942.
XUS500
XUS500 is currently in a downtrend, displaying lower highs and lows while trading below the 50 SMA. The RSI is nearing oversold levels around 35, suggesting possible further downward movement. In case of a decline, support levels are at 4375 and 4300. Conversely, if there’s an upward move, resistance lies at 4450 and then 4515.
Thank you for reading! Wishing you successful trades ahead!
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