On the daily timeframes, the bears' local victory has already manifested itself in the active oil sell-off at the touch of the 200-day average last week. On the other hand, oil has so far managed to avoid a violent emotional sell-off on breaking this level, in contrast to how it was at the end of May, as well as in February and November.

Oil has so far failed to ride the favourable news background with the tightening geopolitical tensions in the Middle East. In the second half of last week, reports of a 3.7 million drop in commercial inventories to 436.5 million (-4.5% y/y) also failed to attract buyers.

Among the moderately negative factors for oil were a rise in the number of oil drilling rigs by 3pc to 482 and a continuation of record US production at 13.3m bpd.

However, the most important selling factor is the signs of a cooling economy that the market fears. So far, this has manifested itself in a slowdown in consumer spending, reduced price pressures, and weak home sales.

This week, the market will face how the Fed assesses the trajectory of the economy on Wednesday and housing market data later in the week. This is a strong enough set to trigger a sell-off in oil or, conversely, to convincingly support buying.

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Central Bank meetings this week are a reason for volatility
The week ahead will be packed with significant economic events, so the market behaviour could turn into quite a bumpy ride this week.

On Wednesday morning, the Bank of Japan will announce its rate decision and the parameters of its balance sheet asset purchase programme. On average, the purchases are expected to be halved, but the key rate is not expected to change. At the same time, the central bank may go for a second rate hike to 0.25% after the March hike from -0.1% to +0.1%.

Sharper cuts in balance sheet buying are not ruled out. This is a potentially positive turn of events for the yen. In previous months, the Bank of Japan has been criticised for its loose policy weakening the yen, leading to currency intervention. Tightening monetary policy is a less costly way to support the currency without selling off international reserves.

USDJPY retreated below 152 last week, approaching the 200-day average and the area of the highs of October 2022 and November 2023. The Bank of Japan's actions will determine whether the former resistance has become support or if the Yen bears will finally have their backbone broken.

No actual policy changes are expected from Wednesday night's Fed rate decision. Still, observers will dive into studying the accompanying commentary changes to gauge the chances of a rate cut in September and the number of those cuts before the end of the year. Rate futures give a 10% chance that the rate will be 50 basis points lower in September than it is now, which is excessive. Slightly less excessive is the market's estimate of a 63.5% chance of 3 or more rate cuts before the end of the year. Approaching that probability to 100% or moving to expectations of two cuts promises to be a major field for Fed "expectations management". A shift to soft sentiment is a market risk: bearish for the dollar and bullish for equities. A surprise tighter rate approach has the potential to set off a spiral of dollar gains and a sell-off in risk assets.

On Thursday, all eyes are on the Bank of England rate decision. The chances of a cut are barely over 50%. If it stays this way until Thursday, any outcome will cause a surge of volatility in the markets of England and pairs with the pound. GBPUSD has added over 3% since the start of the month to 17 July but has squandered half of that gain since then. This could well be a tactical retreat before a fresh attempt to break 1.30, which failed in mid-July. Bank of England's softness has the potential to erase last month's gains in GBPUSD rather quickly, pushing the pair back to 1.26.

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#WaveAnalysis

#AUDCHF reversed from key support level 0.5735;

Likely to rise to resistance level 0.5850.

AUDCHF currency pair recently reversed up with the daily Japanese candlestick Piercing Line from the key support level 0.5735 (the previous monthly low from April, as can be seen below).

The support level 0.5735 was strengthened by the nearby lower daily Bollinger Band.

Given the strength of the support level 0.5735 and the still oversold reading on the daily Stochastic indicator, AUDCHF currency pair can be expected to rise further to the next resistance level 0.5850.

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#WaveAnalysis

#USDJPY reversed from support level 151.95;

Likely to rise to resistance level 155.00.

USDJPY currency pair recently reversed up from the powerful support level 151.95 (former major resistance from 2022 and also the yearly high from last year), standing close to the 50% Fibonacci correction of the upward impulse from 2023.

The upward reversal from the support level 151.95 stopped the previous minor correction 4.

Given the clear daily uptrend, USDJPY currency pair can be expected to rise further to the next resistance level 155.00.

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The #crypto market pulled back 3% to a cap of $2.4 trillion, erasing gains for a while due to the Bitcoin 2024 conference.

#Bitcoin spent a few seconds above $70K on Monday before undergoing a powerful sell-off that took its price below $66K at the peak of the decline in Asian trading on Tuesday. The market was pressured by reports that the US government had put 30K Bitcoins ($2.1bn) into circulation.

One can only wonder whether this is part of a trend following the Mt Gox and German government sales, a game of anticipation before Trump came to power and banned these sales, or whether it's all about the "high price." Only further transactions will help us to find an answer. There are believed to be over 203k bitcoins on the balance sheet, a concentrated sale of which could sell off the market.

Technically, yesterday's breakout of resistance by Bitcoin may still be false, and the latest rise slightly changes the angle of the downtrend but does not break it.

📊 Eurozone GDP grew by 0.3% q/q and 0.6% q/q, showing some acceleration and exceeding average forecasts.

💲July inflation estimates were also released today across the euro region.

💶 Contradictory European data poisoned EURUSD to test the round level of 1.08.

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#WaveAnalysis #SP500

▪️S&P 500 index reversed from support zone

▪️Likely to rise to resistance level 5585.00

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#WaveAnalysis

▪️ #EURNZD under bearish pressure

▪️Likely to fall to support level 1.8045

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#Crypto

▫️The crypto market cap went back to $2.30tr, forming another lower local peak.
▫️#Bitcoin near $63.7K on Thursday, once again near the 50-day MA
▫️Mt.Gox-related wallets still hold 80,128 BTC worth $5.32bn.

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#WaveAnalysis

▪️ #EURAUD reversed from long-term resistance level 1.6670

▪️Likely to fall to support level 1.6400

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#WaveAnalysis

▪️ #Gold reversed from resistance zone

▪️Likely to fall to support level 2400

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#Crypto

▫️The crypto market lost 0.75% in 24 hours to $2.29 trillion

▫️#Bitcoin managed to push back from the 50-day MA

▫️#Solana ecosystem surpassed #Ethereum for the first time in terms of trading volume on DEX

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#NFP #EconomicReview

▫️The US economy added 114K jobs in July;

▫️Wage growth also missed expectations;

▫️Unemployment rate rose from 4.1% to 4.3%;

▫️Markets access chances of more than 3 rate cuts in 2024;

▫️Untypically, US Dollar weakens along with stocks.

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#WaveAnalysis #SPX

– S&P 500 Index under bearish pressure

– Likely to fall to support level 5200.00

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#Crypto

▫️ The cryptocurrency market lost 27% in a week to cap at $1.79

▫️ #Bitcoin plunged to $49K on Monday, risking breaking important cyclical support

▫️ All this is happening against the background of Bitcoin's "institutional acceptance" growing rapidly. What a cold reception.

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#Review

▫️ There is classic risk-aversion in the markets

▫️ Judging by the VIX, fear is really high.

▫️ Dow Jones, S&P500, Nasdaq100 at risk of falling to 200-week MA

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#WaveAnalysis

▫️#Nikkei225 reversed from support level 30600;

▫️Likely to rise to resistance level 35000.

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