Date - 26th July, Friday, 2024
01 - Key News Insights
Daily Digest
Key Economic Data:
- Q2 GDP: Preliminary reading showed the US economy expanded faster-than-expected at 2.8%, driven by strong consumer demand but below the 2021-2023 average of 3.1%.
- Initial Jobless Claims: Latest data came at 235K lower than previous 245K, but roughly in line with forecasts of 237K.
US 10-Year Treasury Yield Holds Decline
- The yield on the 10-year Treasury note held its sharp decline to hover at the 4.2% mark on Thursday, retreating from the two-week high of 4.3% touched in the prior session, despite a batch of strong economic signals released by the BEA.
Monetary Policy Expectations:
- Markets see a 100% chance of a Fed rate cut in September.
- At least one more reduction anticipated before the end of the year.
Investor Focus on the Upcoming Key US Economic Data:*
- June PCE Price Index Report: The Fed’s preferred inflation gauge, to be released on Friday.
- The personal consumption expenditure price index in the US likely rose 0.1% month-over-month in June 2024, following a flat reading in May.
- The core index, which excludes food and energy, is also set to rise 0.1%, the same as in May.
The Dollar Index (DXY)
- Dollar Index remain steady around 104.3 on Friday, after facing heightened volatility in recent sessions.
- DXY, experienced a mild surge after a stronger-than-expected Q2 GDP report, balancing out previous losses and finding stability at 104.30.
- US dollar remained under pressure amid bets on a Bank of Japan rate hike next week.
EUR/USD
- EUR/USD is gaining recovery momentum above 1.0850 in the early European session on Friday. The pair stays underpinned by the renewed US Dollar weakness, as risk sentiment rebounds ahead of the key US PCE inflation data.
GBP/USD
- GBP/USD is holding mild gains above 1.2850 in early Europe on Friday, helped by a broadly weaker US Dollar amid a risk reset. The Fed-BoE divergent policy outlooks continue to favor the Pound Sterling. Traders look to the US PCE inflation data for fresh directives.
USD/CAD
- USD/CAD breaks its winning streak that began on July 17, trading around 1.3810 during the Asian session on Friday. The pair retreated from an eight-month high of 1.3849, a level recorded on Thursday. This downside of the USD/CAD pair is attributed to the weakening of the US Dollar ahead of the release of the US PCE Price Index for June.
02 - Economic Calender
03 - Previous Day Performance
04 - Instructions/Guidelines for executing suggested trade
- Close your trades within 8-10 hours or before 6:30 PM UTC (midnight IST), regardless of profit/ loss.
- By chance, if you face losses in your “Primary Trade”, the “Alternative Call” is designed to recover those losses.
- That’s why, always place the “Alternative call” alongside the “Primary Call”.
- In case the “Alternative or Recovery Call” doesn’t get triggered the same day, a new call (or signal) will be provided the following day.
- Generally, the Global Market Outlook Report includes signals with a higher reward-to-risk ratio (from 2:1 and higher).
- Therefore, consider booking partial profits in steps as follows:
For example, if the reward is two times the risk (or 2:1), consider booking half (or 50%) of the profit when levels reach a 1:1 ratio, and maintain the remaining position.Then, when prices reach twice the risk (2:1), book the remaining 50% position.
To make this process seamless and smooth, consider placing two calls simultaneously with the same Stop-Loss (SL) and Entry-Level but different Target-Levels.
Note: These guidelines aim to optimize your trading strategy while managing risks effectively.
05 - Gold Analysis
Overview: Gold’s primary trend is bullish, but the H4 chart shows a bearish outlook. The price is near support and might reverse up to 2400 as it follows a descending channel. This potential reversal creates a buying opportunity for day traders.
Biasness: Gold’s price fell to its support area after reaching an all-time high. It’s now attracting buyers, Price reversal indicating bullishness PCE data
Key Levels: R1:2387 R2:2400
S1:2365 S2:2350
Primary Driver of Gold Spot gold rose 0.3% to $2,371.23 an ounce. Traders are awaiting PCE data, which might favor buyers if it exceeds the forecasted figure. Technically, price support has been tested, and prices have moved upward.
Technical Analysis: The 50 EMA indicates bearishness, and the MACD is signaling a sell due to increased divergence. However, more buyers could emerge if convergence increases or if a candle touches or forms above the 50 EMA.
Data Releases: PCE data is due today, with forecasts at 2.5% compared to the previous 2.6%. If the actual data exceeds the forecast, it might favor gold buyers. Previously, a decrease in these figures led to a drop in gold prices.
Alternative Scenario: If gold price moves down or break down the support then sellers will active below the 2365 sellers can target till 2350.
While writing the report, gold is trending at 2370.00
06 - Crude Oil
Overview: The primary trend of Oil is up-trend. On lower time frame, Oil prices rose from 76.90 to 79.20 on Thursday. Oil is trading just above the 79.00 mark, up over 0.10% for the day.
Biasness: A bullish flag pattern is visible on the 1-hour chart and prices are consolidating in a range of 79.30 and 78.90, if prices break upward, oil may rise further.
Key Levels: R1: 79.50 R2:79.70
S1: 78.75 S2: 78.50
Indicator: Oil’s current position traded above the middle Bollinger Band (78.53), indicating strength and the lower Bollinger band coincides with the strong support level of 76.82, oil prices bounced back from this level.
Data Release: Traders await Core PCE data. If the data comes in lower than expected (0.1%), then USD will be negatively impacted and oil prices may rise.
Alternative Scenario: If OIL is crossing an immediate support mark of 78.75, and traded below the middle Bollinger band, then a short term bearish view can be expected.
While writing the report, Oil is trading at 79.10
07 - GBP USD
Overview: The primary trend of the pair on a weekly timeframe is sideways, but the prices on a 4H chart are following a declining trend and the prices are consistently falling since last mid-week. During Friday’s Asian session, the pair is trying to recover taking support of the declining trendline.
Biasness: On Friday morning in Europe, GBP/USD is maintaining modest gains above 1.2850, supported by a generally weaker US Dollar amid a risk reset. Divergent policy between Fed and BoE continue to favor the GBP.
Key Levels: R1: 1.2882 R2: 1.2900
S1: 1.2845 S2: 1.2815
Indicator: Prices have breached the lower Bollinger band, signaling a bullish reversal, also taken support of the declining trendline.
Macro-Economic Factors: PCE data is due today, with forecasts at 2.5% compared to the previous 2.6%. If the actual data succeed the forecast, it might favor GBPUSD buyers as dollar might weaken.
Alternative Scenario: GBPUSD could see a downswing by breaching immediate support mark of 1.2845.
While writing the report, the pair is trending at 1.2870
LOT SIZE SUGGESTION FOR ACCOUNT SIZE OF $10000 & 2% risk: 0.67
08 - Disclaimer
- CFD trading involves substantial risk, and potential losses may exceed the initial investment.
- Signals and analysis are based on historical data, technical analysis, and market trends.
- Past performance does not guarantee future results; market conditions can change rapidly.
- Consider your risk tolerance and financial situation before engaging in CFD trading.
- Signals are for informational purposes only and not financial advice.
- Each trader is responsible for their decisions; trade at your own risk.
- The report does not consider individual financial situations or risk tolerances.
- Consult with financial professionals if uncertain about the risks involved.
- By accessing this report, you acknowledge and accept the terms of this disclaimer.
Safe trading,
Market Investopedia Ltd
