Weekly Market Commentary | 22.07 - 28.07

Monday

• Markets are digesting the unexpected news of Joe Biden dropping out of the presidential race.

• China's central bank surprised the market by cutting the short-term seven-day reverse repurchase rate from 1.8% to 1.7%.

Tuesday

• The day is expected to be quiet with only two major economic data points:

  • Existing home sales from the US, anticipated to be just under 4 million.

  • Richmond Manufacturing Index, forecasted at minus 7.

Wednesday

• A busy day filled with PMI releases from major economies:

  • Eurozone, UK, and US will report their PMIs, providing insights into economic health.

• Additionally, the Bank of Canada will announce its interest rate decision, expected to decrease from 4.75% to 4.5%.

Thursday

• Key economic indicators will be released, including:

  • GDP from the US, projected at 1.9%.

  • Durable goods orders from the US.

  • The day will wrap up with a speech from ECB President Christine Lagarde.

Friday

• The week concludes with significant data releases:

  • Tokyo Core CPI, expected at 2.2%.

  • Core PCE Price Index from the US, expected at 0.2%.

  • Revised University of Michigan Consumer Sentiment, anticipated at 66.6.

Setups for This Week:

Dow Jones

Primary View:

• The last two days have been significantly bearish, indicating the start of a bearish correction.

• The price is nearing key yellow horizontal support and the blue uptrend line. A bounce from these levels would signal a buy opportunity.

Alternative View:

• If the price breaks these supports and closes the week below them, it will be a strong sell signal.

EUR/USD

Primary View:

• The price is forming a head and shoulders pattern with a black neckline. Breaking this neckline would signal a sell, targeting the blue horizontal support at 30.2% Fibonacci.

Alternative View:

• A bounce off the black neckline and a move above the purple resistance would signal a buy.

EUR/JPY

Primary View:

• The price is testing a crucial dynamic long-term uptrend line marked in blue. A bounce and formation of a hammer candle, followed by a move above the yellow resistance, would signal a buy.

Alternative View:

• Closing the day below the blue uptrend line would be a strong sell signal.