This super
week is being overwhelmed by many events and expectations. It is the most
intense week of 2022 so far. Whether all
this action will lead to super market waves within the week is yet to be shown.
Microsoft and Google-parent Alphabet are expected to begin the wave on Tuesday when
they deliver Q2 2022 earnings reports. These are not only the leaders of the
tech sector, but also leaders of the entire stock market. It they meet
analysts’ estimates, stock indexes may have a reason to perform a rally,
especially if Meta Platforms, Apple, and Amazon confirm these positive
expectations by delivering strong earnings reports this week.
The Federal Reserve
(Fed) interest rate decision and the first Q2 U.S. GDP estimate with a possible
recession indication would be the major hurdles for the S&P 500 broad
market index to rise towards 4150-4250 levels. However, strong Big Techs
reports may affect the market in the most positive way, neutralising possible
negative impacts from weak economic data. We may have different scenarios this
week as Big Techs may play a leading role in pushing the market to the upside.
First, moderate
positive earnings reports from Big Techs along with a slight U.S. GDP decline
for the Q2 2022, together with the decision of the Fed to raise interest rates
by widely expected 75 basis points, may deliver a positive upside signal for
stock markets. Mild and fleeting recession in the United States and a less
hawkish rhetoric from the Fed may form positive hopes for investors. There
could be more unpleasant combinations of factors for investors to consider,
like neutral Big Techs reporting, the Fed hiking interest rates by 75 basis
points, and positive number on Q2 U.S. GDP. However, this may also allow U.S.
stock markets to edge higher considering existing technical indications.
The S&P 500 index
has switched to the aggressive technical formation with the targets at
4150-4250 points by the end of this week. It is trading close to the 3960-3980
area. The nearest support is at 3870-3890 points and this may allow investors to
consider some very risky long positions which may cause a possible rally.
Brent crude prices rolled back to $102-103 per barrel
with no signs of a rally, nor of a slide. The timing of an aggressive upside
scenario with the targets at $135-145 per barrel and extreme peaks at $160-170
suggests possible strong price movements in the second half of August. Some buy opportunities could be found at the
support levels of $97-99 per barrel. The resistance at $107-110 per barrel
would be crucial for
the upside scenario to become active, so it should be monitored in this regard.
Gold prices
may have an upside season in August. But this rally could be very risky and
unstable, as gold is more inclined to the downside with a possible plunge to
$1350-1450 per troy ounce by the end of November. So, it would be wise to wait
for gold prices to climb first to $1800-1820 per ounce and only then open short
positions in September.
EURUSD
continues to hover alongside the aggressive upside channel with targets at 1.03500-1.04500
by the end of this week. There are no reliable entry points for any trades so
far.
GBPUSD is
also inside the aggressive upside formation with targets at 1.21500-1.22500
without any reliable entry points. We may expect the situation on the Forex
market to stabilise by the end of the week and receive some directional
signals.