Stocks
continue up last week after Personal Consumer Expenditure (PCE) Index slowed
down to 3.0% YoY in June, beating a forecast at 3.1%. This is a significant
slowdown from 3.8% in May. Retail investors are seem to be strongly inspired as
the S&P 500 broad market index rose by 0.9% to 4583 points last Friday.
Institutional
investors, however, are still captivated by correction fears, as U.S. debt
market is moving neutral. The S&P 500 index has mostly exhausted its upside
potential. The only upside target remaining is at 4660-4680 points, or another
1.5-2.0% up. Will the market has enough strength to hit this target running in
the current upside formation. Apple and amazon Q2 2023 earnings reports may
help investors to decide the direction of the market.
This week
has many macroeconomic data releases. PMIs, trade balance data, inflation would
be interesting to monitor. The meetings of Reserve Bank of Australia and Bank
of England may largely affect the exchange rates of the Aussie and the Cable. July
Non-Farm Payrolls that will be released this Friday are expected to have an effect
on the market movements next week. Apple and Amazon earning reports may move
stocks in either direction.
Technically,
the S&P 500 index continues to have an upside formation with targets at
4250-4350 points, that have already been met. The benchmark is struggling to
move up towards 4560-4580 points. If this level would be passed the only upside
target of the current formation at 4660-4680 points will remain. The nearest
support level is located
at 4440-4460. The
downside signal has not formed yet, while there are more than enough incentives
for this signal to emerge.
Brent crude
prices passed the resistance at $81.80-82.00 per barrel after Organisation for
Petroleum Exporting Countries (OPEC) and its allies demonstrated commitment to
continue with production cuts. This time prices may continue to go up towards
$86-88 per barrel. In the alternative scenario prices may slip below $76 per
barrel initiating a recession scenario with targets at $67-69 per barrel of
Brent crude.
Gold prices
are moving inside the mid-term upside formation with targets at $2000-2100 per
troy ounce that have already been met. But, the situation has changed
dramatically as the important support level of $1980-2000 per ounce was smashed.
The chances for a correction towards $1820-1850 per ounce are still high.
The
Greenback cooled its jets and went into correction, still looking solid
compared to its major peers. Thus, even mid-term long positions for the U.S.
Dollar are seen not to be appropriate. It would be better to wait for a decline
of the EURUSD below 1.06000 to seek out sell opportunities for the Greenback.
Two
positions opened for July ended in disappointment. The EURUSD opened at
1.08900-1.09200 was closed on the last day of July with 1000 points loss, while
AUDUSD opened at 0.66400-0.66600 brought about 450 points of profit. Two
operations were balance each other making a negative result for these assets
lower.
However, overall
trading result for July landed in the positive zone. New trades may emerge by
the end of this week.