Daily Market Outlook, July 26, 2022

Overnight Headlines

Stock Bulls Deluded By ‘Wishful Thinking,’ Morgan Stanley Warns
Coinbase Faces SEC Investigation Over Cryptocurrency Listings
BoJ Board Agreed On Need For Ultra-Low Rates: June Meeting Minutes
RBA’s Harper: Australia’s Economy Robust, Can Withstand Hikes
Korea’s Economy Accelerates, Giving Scope To Keep Raising Rates
Dollar Near Recent Peaks As Fed Looms, Growth Fears Weigh
Japan Long-End Curve Hits 2015 High As BoJ Angst Lingers
Oil Rallies As Tight Supplies Counter Expectations Of A Slowdown
Morgan Cuts Near-Term Brent, WTI Forecasts, Hikes 2023 Q3 And Q4
Asian Stocks Trader Higher Tuesday Ahead Of Possible US Rate Hike
China’s Alibaba To Apply For Dual Primary Listing In Hong Kong
Walmart Issues Profit Warning As Soaring Inflation Hits Customers
Whirlpool Cuts Forecast Less Than Feared, Sees Long-Term Demand

The Day Ahead

Equity markets traded mixed in the Asia-Pacific region. Japan’s Nikkei is lower, but Hong Kong and China are outperforming helped by tech shares. Markets remain volatile and are focused on tomorrow’s Fed policy update as well as corporate earnings announcements. In Europe, concerns about the economic outlook deepen on reports that Russia extended curbs on gas supplies to the continent. The IMF will provide an update of its global economic forecasts later today.

The CBI will release its UK distributive trades survey this morning after yesterday’s industrial trends survey which showed falls in the monthly net balances for new orders and output. Investment intentions in the quarterly segment of the industrial survey improved but remained weaker than at the start of the year. For the distributive trades survey, last month’s net balance for reported sales volumes was negative at -5% despite the boost to activity from the Queen’s Platinum Jubilee celebrations, while the balance for expected sales volumes was slightly negative at -2%. The consensus forecast is for this morning’s reported sales balance for July to weaken.

There are no major Eurozone data releases today. Early tomorrow morning’s German and French consumer confidence reports are expected to show further declines. EU energy ministers are scheduled to meet today to try and come to an agreement over measures in response to a potential energy crisis this winter.

US new home sales data are expected to show a further slowdown in the housing market as interest rates increase. Also of interest is the Conference Board’s consumer confidence survey. Last month’s confidence fell to a 16-month low of 98.7, led by increasing concerns about inflation. Expect a further decline in July to 97.5. The Richmond Fed’s regional manufacturing survey will also be released. The Federal Reserve Open Market Committee begins its two-day meeting today and is expected to announce another 75bp increase in interest rates tomorrow.

Australia will release Q2 CPI figures early Wednesday, which are expected to show an increase in the annual headline rate to 6.3% from 5.1% in Q1. That would be the highest for over thirty years. The trimmed mean measure is forecast to increase to 4.7% from 3.7%.

The British Retail Consortium’s shop price index is also due early Wednesday. Its measure of shop price inflation last month was the highest since 2008. High inflation will maintain pressure on the Bank of England to raise interest rates further despite signs of economic slowdown, with markets partly discounting a 50bp rise next week.

FX Options Expiring 10am New York Cut

EUR/USD: 1.0200 (762M), 1.0255-65 (1.25M). EUR/GBP: 0.8520-30 (290M)
USD/JPY: 139.00 (970M), 140.00 (540M). EUR/JPY: 141.00 (727M), 143.00 (734M)
GBP/USD: 1.1900 (368M), 1.1950 (392M), 1.2000-10 (625M)
AUD/USD: 0.7000 (216M), 0.7150 (456M), 0.7200 (406M). NZD/USD: 0.6100 (489M)
USD/CAD: 1.2750 (700M), 1.2800 (425M), 1.2900-10 (836M)

Technical & Trade Views

EURUSD Bias: Bearish below 1.0350

Consolidation in quiet, thin Asain trade
Traders weighting on the FOMC decision for directional catalyst
Resistance 1.0250/60, support 1.0100-05, 1.0070-75
Price testing the 20 Day Bearish VWAP
20 Day VWAP is bearish, 5 Day bullish

GBPUSD Bias: Bearish below 1.2150

Recession fears mire Fed’s rate outlook; 75bps priced in
Bank of England also set to hike Aug 4; 25bps likely
But chance of 50bps inspires GBP/USD longs
Sunak and Truss TV debate does little to inspire
Offers sited at 1.2050 bids 1.1890
20 Day VWAP is bullish, 5 Day bullish

USDJPY Bias: Bullish above 134

Lower with US yields weigh as growth concerns continue to mount
U.S. yields fall in reaction to Walmart’s dire outlook
Walmart ‘train wreck’ profit warning sparks further recession fears
BOJ agreed on need for low rates, June monetary policy meeting minutes show
Offers sited 137.30/50 bids at 135.10
20 Day VWAP is bearish, 5 Day bearish

AUDUSD Bias: Bearish below .7050

AUD prints 1 month highs
China positivity aids commodities and AUD
Iron ore up 4+% and copper up 1.65% on China demand
Recovery in metals premised on China supporting property funds
The rally in commodities forcing AUD/USD shorts to cover
Sentiment improving despite global growth concerns
Offers sited .7000/10
AUD/USD support is at Friday’s 0.6876 low and break targets 0.6840/45
20 Day VWAP is bullish, 5 Day bullish

BTCUSD Bias: Bearish above 22k

BTC testing pivotal 21k level
Coinbase regulatory concerns weigh on sentiment
Falls out of VWAP uptrend channel
Closing below 21k will be a meaningful downside development
If below 20.5k, downtrend channel back in play
Risk appetite fragile leading up to Wed FOMC decision
20 Day VWAP is bearish, 5 Day bearish

Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.

High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% and 68% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Written by Patrick Munnelly

Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!

AUDUSD, H4 | Potential Bullish Continuation

Investment Bank Outlook 26-07-2022

[{“code”:”firstname_latin”,”message”:”Please use Latin characters only”},{“code”:”lastname_latin”,”message”:”Please use Latin characters only”},{“code”:”email_rfc822″,”message”:”Invalid email address”},{“code”:”phone_int5″,”message”:”Please use at least 9 digits and a ‘+’ sign only”},{“code”:”name_char1″,”message”:”Please insert your name”},{“code”:”message_char6″,”message”:”Please insert a message that is 6 – 200 characters long”},{“code”:”choose_lap”,”message”:”Please choose a lap”},{“code”:”firstname_latinint”,”message”:”Please use Latin characters only”},{“code”:”lastname_latinint”,”message”:”Please use Latin characters only”},{“code”:”nick_latinmax15″,”message”:”Please use up to 15 Latin characters and digits only”},{“code”:”accept_terms”,”message”:”Please accept the Terms and Conditions”},{“code”:”email_in_use”,”message”:”This email is already in use”},{“code”:”nick_in_use”,”message”:”This nickname is already in use”},{“code”:”firstname_empty”,”message”:”Please insert your first name”},{“code”:”lastname_empty”,”message”:”Please insert your last name”},{“code”:”unknownError”,”message”:”We are experiencing some technical issues. Please try again later.”},{“code”:”technical”,”message”:”We are experiencing some technical issues. Please try again later.”},{“code”:”birthdate_char”,”message”:”You must be 18 years old to register”},{“code”:”duplicate_data”,”message”:”You have already registered. Please note that each Client can open only one Welcome Account.”},{“code”:”account_char1″,”message”:”Account number is invalid”},{“code”:”account_mismatch”,”message”:”Please make sure that the information provided matches your registered details”},{“code”:”deposit_numeric”,”message”:”The amount is not in a valid format”},{“code”:”deposit_amount”,”message”:”Please enter a valid amount between 100 and 5000000″},{“code”:”limit_reached”,”message”:”Dear Client, please be informed that you have reached the limit of demo accounts available per person. Therefore, this request will not be processed. Feel free to contact us if you need further clarification.”},{“code”:”email_temp_provider”,”message”:”The use of temporary email address is not allowed”},{“code”:”email_tradingaccount_mismatch”,”message”:”The email is not associated with trading account provided”},{“code”:”birthdate_year”,”message”:”You must be at least 18 years old to register.”},{“code”:”country_char”,”message”:”Selected country is not eligible for this type of account”},{“code”:”company”,”message”:”This type of account is not allowed for the selected company”},{“code”:”currency”,”message”:”There was an error opening the account. Please contact support providing them with the following code: CURR10″},{“code”:”gender”,”message”:”There was an error opening the account. Please contact support providing them with the following code: GEND11″},{“code”:”gender_inv”,”message”:”There was an error opening the account. Please contact support providing them with the following code: GEND12″},{“code”:”language”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LANG13″},{“code”:”assignee_inv”,”message”:”There was an error opening the account. Please contact support providing them with the following code: ASGN14″},{“code”:”sales_status”,”message”:”There was an error opening the account. Please contact support providing them with the following code: SALS15″},{“code”:”company_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: COMP20″},{“code”:”platform_type_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: PLAT30″},{“code”:”tm_platform_type_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: PLAT31″},{“code”:”account_type_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: ACTY40″},{“code”:”leverage_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LEV50″},{“code”:”classification_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: CLSF60″},{“code”:”account_group_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: ACGR70″},{“code”:”account_group_type_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: ACGR71″},{“code”:”lead_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK80″},{“code”:”lead_already_connected”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK81″},{“code”:”lead_source_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK82″},{“code”:”lead_exists”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK83″},{“code”:”lead_already_converted”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK84″},{“code”:”already_started_verification”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK85″},{“code”:”lead_already_verified”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK86″},{“code”:”awaiting_verification”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK87″},{“code”:”invalid_lead_type”,”message”:”There was an error opening the account. Please contact support providing them with the following code: LDUK88″},{“code”:”platform_error”,”message”:”There was an error opening the account. Please contact support providing them with the following code: MTPL90″},{“code”:”platform_unknown”,”message”:”There was an error opening the account. Please contact support providing them with the following code: MTPL91″},{“code”:”database_error”,”message”:”There was an error opening the account. Please contact support providing them with the following code: DBSE92″},{“code”:”firstname_char”,”message”:”Please enter a valid First Name”},{“code”:”lastname_char”,”message”:”Please enter a valid Last Name”}]

GET YOUR WEEKLY NEWSLETTER

Thank you. Your registration is confirmed!

I declare that I have carefully read and fully understood the Tickmill Ltd Privacy Policy.

Source: Tickmill

Daily Market Outlook, July 26, 2022