What to Trade on August 22–26?
How Energy Crisis Affects German PMI August 23, 2022, 10:30 GMT+3 Germany will publish Flash Manufacturing PMI data on Tuesday, August 23, at 10:30 MT time (GMT+3)…
Focus of the week
The current market sentiment is risk-off and it’s unlikely to change these days. The main issue for investors remains, of course, the coronavirus. Virus cases have surpassed 10 million globally this weekend. Texas, Arizona and Florida continue suffering from the fresh outbreak. That overweighed all the positive economic data. Most analysts believe that the recovery is going to be much slower.
Main market events of the week
China’s Manufacturing PMI will be released on June 30 at 4:00 MT time. This data is important for the whole world as China was the first country that entered the crisis and the first one that get out of it. That’s why investors pay a lot of attention to this report to assess how fast other countries will recover. If the PMI is better than expected, the Chinese yuan will gain.
Also, later the same day the Fed’s chairman Jerome Powell will testify at 19:30 MT time. Traders will focus on the economic prospects that he will give. The pessimistic outlook will strengthen the risk-off market sentiment and increase demand for safe-haven assets such as gold, the US dollar and the Japanese yen.
Finally, the US non-farm payrolls will be released on Thursday, July 2, at 15:30 MT time. It will have a huge impact on market volatility. We can’t be absolutely confident how exactly the market will react, but more possibly if NFP is better than expected, USD will gain, otherwise - drop.
EUR/USD
Let’s look at the charts. EUR/USD keeps trying to get higher, but there’s a strong resistance above 1.1300 and the risk-off sentiment may push it down this week. If the pair falls below the low of June 19, it may drop even further to the next support at 1.11.
S&P 500
S&P 500 lost all it gains last week and now approached to the key psychological mark at 3,000. If it breaks it, it may jump to the next resistance at the 200-day moving average at 3,020 and then to the high of June 25 at 3,075. However, most analysts have bearish prospects for the S&P 500 amid the current risk-averse on the market. Look for support levels at the 100-day moving average at 2,915 and 2,820.
Gold
Let’s move on to gold. It has reached 8-year highs. The gold rally is likely to continue this week amid the current market uncertainty and fears of the second wave. Most analysts believe it will surge to $1,800. Anyway, support levels are at $1,720 and $1,700.
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Latest news
Post-Fed Releases for USD & CAD Traders
Main news that will drive the market in the upcoming week include CB Consumer Confidence Index, Canadian GDP, and US Core PCE Price Index
FED and BOE Make Another Attempt to Beat Inflation
The Federal Reserve (Fed) will announce its Interest Rate Decision and make a statement about the future monetary policy on Wednesday, September 21, GMT+3. After the higher-than-expected inflation numbers published on September 13, there’s almost no doubt the Federal Reserve will come up with another 75-basis-point rate hike. However, surprised by the CPI numbers, several Fed members announced the possibility of a 100-basis-point rate hike on Wednesday.
Will the UK and US Cope with Inflation?
Every week we expect many interesting events that can shake the market.
