Last week was full of surprises! The US dollar plunged despite a better-than-expected retail sales report…
What drives the market on August 17?
The week has started with a mixed sentiment on the market. Let’s discuss main market movements and latest news.
First of all, investors weigh on the escalating tensions between China and the USA. Two countries delayed the meeting over their phase-one trade agreement, which has been scheduled for this weekend. Moreover, Sino-American disputes only increase amid the Donald Trump’s re-election. Trump’s officially made an order to sell TikTok’s US assets. According to president, the Chinese app presents a threat to the US national security.
It is worth noting, the Japanese data came worse than analysts expected. The preliminary GDP came out -7.8%, while the forecast was -7.5%. The preliminary report is the earliest and thus tends to have the most impact. After the report USD/JPY surged, but then contracted to the initial level. If the pair breaks down the 38.2% Fibonacci level at 106.35, it will open doors towards the key psychological mark at 106.00. In opposite, if USD/JPY surges above the high of August 13 at 106.78, it will jump to 50.0% Fibonacci level at 107.00.
The euro has started the week on a positive footing. It gained on the weak US dollar and the German Finance Minister’s suggestion to boost the job subsidy by 10 billion euros. If EUR/USD crosses the key resistance at 1.1880, it may jump to the high of July 31 at 1.1900. On the contrary, if it falls below the support at 1.1840, it will dip down to the next one at the 61.8% Fibonacci level at 1.1825.
S&P 500 keeps climbing up slowly, but surely. If it crosses the all-time high at 3 390, it may surge to 3500. On the flip side, the move below the low of August 11 at 3 335 will push the price lower to the next support at 3 270.
Finally, let’s look at the gold chart. It’s moving up towards the Friday’s high at $1 960. If it breaks it out, it will clear the way to the resistance at $1 980. Support levels are $1 930 and $1 910.
Last week was very interesting for the markets, as we saw the releases of the US Inflation and Disney’s earnings report. So let's see what we should await this week!
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The US Markit will publish Flash Manufacturing and Flash Services PMIs (purchasing managers' indices) on June 23 at 16:45 GMT+3.
The Fed Chair Jerome Powell will testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee on June 22-23 at 17:00 GMT+3.
Canada will publish Retail Sales and Core Retail Sales on June 21 at 15:30 GMT+3.