Bitcoin prices are currently range-bound, the range between 56,561 and 61,750 is keeping both buyers and sellers cautious. Mt. Gox moved 13,265 Bitcoins totaling and estimated $780 million. The first major move by the bankrupt exchange since July 30. According to research by investment firm River, 60% of the largest hedge funds in the U.S. have exposure to Bitcoin ETFs. Most Read: S&P 500, Nasdaq 100 – Eight-Day Winning Streak to End or Continue? Bitcoin prices continue to trade sideways as the range high held yesterday before prices slid. The 61600 range high is holding firm but yesterday saw Bitcoin fail at the 50-day MA, languishing around 61400. Overnight news broke that Mt.Gox had made its first major move in 3 weeks. The bankrupt former exchange moved a total of 13265 Bitcoins, with an estimated value of around $780 million.  Source: x.com/HODL15Capital/ , On Chain Data The move could be a precursor to Mt.Gox continuing its repayments to creditors. Mt.Gox had already moved 47229 Bitcoin on July 30th.In a move that has surprised some, Mt. Gox creditors have held onto their Bitcoin instead of selling it. Bitpanda’s deputy CEO, Lukas Enzersdorfer-Konrad, told Cointelegraph earlier this August that it’s important to remember Mt. Gox was one of the first exchanges. This means its users were among the early adopters of Bitcoin and thus believe in the technology. This could in part explain why they are refusing to sell the world’s largest cryptocurrency. Bitcoin is trading up around 0.6% on the day but these developments are likely to keep downward pressure on the price of BTC/USD. Spot Bitcoin ETF Flows U.S. spot Bitcoin ETFs have had more money coming in than going out for eight of the last ten trading days. On August 20, these ETFs received $88 million, which is the most they’ve gotten in two weeks, according to early data from Farside Investors. Source: Farside Investors (click to enlarge) According to a recent report by Sam Baker, Researcher at Investment Firm River, 60% of the largest hedge funds in the United States have exposure to Bitcoin ETFs. This is big for Bitcoin and could explain why despite the massive selloff early in August prices have recovered some sense of stability.  There is a theory that with more institutional adoption Bitcoin may lose some of its volatility, however the drop in early August suggests this may be somewhat misguided. I guess time will tell where this one is concerned. El Salvador Continues to Innovate El Salvador’s National Bitcoin Office (ONBTC) is offering Bitcoin training and certifications to 80,000 government workers. The country has started this program to teach public employees about managing and creating policies for Bitcoin. The training, called Certification in Public Administration 1, lasts 160 hours and is done online. It’s divided into seven parts, each covering different concepts, laws, skills, and management for using Bitcoin as legal money. Source: X/Bitcoin Office This follows El Slavador giving transparency a new meaning earlier this year. The Country launched its own proof-of-reserves website which provides real time data of the countries Bitcoin reserves. As the week progresses, we do have the FOMC minutes this evening which could provide markets with a shot in the arm and stir up some volatility. Markets are a bit calm at the moment as Jackson Hole beckons with all eyes on Federal Reserve Chair Jerome Powell.  Market participants will be looking for more cues regarding the rate path of the Federal Reserve moving forward and this could have an impact on riskier assets such as Bitcoin Technical Analysis BTC/USD From a technical perspective, Bitcoin is currently stuck in a price range, with a recent dip almost breaking out but not succeeding. The range between 56,561 and 61,750 is keeping both buyers and sellers cautious.  The longer Bitcoin stays in this range, the more likely a strong breakout will happen, although it’s uncertain which direction it will take. Some crypto enthusiasts are predicting a bullish breakout, with some even suggesting a rise to 100,000, though that seems unlikely at this point.  In the short term, resistance is at 60,000, with more challenges at the 50-day moving average and range high around 61,750. Beyond that, there are additional hurdles at the 200 and 100-day moving averages at 62,917 and 63,870 before buyers can take full control. Support 58500 56561 54000  Resistance 60000  61750 62917  Bitcoin (BTC/USD) Daily Chart, August 21, 2024 Source: TradingView.com (click to enlarge) Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The euro is calm on Wednesday after an impressive 3-day rally which saw EUR/USD jump 1.4%. Will the upswing continue? In the European session, EUR/USD is trading at 1.1220 at the time of writing, down 0.08% on the day. ECB likely to lower rates in September despite stubborn inflation The European Central Bank took the plunge and lowered interest rates in June, for the first time in four since 2019. This brought down the key rate to 3.75%, down from a record 4%. At the meeting, the ECB also revised upwards its inflation forecast for 2024 from 2.3% to 2.5%. The ECB remains concerned about sticky inflation which is above the 2% target. The fact that inflation is above target won’t stop the central bank from further cuts since rate moves tend to take time until they filter through the economy. The ECB wants to continue cutting rates in order to boost a flagging eurozone economy but sticky inflation and strong wage growth remain are making it more difficult for the ECB to lower rates. Still, the markets have priced in a rate cut at the September 12 meeting at around 90%. Next up: Jackson Hole Symposium The annual meeting at Jackson Hole could be dramatic. Federal Reserve Chair Powell will address the gathering on Friday, ahead of a widely expected Fed rate cut next month. It is practically a given that the Fed will loosen policy, but by how much? The most likely scenario is a quarter-point cut, but earlier this month, the financial markets were routed and expectations for a large half-point cut soared. With inflation under control, the Fed is keeping a close eye on the US labor market, and Powell’s take on the economic outlook could move the markets. . EUR/USD Technical EUR/USD is testing support at 1.1112. Below, there is support at 1.1090 1.1151 and 1.1173 are the next resistance lines

The Canadian dollar is almost unchanged on Tuesday after posting gains over the past two days. In the North American session, USD/CAD is trading at 1.3636 at the time of writing. Canada’s inflation eases to 2.5% Canada’s headline CPI rose to 2.5% year-on-year in July, down from 2.7% in June and matching the market estimate. This marked the lowest annual inflation level since March 2021. Monthly, inflation rose to 0.4% in July following a decline in June of -0.1% and in line with the market estimate. The jump in the monthly report was driven by higher gasoline prices. Core CPI, which is more closely monitored by the Bank of Canada, also eased. The average of two of the Bank of Canada’s (BOC) core measures of inflation eased slightly to 2.55% year-on-year in July, compared to 2.7% in June. The decline in inflation is an encouraging sign for the BoC, which would like to continue trimming interest rates as the economy cools and also provide relief to homeowners who are struggling with high rates. The Bank of Canada meets on September 4 and is mindful that the Federal Reserve is almost certain to lower rates, perhaps by a half-point. This means that BoC policy makers don’t have to worry that another rate cut would hurt the Canadian dollar if the Fed follows suit with its own rate cut. The Federal Reserve will almost certainly lower rates at the September meeting, with uncertainty as to the size of the expected reduction. The probability of a 25-basis point cut stands at 75% and a 50 bps cut at 25%, according to the CME’s FedWatch. On Friday, Jerome Powell will address the Jackson Hole Symposium and could signal what the Fed has in store for next month’s meeting. . USD/CAD Technical USD/CAD tested support at 1.3614 earlier. Below, there is support at 1.3594 There is resistance at 1.3650 and 1.3670

The Australian dollar has steadied after pummeling the US dollar over the past two sessions. AUD/USD is trading at 0.6729 in the European session, down 0.04% on the day at the time of writing. RBA minutes: Rates will remain steady The RBA minutes from the meeting earlier this month reiterated that interest rates aren’t expected to fall anytime soon. RBA members considered raising rates at the meeting but decided that the risks were better balanced by maintaining rates. The members expressed concern about the risk of higher inflation and said that a hike would have been justified if the risks to inflation had risen “materially”. The minutes stated that members considered a rate cut unlikely in the short term and that rates would likely have to remain at current levels for an “extended period”. Governor RBA has expressed the same hawkish sentiment since the meeting, stating that it was unlikely that the central bank would lower rates in the next six months. The central bank has stuck to its “higher for longer” stance and has held the cash rate at 4.35% for seven straight times. The RBA isn’t about to change its tune, which is out of sync with the markets, which has priced in an initial rate cut in November. China maintained its Loan Prime Rates at 3.35% for the one-year LPR and 3.85% for the five-year LRP. A month ago, China surprised the markets and lowered the LRP rates in a bid to kick-start the limping economy. . AUD/USD Technical There is resistance at 0.6761 and 0.6790 0.6706 and 0.6677 are the next support levels

Brent crude oil prices continue to fall amidst rumors of a Middle East deal and increased production in Libya. US crude stockpiles are expected to have decreased, and insights from the Jackson Hole symposium could impact oil prices. Technicals point to a key support are. Will we get a short term bounce in Oil prices? Most Read: USD/CAD Teeters Near Critical Support Ahead of Canadian Inflation Data Oil prices are continuing to fall in early European trading, approaching the August 5 low near the $75.00 mark. Brent crude experienced a drop of approximately 2.5% on Monday, fueled by rumors that a Middle East deal might be imminent. On Monday, U.S. Secretary of State Antony Blinken announced that Israeli Prime Minister Benjamin Netanyahu had accepted a “bridging proposal” from Washington. This proposal aims to resolve disputes hindering a ceasefire agreement in Gaza, with Blinken urging Hamas to also come on board. Last week’s analysis suggested that the potential for civil war in Libya could support oil prices. However, a recent Reuters report citing two engineers at the Sharara oilfield revealed that production has increased to about 85,000 barrels per day. This boost in production could alleviate concerns about supply disruptions and could be another factor contributing to the current decline in oil prices. Last week’s trade and output numbers from China also appear to be on the minds of market participants. The print continued a growing trend of disappointing data from the world’s second largest economy.  Inventory Data and Jackson Hole  Oil inventory numbers will once again be in the spotlight, with a preliminary Reuters poll indicating that US crude stockpiles are expected to have decreased by 2.9 million barrels last week. However, given the significant discrepancy in last week’s data, the actual figures could differ substantially. Later this week, the Jackson Hole symposium will capture the attention of global markets as Central Bank Governors from around the world convene. The most anticipated speech will be from Federal Reserve Chair Jerome Powell. Any insights on potential rate cuts from Powell could be viewed as a positive catalyst for oil prices. Source: For all market-moving economic releases and events, see the MarketPulse Economic Calendar.  (click to enlarge) Technical Analysis From a technical perspective, oil is currently trading within a crucial support zone extending down to the August 5 low around 75.83. This significant support area on the daily chart could present a formidable challenge to break. Should oil prices bounce from this support zone, they may encounter resistance around 79.00 before targeting the psychological level of 80.00. At this juncture, the newly drawn trendline is likely to come into play, followed by the resistance area at 81.58. Conversely, a decline from the current price may find support at 76.50 before testing last week’s lows at 75.83. USD/CAD Chart, August 20, 2024 Source: TradingView (click to enlarge) Support 76.50 75.83 75.00 Resistance 78.97 80.00 81.58 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The New Zealand dollar wrapped up a fourth consecutive winning week and is in positive territory on Monday. NZD/USD is trading at 0.6076, up 0.37% in the European session at the time of writing. New Zealand PSI pace of contraction eases The New Zealand Performance of Services Index rose to 44.6 in July, up sharply from 40.7 in June. The index remained in contraction mode (below 50) for a fifth straight month and all industries reported contraction, which is a sign of concern. The services sector makes up about two-thirds of New Zealand’s GDP and the continuing contraction points to a weak economy. The Reserve Bank of New Zealand delivered an initial rate cut last week and forecast that GDP will decline 0.5% in the second quarter and 0.2% in Q4.This would mark a technical recession, with two consecutive quarters of negative growth. In the US, last week’s data was solid, as retail sales jumped 1% and inflation ticked lower 2.9%, down from 3%. On Friday, UoM consumer sentiment rose in July and beat expectation, while inflation expectations were unchanged at 2.9%, in line with expectations. The markets melted down after a weak US employment report earlier this month but strong US numbers last week led to improved risk appetite which has hurt the US dollar. The markets expect a rate cut at the Federal Reserve’s next meeting on September 18, with a quarter-point cut being the most likely decision. On Friday, Minneapolis Fed President Neel Kashkari said that a rate cut discussion at the September meeting was “appropriate” as inflation had eased, but expressed concern about the deteriorating labor market. . NZD/USD Technical NZD/USD tested resistance earlier at 0.6080. Next, there is resistance at 0.6107 0.6030 and 0.6003 are providing support

The Australian dollar has started the week with slight gains. AUD/USD is trading at 0.6685 in the European session, up 0.24% on the day at the time of writing. Earlier today, the Australian dollar rose as high as 0.6694, marking a one-month high. Will RBA minutes shake up the Aussie? Hawkish remarks from Reserve Bank of Australia’s Governor Bullock sent the Aussie flying on Friday. Bullock reiterated that there would be no interest rate cuts in the “near term”. Bullock used the same language after the meeting on August 6 and when she clarified that this meant a period of at least six months, the Australian dollar responded with strong gains. The RBA statement at the meeting expressed the Bank’s frustration that inflation remains too high and is coming down slower than the central bank had expected. Will we gain any insights from Tuesday’s RBA minutes release? The minutes will indicate that the Board discussed the possibility of a rate hike, but that isn’t really news since the Board did the same thing at the previous two meetings. If the minutes show that the RBA has little appetite for a rate cut, that could send the Australian dollar lower as the markets are at odds with Bullock’s hawkish message. The markets have fully priced in a rate cut of 25 basis points in November and expect further cuts early in 2025. The rate statement noted that inflation remained too high and was coming down slower than expected. China will announce its loan prime rates (LPR) on early Tuesday. A month ago, China’s central bank surprised the markets and lowered the rates for the one-year and five-year LPRs for the first time in close to a year. The central bank is expected to maintain the one-year LPR at 3.35% and the five-year loan rate at 3.85%. . AUD/USD Technical AUD/USD is testing resistance at 0.6691. Close by, there is resistance at 0.6713 0.6650 and 0.6628 are the next support levels

Gold prices surpassed the $2500/oz level on Friday despite a decrease in the likelihood of a 50 bps cut at the Federal Reserve’s September meeting. The rally in gold prices is attributed to dovish remarks by Federal Reserve policymakers and concerns over rising tensions in the Middle East. From a technical standpoint, the weekly chart indicates a strong bullish trend for gold, but a retracement towards the 2450 mark is possible. Most Read: Markets Weekly Outlook – Gold Hits New ATH Ahead of Jackson Hole Symposium Gold prices are aiming to consolidate above the $2500/oz level after surpassing this psychological threshold on Friday. This movement took some market participants by surprise, especially considering the initial reaction of the precious metal to the US CPI data earlier in the week. Despite the reduction in the likelihood of a 50 bps cut at the Federal Reserve’s September meeting—dropping from 50% to 28.5%—gold managed to breach the $2500/oz mark. This reduction in the expected rate cut theoretically should have exerted downward pressure on gold prices. Source: CME FedWatch Tool Examining the reasons behind the recent rally in gold prices, it primarily stems from dovish remarks made by Federal Reserve policymakers. Chicago Fed President Austin Goolsbee expressed caution about maintaining the restrictive policy for longer than necessary. These comments, along with ongoing concerns regarding a ceasefire deal in the Middle East, are likely driving factors behind the surge in gold prices. Markets are also uneasy about rising tensions in the Middle East and the potential for an attack on Israel by Iran. Such an event could lead to increased demand for safe-haven assets and might materialize if a ceasefire agreement over Gaza is not achieved. There are some data releases in the week ahead. For a full breakdown of the event risk for the week ahead read the Weekly Market Outlook. Technical Analysis Gold (XAU/USD) From a technical standpoint, the weekly chart shows that the bullish trend remains strong. However, a retracement towards the 2450 mark is possible and would not negate the bullish outlook, given that the prior swing low is around 2350 on the weekly chart. Therefore, the current range is substantial, and even a significant pullback might not deter bulls from re-entering long positions if the price corrects sufficiently. GOLD (XAU/USD) Weekly Chart, August 19, 2024 Source: TradingView (click to enlarge) Gold formed a morning star candlestick pattern after the daily close on Friday. However, since this pattern emerged following a brief retracement within what might still be considered the peak of an uptrend, its reliability is questionable. Additionally, the possibility of profit-taking after Friday’s substantial rally suggests that further upward movement could be restricted today, with an increasing chance of a price pullback towards the $2472-2480 range. GOLD (XAU/USD) Daily Chart, August 19, 2024 Source: TradingView (click to enlarge) Support 2472 2450 2432 Resistance 2500 2509 2525 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

Gold reaches a new all-time high as markets reassess rate cut expectations after evaluating resilient US data. The Jackson Hole Symposium will be a key event next week, with central bankers discussing strategies for growth and monetary policy. It’s a data-heavy week in Europe and the US, with the release of FOMC minutes, PMI data, and speeches from Fed Chair Powell and BoE Governor Bailey. Read More: Gold (XAU/USD) Bounces Back After US CPI, DXY Faces Challenges Week in Review: Data Heavy Week Leaves more Questions Than Answers As the week draws to a close, many market participants who had anticipated clarity are left with more questions after evaluating resilient US data. This data has led to a reassessment of rate cut expectations. Previously, markets were pricing in a 51% chance of a 50bps cut, which has now been drastically reduced to 23.5%. Despite this, gold reached a new all-time high of $2500/oz, while both the Euro and GBP made significant gains against the USD. Source: CME FedWatch Tool The GBP notably gained from a series of positive data releases, with Friday’s GDP figures surpassing expectations. This propelled Cable into the 1.2900s, with the key psychological level of 1.3000 now within reach as we head into next week. Oil prices struggled to maintain last week’s rally, ending the week on a bearish note and resulting in a doji weekly candle that could indicate either a bullish or bearish trend. In contrast, US indices had an exceptional week, rallying significantly. The S&P 500 is poised for a 3.2% gain, while the Nasdaq 100 is on track for even stronger gains of around 5.2% at the time of writing. This sharp shift in market sentiment was driven by a series of positive US data releases, which continued on Friday with improved consumer sentiment data and stable inflation expectations for the next 12 months. Source: LSEG The Week Ahead: Jackson Hole and PMI data at the forefront The Jackson Hole Symposium this year holds significant importance as a gathering of global central bankers, economists, and financial market participants. This year, the symposium’s focus is once again on navigating the post-pandemic economic recovery and addressing the challenges posed by higher interest rates and geopolitical tensions. Key topics include strategies for sustainable growth, monetary policy adjustments, and the implications of digital currencies on the global financial system. Notable speakers at this year’s event include Federal Reserve Chair Jerome Powell, European Central Bank President Christine Lagarde, and Bank of England Governor Andrew Bailey. Their insights are anticipated to shape market expectations and policy directions for the coming year The Symposium could stoke volatility across a host of currency pairs and will need to be monitored closely. Asia Pacific Markets In Asia, the upcoming week looks quiet for China, having just wrapped up its significant monthly data releases. On Tuesday, an announcement regarding the loan prime rates is anticipated. No changes are expected, given that the MLF and 7-day reverse repo rates have remained steady throughout August. Looking at Japan and the flash PMIs are expected to improve, driven by a positive outlook for service activity, despite recent fluctuations in the JPY and a significant drop in equity markets. Increased semiconductor and auto exports, along with core machine orders data, also indicate a boost in manufacturers’ sentiment. Additionally, inflation is anticipated to pick up again in July, as previously indicated by Tokyo’s earlier inflation figures. Europe + UK + US In Europe and the US, it’s another data-heavy week. Beyond Jackson Hole, the week starts with the RBA minutes and Canadian inflation data on Tuesday. On Wednesday, the FOMC minutes will be released, potentially offering more clarity on Fed policymakers’ stance concerning a possible rate cut in September. Thursday is particularly busy with PMI data coming from the EU, UK, and US. The week concludes on Friday with speeches from Fed Chair Powell at Jackson Hole and BoE Governor Andrew Bailey. For all market-moving economic releases and events, see the MarketPulse Economic Calendar. Chart of the Week This week’s highlighted chart is the US Dollar Index (DXY), which continues to play a crucial role in the financial markets. The DXY revisited last week’s lows but experienced a rebound on Thursday, resulting in a morning star pattern on the candlestick chart, suggesting a potential deeper recovery. However, sellers dominated on Friday, driving the DXY back towards last week’s lows around the 102.00 level. Currently, the DXY is positioned just below a key resistance level at 102.64. A daily close at this level would mark the lowest daily close since January 2024. If the index moves downward from its current position, it would likely find support around the 102.00 level, with attention then shifting to the significant psychological level of 100.00. On the upside, immediate resistance is at 102.64, followed by the 103.00 and 103.65 levels as the next focal points. US Dollar Index (DXY) Daily Chart – June 28, 2024 Source:TradingView.Com (click to enlarge) Key Levels to Consider: Support: 102.00 101.50 100.00 Resistance: 102.64 103.00 103.65 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The British pound has extended its gains on Friday. GBP/USD is trading at 1.2887 in the European session, up 0.31% on the day at the time of writing. It has been a winning week for the pound, which has climbed 1%. UK retail sales jump in July There was more good news from the UK economy as retail sales rebounded in July by 0.5% m/m, after a revised decline of 0.9% in June and in line with the market estimate. Annually, GDP surged 1.4%, compared to -0.8% in June and matching the market estimate. The pound has moved higher in response to the positive retail sales data. The bounce in retail sales reflects summer discounts and purchases related to the Euro 2024 and the Paris Olympics, such as apparel. As well, with inflation finally under control and running close to 2%, consumers are responding by opening up their wallets and purses. The positive retail sales report follows yesterday’s solid GDP release. The UK economy recorded rose 0.6% in Q2, a second straight quarter of growth. The economy is showing some strength in the second quarter but that may not have much effect on the Bank of England’s rate path. The increase in growth may not be sustainable and BoE policy makers have said that they are more focused on inflation, particularly service inflation, which remains much higher than the BoE’s 2% target. The markets are expecting further cutting before the end of the year and have priced in a rate reduction at the November meeting. . GBP/USD Technical GBP/USD is testing resistance at 1.2884. Above, there is resistance at 1.2914 1.2841 and 1.2811 are the next support levels

The Japanese yen is sharply lower on Thursday. In the North American session, USD/JPY is trading at 149.02, up 1.1% on the day. Japan’s economy bounces back in second quarter Japan’s economy jumped 3.1% y/y in the second quarter, an impressive turnaround from the revised 2.3% decline in the first quarter and above the market estimate of 2.1%. This was the strongest yearly expansion since Q2 of 2023, driven by strong private consumption after a wage deal in the spring resulted in hefty wage gains. The yen has looked razor sharp of late, gaining a massive 6.7% in July and strengthening to 141.68 last week, its best showing since January. The US dollar fought back today, boosted by a sizzling US retail sales report which drove USD/JPY up 1.1%. Retail sales jumped 1% m/m in July, up sharply from a revised -0.2% and blowing past the market estimate of 0.3%. As well, unemployment claims surprised on the downside at 227 thousand, lower than the revised 237 thousand previously and below the market estimate of 235 thousand. Today’s better-than-expected consumer spending and unemployment data supports a case for a modest 25-basis point cut from the Federal Reserve in September. Last week’s rout in the global markets raised expectations of a massive 50-basis point cut as a response to fears of a deterioration in the US economy. These fears have been allayed somewhat but if the US posts more soft data we could see another sharp decline in the financial markets. . USD/JPY Technical USD/JPY pushed past resistance at 147.91 and 148.51 earlier. Next, there is resistance at 149.52 147.00 and 146.40 are providing support

The market seems to be focused now on growth-related macro data rather than inflation risk. Another softer US retail sales may spark another recession aka hard-landing fear. The rise of the VVIX / VIX ratio may see another potential spike in the VIX. Watch the 19,230 key short-term resistance on the Nasdaq 100. In July, the Nasdaq 100 was the worst-performing benchmark US stock indices where it recorded a monthly loss of -1.6% versus the S&P 500 (+1.1%), Dow Jones Industrial Average (+4.4%), and Russell 2000 (+10%). In addition, the global synchronized risk-off behaviour that took shape in the past three weeks led to a larger drawdown in the Nasdaq 100 versus other US stock indices as it plummeted by -16% from its July high to 5 August 2024 low as momentum-driven strategies trimmed their long positions on US mega-cap technology stocks that have a significant combined weightage in the Nasdaq 100. Since the climatic sell-off seen in global stock indices on Monday, 5 August, the implied volatility of the S&P 500, the VIX has declined from a 52-week high of 65.73 to 16.20 on Wednesday, 14 August has led to a return of risk appetite; the Nasdaq 100 rebounded by 9% so far from its 5 August low. However, at least in the short term, three factors may pause the current rally seen in the Nasdaq 100. The hard landing scenario alarm bell may ring again if US retail sales disappoint Fig 1: US Unemployment Rate, ISM Manufacturing/Services Employment PMI & Retail Sales trends (Source: Trading View, click to enlarge chart) Despite a soft July US CPI print released on Wednesday, 15 August that indicated the inflationary trend in the US continued its deceleration path, it did not yield its prior positive impact on the Nasdaq 100 as the Nasdaq 100 underperformed (almost unchanged) versus the S&P 500 (+0.38%). Hence, the market seems to be more focused on economic growth-related macro data now rather than inflation risk due to the fear of a US recession or hard-landing scenario that may be already in motion with the US Federal Reserve being late on embarking its interest rate cut cycle. The next key US growth-focused data will be retail sales for July which is out later today; so far it has been on a path of slower growth since the March print of 3.6%, if the July number comes in lower than the 2.3% y/y recorded in June, it will be the fourth consecutive month of a growth slowdown in consumer spending which may bring the recession aka hard-landing scenario in the US back to the forefront again. The volatility of implied volatility (VVIX) is falling at a slower pace Fig 2: VVIX & VIX medium-term trends as of 15 Aug 2024 (Source: Trading View, click to enlarge chart) In the past two weeks since 5 August, the implied volatility of the S&P 500 (VIX) has fallen but the pace of the higher-order implied volatility of the VIX (VVIX) has declined at a slower pace than the VIX. Therefore, the VVIX / VIX ratio has increased since 5 August which suggests that there is still a degree of uncertainty in the US stock market. Right now, the VVIX / VIX ratio is at 6.59 at this time of the writing, just a whisker away from a significantly high level of 6.77 that led to past multi-week and multi-month corrective decline sequences in the S&P 500; for example, from 27 Jul 2023 to 27 October 2023. Hence, the risk of another spike in the VIX cannot be ruled out. Short-term bullish momentum has waned in the Nasdaq 100 Fig 3: Nasdaq 100 CFD short-term trend as of 15 Aug 2024 (Source: Trading View, click to enlarge chart) In the lens of technical analysis, the short-term bullish momentum of the minor uptrend phase for the Nasdaq 100 CFD (a proxy of Nasdaq 100 E-mini futures) has started to show signs of exhaustion via the recent bearish divergence condition flashed out by the hourly RSI momentum indicator at its overbought region. If the 19,230 short-term pivotal resistance is not surpassed to the upside, the Nasdaq 100 CFD faces the risk of a near-term corrective decline to expose the intermediate supports of 18,680 and 18,435/310. On the flip side, a clearance above 19,230 invalidates the bearish scenario for the continuation of the uptrend phase for the next intermediate resistances to come in at 19,600 and 19,900.

Gold prices rebounded after a post-CPI selloff, aided by a struggling US Dollar Index. A sustained move above $2500/oz for gold may require an additional catalyst, like geopolitical risks. The DXY faces challenges and is likely to remain subdued, with technical indicators suggesting a potential retracement. Will it Materialize? Most Read: Demand Concerns vs. Geopolitical Risks: What’s Next for Brent Crude Prices? Gold prices rebounded after a post-CPI selloff that pushed the precious metal down to around $2438/oz. The US Dollar Index (DXY) struggles aided gold’s recovery in the latter part of the US session, a trend that has persisted into the London open. Yesterday’s selloff was somewhat unexpected, given that US CPI figures were below expectations. Market participants reduced their rate cut expectations, which may have contributed to the dip in gold prices. It’s likely that a portion of the anticipated interest rate cuts has already been factored in by the market. However, the extent of this pricing remains uncertain, and market participants are expected to stay cautious as gold approaches the $2500/oz mark. While rate cuts generally benefit the non-yielding precious metal, a sustained move above the $2500/oz level may require an additional catalyst, such as geopolitical risks. Even then, the move might not be sustainable. US Dollar Index (DXY) The US Dollar Index (DXY) remains muted in early trading, persistently hovering below the 102.64 resistance level. Market participants appear satisfied with current inflation figures, shifting the focus to whether the Federal Reserve will implement a 25 or 50 basis point cut in September. The DXY is grappling to recover some of its recent losses, and this struggle seems likely to persist. Technically, the DXY shows potential for a retracement, but the dominating influence of fundamental factors may limit any significant recovery. US Dollar Index Daily Chat, August 15, 2024 Source:TradingView.com Support 102.40 101.20 100.26 (200-day MA) Resistance 103.00 103.65 104.00 Economic Data Ahead Several significant data releases this week could affect the US Dollar, and consequently, gold prices. Today, we expect the US industrial production data, followed by tomorrow’s US housing starts and the preliminary University of Michigan Sentiment data.  Additionally, some Federal Reserve policymakers are scheduled to speak, although these events are unlikely to cause any substantial shifts in the US Dollar regardless of the outcomes. Source: For all market-moving economic releases and events, see the MarketPulse Economic Calendar.  (click to enlarge) Technical Analysis Gold (XAU/USD) From a technical perspective, gold aims to recover from consecutive losing days. Despite closing in the red yesterday, the precious metal reached a fresh high of 2480.00 before the selloff commenced. Examining the daily chart, we observe a pattern of higher lows and higher highs, although breaking above 2480 has been challenging. The price range of 2350 to 2500, established since early July, is likely to persist until the Federal Reserve’s September meeting. On an intraday basis, key resistance levels are at 2472 and 2480, while crucial support levels to watch are at 2450 and yesterday’s low of 2438. Keep in mind that with upcoming US data, any move above the 2480 level is unlikely to be sustained, as buying pressure for the precious metal remains strong. GOLD (XAU/USD) Daily Chart, August 15, 2024 Source: TradingView (click to enlarge) Support 2450 2438 2432 Resistance 2472 2480 2500 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

The British pound is showing limited movement on Wednesday. GBP/USD is trading at 1.2844 in the European session, down 0.15% on the day. UK inflation report supports case for September rate cut Headline inflation in the UK rose 2.2% y/y in July, up from 2% in June but below the market estimate of 2.3%. Perhaps most important for the Bank of England, services inflation slowed to 5.2%, the lowest since June 2022 and well below the BoE’s forecast of 5.6%. Monthly, inflation fell 0.2% in July, down from 0.1% in June and the first decline in six months. Core inflation fell from 3.5% y/y to 3.3% and monthly from 0.2% to 0.1%, also below expectations. The soft inflation report supports the case for another rate cut in September, which the money markets have priced in at 45%. The BoE joined the new phase of the central banking cycle when it cut rates on August 1 by a quarter-point to 5%. The BoE meets next on September 19. The UK released a mixed employment report on Tuesday. The unemployment rate dipped to 4.2% in the second quarter, down from 4.4% in Q1 and wage growth with bonuses slowed from a revised 5.8% y/y to 5.4%, its lowest level in two years. Still, this was much higher than the market estimate of 4.6% and is much higher than the inflation rate. Unemployment claims shot up to 135 thousand in July, blowing past the market estimate of revised 36.2 thousand and the market estimate of 4.6%. GBP/USD Technical  There is resistance at 1.2833 and 1.2903  1.2792 and 1.2722 are the next support levels      

The New Zealand dollar is down 1% on Wednesday, after the Reserve Bank lowered interest rates today. NZD/USD is trading at 0.6017 in the European session at the time of writing. RBNZ lower rates for first time in four years The Reserve Bank of New Zealand had investors on edge right up to the wire of today’s rate announcement. It was unclear whether the RBNZ would continue to hold rates or take the leap and cut rates for the first time since March 2020. In the end the central bank reduced the cash rate by 25 basis points to 5.25%. The RBNZ statement said that inflation expectations, headline and core inflation “are moving consistent with low and stable inflation”. The statement added that although services inflation remains high it is expected to continue to decline and CPI is expected to remain around the 2% midpoint of the 1-3% target in the foreseeable future. The RBNZ signaled that it plans to continue cutting rates, with its forward guidance suggesting once more cut prior to the end of the year and three or more cut by mid-2025. This was a far more aggressive projection than in May, when the RBNZ said that initial rate cut was unlikely before mid-2025. The RBNZ minutes noted that “the economy is contracting faster than anticipated”. The message from today’s meeting is that the central bank is satisfied with the inflation picture and is ready to cut rates aggressively, which is a significant shift in policy. The New Zealand dollar has reacted with losses and fell as low as 1.2% earlier today, erasing the gains seen on Friday. . NZD/USD Technical NZD/USD has pushed below support at 0.6059 and is testing support at 0.6036. Next, there is support at 0.5994 There is resistance at 0.6101 and 0.6124

Market expectations for July’s US CPI data release are centered around a 0.2% month-over-month increase and a 3% year-over-year increase. Different CPI outcomes will have varying effects on the markets with each potential outcome broken down. The US Dollar Index (DXY) is currently testing support at 102.40 and faces immediate resistance at 103.00. Will the Inflation print solidify a September rate cut? Most Read:  S&P 500, Nasdaq 100 Inch Higher Following US PPI Data Today’s release of the US CPI data has a consensus expectation of a 0.2% month-over-month increase for July, which is likely to cement a rate cut by the Federal Reserve in September. US CPI YoY  Source: TradingEconomics (click to enlarge) Approaching the inflation readings in April and May, markets were considerably more anxious due to the March spike to 3.5%. However, the dynamics have shifted following a series of weakening data from the US, along with encouraging signs from the June inflation print, which reached 3%, a one-year low. In response to this softening data, market participants have started to aggressively price in rate cuts from the Federal Reserve as recession concerns emerge. Federal Reserve Interest Rate Probabilities Source: LSEG (click to enlarge) There have been positives with the recent PPI data which showed a year-on-year increase of 2.2%—a notable decline from the previous month’s 2.6%. Similarly, the core PPI number dropped to 2.4% from 3% the prior month, with the month-over-month increase remaining modest at 0.1%. These figures suggest that inflationary pressures are beginning to subside, offering another ray of hope to both consumers and policymakers. Potential Scenarios from the CPI Release With today’s CPI release, market participants are keen to understand the current economic climate and prospective trends. Numerous factors continue to influence US and global inflation trends, such as labor market concerns, supply chain disruptions, geopolitical events, and energy prices. Several scenarios could unfold, with the most anticipated being a consensus print of 0.2% month-over-month and 3% year-over-year. Let’s explore the potential market impacts based on different scenarios. Inflation Above Expectations: Should the CPI data reveal higher-than-expected inflation, is possibly the worst outcome. High inflation combined with a decelerating economy could result in another risk-off event and a move towards safer assets. This scenario could lead to increased volatility in financial markets, with equities and indices such as the S&P 500 and Nasdaq 100 potentially experiencing downward pressure. Inflation Meets Expectations: If the inflation figures align with market expectations, it may provide a sense of stability and reassurance around September rate cuts. This outcome would suggest that current monetary policies are effectively managing inflation, likely resulting in a neutral to positive market reaction. Inflation Below Expectations: Lower-than-expected inflation data could bolster the case for a more dovish stance from the Federal Reserve and could spark a renewed selloff in the US dollar. This scenario might lead to a rally in equity markets as investors gain confidence and market sentiment continues to improve. Technical Analysis on the US Dollar Index (DXY) From a technical perspective, the DXY is declining this morning, testing the support level at 102.40. Although it showed strong recovery last week, it has been under pressure this week. US PPI data has further weakened the dollar, pushing the DXY closer to the December 2023 lows around 101.00. The DXY is at a critical juncture as markets brace for potential rate cuts in the second half of the year, making it vulnerable to a possible retest of the psychological 100.00 level. Any recovery from this point will face immediate resistance at 103.00, followed by 103.17 and 103.65. US Dollar Index (DXY) Daily Chart, August 14, 2024 Source: TradingView.com (click to enlarge) Support 102.40 101.20 100.26 (200-day MA) Resistance 103.00 103.65 104.00 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

US PPI data came in weaker than expected, leading to increased rate cut bets and a rise in US indices. Th Immediate resistance for the S&P 500 is at 5421, with support at 5330.e June-August period is historically the second-strongest 3-month period for the S&P 500, averaging a 3.2% return. Immediate resistance for the S&P 500 is at 5421, with support at 5330. MostRead: GBP/USD Edges Higher as Wage Growth Hits Lowest Level in 2 Years Wall Street’s main indexes have continued their upward trend today, partly due to the weak US PPI data. The Producer Price Inflation figures showed a year-on-year increase of 2.2%, a significant decrease from the previous 2.6%.  The core PPI fell to 2.4% from 3% the prior month, with a month-on-month rise of only 0.1%. This data has led market participants to increase their rate cut bets, benefiting US indices. Examining individual stocks, Starbucks surged nearly 10% in premarket trading after naming Chipotle’s Brian Niccol as CEO. Following the US market opening, Nvidia climbed 4.5%, and Tesla increased by 3.75%. In terms of sector performance, the Tech sector is leading, up 1.47% at the time of writing. S&P 500 Sector Summary Source: LSEG Seasonality A couple of weeks back we took a look at seasonality and how it might affect markets. I have come across a new chart that looks at the performance of the S&P 500 over various three-month periods during the year. According to the data the June-August period is the second strongest 3 month period, averaging a return of 3.2%. The index has also recorded gains 65% of the time during this period dating all the way back to 1928. Source: Bloomberg, BofA Research, Isabelnet The previous seasonality analysis also examined US election years, revealing a slight dip in US indices during September and October of election years, followed by a post-election and Santa rally in December. This information could be valuable as the S&P 500 continues to climb and the election approaches. However, this year comes with several other challenges affecting market sentiment, which must also be taken into account. As we look ahead to the remainder of the week, key data releases such as US inflation, retail sales, and Michigan consumer sentiment are expected. Combined with geopolitical developments, these factors could significantly impact the market for the rest of the week. Technical Analysis S&P 500 From a technical perspective, the S&P 500 has been noteworthy since the lows on August 5. A bullish engulfing candle at the end of last week was followed by two days of indecision before today’s rise after the data release. On the daily chart, the overall structure remains bearish, with a break and daily close above the 5538 swing high needed to confirm a bullish trend. Immediate resistance is at 5421, with the 5500 level becoming relevant again after that. On the downside, support is at 5330, aligning with the 100-day moving average, before reaching the 5267 level. S&P 500 Daily Chart, August 13, 2024 Source: TradingView (click to enlarge) Support 5330 5267 5200 Resistance 5421 5500 5575 I’ve discovered another valuable tool that could provide insights into market movements. The following report examines the frequency with which the S&P 500 closes in positive territory for the day when the daily high is surpassed. Over the past six months, data indicates that when the daily high is breached, the S&P ends the day in the green 68% of the time. Reviewing such data can offer an additional layer of confirmation before making any trading decisions, especially when combined with proper analysis. Source: Edgeful  Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

New Zealand’s core inflation trend has decelerated at a faster pace than Australia. RBNZ may use tomorrow’s monetary policy meeting to offer dovish guidance and bring forward its projected first interest rate cut in H1 2025. A dovish hold by RBNZ may reinforce the continuation of the AUD/NZD medium-term bullish trend with key support at 1.0890/0840. On Wednesday, 14 August, the New Zealand central bank, RBNZ will announce its monetary policy decision and issue its quarterly Monetary Policy Statement with fresh forecasts on growth, inflation, and monetary policy outlook. The consensus is expecting RBNZ to maintain its official cash rate (OCR) steady again at 5.5% after it extended its rate pause for the eighth consecutive time in the July meeting where it peppered its July monetary policy statement with a dovish tilt that indicated the current high-interest rate environment in New Zealand had led to a decline in economic activities. A possible dovish hold by RBNZ cannot be ruled out In the previous quarterly Monetary Policy Statement released in May, the RBNZ signalled that the first interest rate cut in New Zealand would occur after Q2 2025. However, given the latest lacklustre data on growth and inflationary trends in New Zealand, RBNZ is likely to relook at its monetary policy projection and may bring forward its first interest rate cut to the first half of 2025 as Q2 core inflation rate has declined significantly to 2.8% y/y from 3.7% y/y recorded in Q1, its slowest pace of growth in three years. Hence, RBNZ may utilize Wednesday’s monetary policy meeting to offer guidance and lay the groundwork for an imminent interest cut cycle in New Zealand while maintaining its OCR unchanged at 5.5%. New Zealand’s inflation trend is decelerating at a faster rate than Australia Fig 1: Australia & New Zealand core inflation trends as of Q2 2024 (Source: TradingView, click to enlarge chart) The path of the inflationary trend is slightly different from the two Antipodeans. The Q2 core inflationary rate in Australia was still rather sticky as it recorded almost the same rate of growth as seen in Q1 (3.9% y/y vs. 4% y/y). Therefore, the current picture of Australia and New Zealand’s inflationary environment is a stark contrast when we measure the difference between them; since Q2 2023, Australia’s core inflation rate has been decelerating at a slower pace than New Zealand’s core inflation rate (see Fig 1). Therefore, this difference in inflationary trends supports a further potential RBNZ dovish monetary policy guidance which in turn may trigger an outperformance of the Aussie dollar over the Kiwi. The recent slide in AUD/NZD managed to find support at the key 200-day moving average Fig 2: AUD/NZD major and medium-term trends as of 13 Aug 2024 (Source: TradingView, click to enlarge chart) The recent decline of 2.80% from its 17 July 2024 swing high area of 1.1165/1190 has managed to stall at a key medium-term pivotal support at 1.0890/0840 (also the 200-day moving average). In addition, the price actions of the AUD/NZD cross pair have started to oscillate within a medium-term ascending channel since the 22 February 2024 low of 1.0570 (see Fig 2). A clearance above 1.1030 intermediate resistance may see a retest on the 1.1165/1190 medium-term resistance in the first step. However, a breakdown below 1.0840 invalidates the recovery scenario to expose the next medium-term support at 1.0735.

Unemployment rate fell to 4.2%, with a decrease in both short-term and long-term unemployment. UK wage growth slowed to its lowest level in two years, yet surpassed market expectations. Despite positive jobs data, BoE policymakers warn of potential inflation rebound in H2 2024, supported by a slight increase in grocery inflation. Cable edged higher but key resistance levels up ahead. Most Read: Brent Crude – Oil Advances as OPEC Cuts Demand Forecast Cable has continued to edge higher this morning following the UK jobs report. The data was mixed with unemployment improving substantially while pay growth hit its lowest level in two years.  According to the Office of National Statistics (ONS), preliminary data for July 2024 shows a 0.8% increase in payrolled employees compared to July 2023, translating to an additional 252,000 workers. The health and social work sector saw the most significant annual growth, adding 163,000 employees. In the UK, regular pay excluding bonuses increased by 5.4% year-on-year, reaching GBP 645 per week in the three months leading up to June 2024. This marks the smallest rise since August 2022, down from a 5.8% increase in the previous three months, yet surpassing market expectations of 4.6%.  Wage growth slowed in both the private sector (5.2% vs. 5.6%) and the public sector (6.0% vs. 6.4%). The finance and business services sector experienced the highest annual regular wage growth rates at 6.2%, followed by manufacturing at 6.0% and services at 5.5%. When adjusted for inflation, real-term wage growth for regular pay excluding bonuses slightly decreased to 2.4% from 2.5%. The surprise came from the unemployment rate which fell to 4.2% with estimates of a 4.5% print. The number of unemployed individuals fell by 51,000, reaching a total of 1.44 million, primarily due to declines among those unemployed for up to 6 months, bringing the figure below last year’s levels.  Furthermore, the number of people unemployed for over 6 months and up to 12 months, as well as those unemployed for over 12 months, also decreased but remained higher than last year’s estimates. Concurrently, the number of employed individuals rose by 97,000 to 33.1 million, mainly driven by an increase in part-time employees and self-employed workers, partially offset by a reduction in full-time employees. In the three months leading up to June 2024, the number of employed individuals in the United Kingdom rose by 97,000, marking the second consecutive period of growth following a 19,000 increase in the previous three months.  This period also saw the highest job creation rate since the three months ending in November 2023, primarily due to an uptick in part-time employees and self-employed workers. Conversely, the number of full-time employees declined during the latest quarter. Source: ONS The Bank of England (BoE) Policymakers Issue Inflation Warning Despite the generally positive jobs report, BoE Policymaker Catherine Mann reiterated her concerns about a potential rebound in inflation during the second half of 2024. This echoes the sentiments expressed by Governor Bailey at the latest BoE MPC meeting. Both Mann and Bailey’s comments were supported this morning as industry data showed grocery inflation rising for the first time since March 2023. According to market researcher Kanta, annual grocery inflation was 1.8% for the four weeks ending August 4, compared to 1.6% in the previous four-week period. UK inflation data is expected tomorrow, and the recent rise in inflation may not yet be reflected in the figures. However, there is cause for concern. Despite various improving metrics in the UK, such as household savings, citizens remain cautious about the outlook for the next six months. Source: For all market-moving economic releases and events, see the MarketPulse Economic Calendar.  (click to enlarge) Technical Analysis From a technical standpoint, GBP/USD has risen since last Thursday’s low of approximately 1.2665. Observing the daily chart, the overall trend is still bullish, with a daily candle close below the 1.2618 support level required to signal a structural change.  After breaking the ascending trendline, GBP/USD is now retesting this level, where there is resistance around the 1.2800 mark.  A move upward will encounter resistance at 1.2850 and 1.2950. Conversely, any downward movement will find immediate support at 1.2750, followed by significant confluence and support around the 1.2690-1.2660 range. GBP/USD Chart, August 13, 2024 Source: TradingView (click to enlarge) Support 1.2750 1.2690 1.2600 Resistance 1.2850 1.2950 1.3000 Follow Zain on Twitter/X for Additional Market News and Insights @zvawda