Market Update by Solidecn.com

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Bitcoin - Chart of the Day

Despite positive news in the cryptocurrency market, such as PayPal launching its own stablecoin and the approval of Bitcoin ETFs in Europe, cryptocurrencies remain under selling pressure. Delays in Bitcoin ETF applications by US funds, including BlackRock, have significantly contributed to the declines. Additional catalysts include issues with the decentralized exchange Curve and weaker macroeconomic sentiment in recent days.



In light of these events, yesterday Bitcoin once again broke below the $29,000 level and is currently trading around $28,600. The nearest support level is $28,300, which was tested overnight. After that, the Bitcoin price reacted strongly, rebounding by $400. If this year's upward trend is broken (blue line), we could expect the Bitcoin price to drop to $27,500 or even $26,200. On the other hand, with a positive catalyst, the Bitcoin price could swiftly return above $29,000, and even reach $29,700. Nevertheless, given the absence of positive news, further downward pressure can be expected in the coming weeks.

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US500

Today could be significant both for the shaping of the FED's future monetary policy and the direction of the main Wall Street indices, US100 and US500. The July reading will likely be the first in exactly a year when inflation was higher year-on-year compared to the previous month. According to the consensus, CPI inflation is expected to be 3.3% Y/Y, while in June it was 3.0% Y/Y. So far, the main indices have responded positively to lower readings, resulting in increases in US500 and US100 and a weakening dollar. However, today, a re



On US500 and US100, we observe an interesting situation. Both instruments are trading close to the lower limit of the upward channel, which has been respected since the beginning of March 2023. Therefore, if today's data falls below expectations, it may cause a rebound in the indices and euphoria in stocks driven by lowering inflation. Otherwise, the market may react with declines and break through the key support line.



On US500 and US100, we observe an interesting situation. Both instruments are trading close to the lower limit of the upward channel, which has been respected since the beginning of March 2023. Therefore, if today's data falls below expectations, it may cause a rebound in the indices and euphoria in stocks driven by lowering inflation. Otherwise, the market may react with declines and break through the key support line.

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DE30 - Chart of the Day

Global markets have calmed after yesterday's turmoil that was triggered by a combination of a few factors - Moody's rating agency downgrading a number of US banks, Italy approving a windfall tax on 2023 bank profits and China releasing disappointing trade data for July. Major European stock markets indices launched today's trading with around 1% gains and an empty economic calendar suggests that things may remain calm until US CPI release tomorrow at 1:30 pm BST.



German DAX is trading 1% higher on the day. Taking a look at DAX futures (DE30) at D1 interval, we can see that the index is attempting to break back above the psychological 16,000 pts mark. Bulls managed to halt declines and defend the upward trendline in the 15,900 pts area. It should be noted that DE30 has been largely stuck in the sideways move in the 15,900-16,300 pts range over the past 3-4 months, spare for few false breakouts. A positive price reaction to the lower limit of the range suggests that a move towards the 16,300 pts may be next. However, a stronger catalyst may be needed to push the index above the trading range.

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Chart of the Day - USDJPY



The Bank of Japan (BoJ) clarified that its recent yield curve adjustment, announced on July 28th, was intended to sustain the current loose monetary policy rather than indicate policy normalization. The BoJ allowed the 10-year Japanese Government Bond yield to trade above 0.5% in a flexible manner, deviating from a strict cap approach. Despite global anticipation of policy normalization due to rising wages and inflation, the BoJ remains cautious, questioning whether inflation's rise is demand-driven and durable enough to exceed 2%, indicating that a shift in policy direction is not imminent.


USDJPY currency pair rises as the US dollar is recovering from losses experienced toward the end of the previous week. The positive momentum in the 10-year US treasury yield is playing a role in bolstering the dollar's performance, despite a retracement on Friday that didn't fully negate the broader upward trend. Investors are eagerly awaiting the upcoming release of the US Consumer Price Index (CPI), which is anticipated to be higher than the last month figures and expected to reach 3.3% Y/Y and core inflation to be the same as previous month at 4.8% Y/Y.





USDJPY currency pair is currently trading at 143.1, indicating a 0.43% increase for the day. The price recently found support at the level of 137.8 and has been steadily advancing since then. The next key target level is the previous local high at 145, which is anticipated to act as a significant resistance level. However, if the price fails to breach this level, a potential downward move to the levels of 143 or 140.4 could be anticipated.

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Important Technical Setup on Gold


Gold is once again trading near its lowest levels in a month, but bulls are seeking hope in the recent rebound that occurred on Friday and was preceded by a small doji candlestick. Gold recovered from initial declines on Friday and gained significantly by the end of the day as US jobs data came in mixed and EURUSD rebounded.

Friday's candlestick could potentially mark a local low and also the right shoulder of an inverse head and shoulders pattern. Today, we are witnessing a pullback in gold, which puts the fate of the right shoulder at stake.

As seen in recent months, there is a significant correlation between gold and EURUSD. Having said that, rebound in EURUSD could be the best scenario for gold bulls. In theory, it may happen this Thursday when US CPI data for July is released at 1:30 pm BST. Market expects headline US CPI inflation to accelerate from 3.0 to 3.3% YoY, with a monthly increase of 0.2% MoM.




Neckline of the inverse head and shoulders pattern on GOLD can be found in the $1,980 area. Should we see price rise and break above this hurdle, it could pave the way for a larger upward move with a textbook range of the breakout from the pattern being $2,066 per ounce.

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Chart of the Day - Wheat

In terms of market-moving news, this past weekend has been very calm with neither politicians, nor central bankers delivering any significant comments. However, recent developments in the Russia-Ukraine war are pushing wheat as well as crude prices higher at the beginning of this week.

Russia has intensified shelling of Ukrainian ports after withdrawing from the Black Sea grain export agreement. Also, attacks of Ukrainian maritime drones on Russian Navy vessels have become more frequent recently. It was reported that apart from Russian Navy warships, a Russian oil tanker was also targeted this past weekend. This has led to a small jump in oil prices at the beginning of new week's trade as investors fear that it may limit Russia's ability to export its crude via Black Sea. However, it also means that return to the Black Sea grain export deal may be harder as hostilities at sea are picking up. As a result, we are observing an over-3% jump in wheat prices today.




Taking a look at WHEAT at D1 interval, we can see that the commodity has recently made another failed attempt at breaking above the 765 cents per bushel resistance zone. Price pulled back later on and declines were once again halted at the 625 cents per bushel support zone. Price is trying to bounce off this area today. A near-term resistance zone to watch can be found ranging around 665 cents per bushel, marked with previous price reactions as well as 50-session moving average (green line). However, if bulls fail to maintain control over the market and the price breaks below the aforementioned 625 support, a deeper drop may be looming. This is because the zone marks the neckline of a double top pattern. A break below the neckline would confirm the pattern and may trigger a drop with a textbook target range of 475 cents per bushel.

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Chart of the Day - USDCAD


USDCAD is one of the pairs to watch in the early afternoon as the first Friday of a new month has come and therefore it is time for release of jobs data from the United States and Canada. Of course, report from the United States will be watched more closely than Canadian one but the fact that both will be released at the same time (1:30 pm BST) means that USDCAD is likely to become very volatile around that hour.

The US report is expected to show a 200k increase in non-farm payrolls, slightly lower than the 209k reported in June. Unemployment rate is seen staying at 3.6% while annual wage growth is seen slowing from 4.4 to 4.2% YoY. Fed Chair Powell stressed that the September decision will be data-dependent and there are 4 key US macro reports ahead of the September 20, 2023 meeting - 2 jobs reports and 2 CPI reports. NFP report for July is the first one of the four and will be watched closely. A higher-than-expected jobs gain and a smaller drop in wage growth would likely boost hawkish bets in the markets and may trigger gains on the USD market as well as declines on equities.

The Canadian report is not expected to have as much gravity as the Bank of Canada is largely seen as having already finished its rate hike cycle. Nevertheless, release is likely to trigger some short-term CAD-volatility.




Taking a look at USDCAD chart at D1 interval, we can see that the pair has experienced strong gains recently, driven by strengthening of US dollar (USDIDX - light blue overlay). However, advance was halted after the pair reached resistance zone ranging above 50% retracement of the downward move launched at the turn of May and June 2023 (1.3370 area). This is a price zone that had halted advance in early-July as well. A strong US report combined with weaker Canadian data could trigger a break above the aforementioned 1.3370 area. In such a scenario, the next resistance to watch can be found ranging above 61.8% retracement (1.3440). On the other hand, should we see CAD gain against USD - drop in USDCAD - the support level to watch can be found at 38.2% retracement (1.3300 area).