The fact that we gapped at the open also helps as well, because that shows that there is a huge surge of buying.

The Wall Street narrative on Wednesday suggests that even though inflation numbers are higher, it’s possible that the Federal Reserve may have to pivot. I don’t subscribe to this theory, at least not yet, as interest rates still have a long way to go before they are “neutral.” The fact is that inflation is at least three times what the Federal Reserve likes, so they are more likely than not going to have to continue tightening more than Wall Street is comfortable with.

Approaching the 13,500 Level

Nonetheless, the buying pressure seems to be there, and it’s going to be worth noting that we are getting close to the 13,500 level. That’s an area that should be rather resistive, so if we were to break above there, then it’s likely that the market goes looking to the 14,000 level. The 14,000 level also is where the 200-day EMA is sitting and dropping lower. The 200-Day EMA will be an area where people are paying close attention, as it defines the longer-term trend.

If we break down below the 13,000 level, then it’s likely that the market will go looking to the 50 Day EMA underneath, which is sitting at the 12,250 level. Keep in mind that technology stocks are extraordinarily sensitive to interest rates, so if they start to turn around and rise, that could be very negative for the NASDAQ 100 Index. Either way, I think we have a market that still has more bullish influence than bearish, at least in the short term. However, we know that volatility is off the rails at times, and it’s likely that we need to see the NASDAQ 100 become really noisy. It’s overdone recently, so do not be surprised if we get some type of pullback sooner or later. I thought we got that earlier in the week, but it does not look like it has quite stuck yet.

The fact that we gapped at the open also helps as well, because that shows that there is a huge surge of buying. The futures market went nuts when the CPI number came out lower than anticipated, but it should be kept in the back your mind that the Federal Reserve is going to have to continue tightening rather aggressively, even with is less than feared number.

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For four trading sessions in a row, the bulls failed to push the USD/JPY currency pair to more than the 135.58 resistance level. The US dollar pairs await the announcement of US inflation figures, which have a strong reaction to the future expectations of raising US interest rates in the remainder of the year 2022. The dollar-yen pair is stabilizing around the 135.10 level at the time of writing the analysis.

The US Labor Department will release its July consumer price report on Wednesday, followed by its producer price report on Thursday. Investors and economists will be looking for any signs that sharp US interest rate increases by the Federal Reserve in the past few months have helped to control inflation.

For its part, the Federal Reserve has raised US interest rates four times this year in an attempt to rein in the economy and cool the hottest inflation in four decades. Wall Street markets are concerned that the central bank could slam the brakes too hard and push the economy into recession. Last week’s strong US jobs report had most economists expect the Federal Reserve to raise short-term interest rates again by another three-quarters of a point at its September meeting.

USD/JPY Economic Outlook

Most economic data is already pointing to a slowdown. The US economy has now contracted for two consecutive quarters, which is an unofficial indicator of recession. But recession fears were eased by a hot jobs market as US unemployment fell to its historic lows. While this is good for the economy, it is a sign of persistent inflation.

What else is currently affecting the markets?

The fighting in Ukraine and the attacks on Europe’s largest nuclear plant are other factors hanging over the markets. Moscow and Kiev have accused each other of bombing a nuclear power plant in the Russian-occupied southeast of Ukraine, attacks that have raised international concern. The Zaporizhzhia Nuclear Power Plant has six nuclear reactors, and the fighting around them has increased the risk of a nuclear accident.

Forecast of the US dollar against the yen:

• The performance of the USD/JPY currency pair may remain stable around its recent gains until the US inflation figures are announced.
• This completes the picture for the US economy and the path of raising US interest rates.
• Currently, the nearest resistance levels for the dollar pair are 135.85, 136.20 and 137.00, respectively.
• A break of the support level 132.25 will be important for the bears to dominate.
• The general trend of the dollar-yen is still bullish.

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The EUR/USD pair experienced near and far setbacks during last week’s trading, but the risk of a long-term rise in US government bond yields would threaten to push it to July lows if US inflation figures further tighten the Fed. With the start of this week’s trading, the EUR/USD pair settled in tight surroundings between the level of 1.0160 and the level of 1.0222 and settled around the level of 1.0190 in the beginning of trading today, Tuesday.

During last week’s trading, the Euro-dollar approached the resistance 1.0300, but its attempts to recover were halted again due to the seemingly increasing risks to energy supplies in Germany and some other European countries. But the Russian government’s continued attempt to use gas supplies to force it out of European sanctions over its war in Ukraine aborted the euro’s early attempt to recover last week and could remain a headwind for the single European currency in the coming days.

Influencing Factors:

 Jordan Rochester, Nomura Strategist says. Electricity prices in Europe are setting new record highs this week, and while it’s strange that this alone didn’t push the EUR/USD lower, it’s only a matter of time, in our view. This week, a drought in Germany may cause the water level on the Rhine to drop below 40 cm (the shallower part of the central part of the river), making the river almost impassable for cargo,” he added. “About 30% of the coal is transported Germany’s iron ore and natural gas are along the river, with drought levels in 2018 dropping 0.4-0.7% of 2018 GDP. If this happens, Rochester and colleagues warned Friday, it would add further delays in the supply chain, but also make production Coal electricity is more difficult at a time when Germany is trying to move away from Russian gas.”

It wasn’t just energy supply risks that weighed on the euro’s ankles, as the message coming from the latest US economic data was also a mounting headwind after reviving a previously stalled rally in US bond yields and the dollar last week. It comes after the Institute for Supply Management’s Purchasing Managers’ Index (ISM) surveys of the US manufacturing and services sectors rose for July in contrast to their more dismal peers in Standard & Poor’s Global, which suggested late last month that the all-important services sector contracted in July.

Meanwhile, last Friday’s US non-farm payrolls report offered an open mockery of the notion that the US economy may be close to recession and was most notable for the strong increase in average hourly wage growth, which could have implications for the Fed’s policy outlook.

Pooja Sriram, an economist at Barclays, wrote in a research briefing Friday: “Along with signs of a weak labor supply, risks to sustained wages and inflationary pressures appear to be rising.”

After the strong July employment report, a 75 basis point rise at the September FOMC meeting is still on the table, with the potential to lift that volume. However, we maintain our baseline forecast for a 50bp rise, given that the Fed will have a wide range of data to consider in the extended meeting period (~7 weeks), including the print of July CPI this week and a set other data from employment and consumer price index in September”.

In general, the dollar has fallen with the euro benefiting since mid-July after a series of bad economic data that indicated that the US economy is slowing down faster than expected by the Federal Reserve, which also indicated late last month that it is likely to slow the pace of rate hikes.

Economic data released last week raised expectations about the Federal Reserve’s interest rate in September and gave a new lease of life to US bond yields and the dollar, which could rise further in the coming days if Wednesday’s US inflation numbers provide more incitement to Fed hawks.

Forecast for EUR/USD:

On the daily chart below, the EUR/USD is in a neutral position with a bearish bias, and a break of the 1.0130 support over the same time period will bring the bears enough momentum to move below the parity price and more. On the upside, moving towards the 1.0330 and 1.0400 resistance levels will be important for the upside trend to hold and in general I still prefer to sell EURUSD from every upside level.

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Today’s recommendation on the lira against the dollar

Risk 0.50%.

Yesterday’s buy trade was activated, and half of the contracts were closed with the price rising towards the target and providing a stop loss point.

Best selling entry points

• Entering a short position with a pending order from levels of 18.33
• Set a stop-loss point to close the lowest support levels at 18.55.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 17.70.

Best buy entry points

• Entering a buy position with a pending order from levels of 17.85
• The best points for setting stop-loss are closing the highest levels of 17.54.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 18.31

Analysis of the Turkish lira

The Turkish lira stabilized near its lowest level this year against the dollar, amid noticeable interventions by the Turkish Central Bank to control the price of the lira against the dollar, and work to stabilize it at the current borders. A report published by Reuters yesterday, which includes a poll on inflation expectations in the country, showed that inflation is expected to rise to record levels of 80 percent before declining to levels of 70 percent at the end of this year. This contradicts the statements of the Turkish Minister of Finance and Treasury last week, which expected the country’s inflation to rise to 60.4%. It is noteworthy that Turkish energy imports are the main reason for the rise in inflation, as Turkey imports most of its energy needs, which rose in the wake of the Russian invasion of Ukraine. It is noteworthy that there are other unchanged factors that pressure the price of the lira, most notably the stimulus policy of the Turkish Central Bank, which adheres to fixing the interest rate in light of the tightening of other central banks of monetary policy.

On the technical level, the Turkish lira stabilized against the US dollar at the peak recorded during the current year, after a temporary decline during yesterday’s trading. Where the intervention of the Central Turkish in the strong movements of the pair appears on the pullbacks shown on the chart, before the pair’s rise returns. The pair is trading above the rising trend line on the four-hour time frame, shown on the chart, at the same time, the pair is trading above the highest support levels that are concentrated at 17.80 and 17.70 levels, respectively. Meanwhile, the lira is trading below the resistance levels at 18.00 and 18.32, respectively. The pair is also trading above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating the bullish trend on the medium term. We expect to re-record new highs, especially with every dip in the pair, which represents a buying opportunity. Please adhere to the numbers in the recommendation with the need to maintain capital management.

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We expect the pair to rise from the levels specified in the recommendation. 

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The buy trade of the recommendation was activated on Thursday, and a profit was made with closing half of the contracts with the introduction of the stop loss

Best selling entry points

• Entering a short position with a pending order from levels 17.45
• Set a stop loss point to close the lowest support levels 17.65.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 16.40.

Best entry points buy

• Entering a long position with a pending order from 16.81 levels
• The best points for setting the stop loss are closing the highest levels of 16.44.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 17.11

The Turkish lira fell during the early trading today, as the markets absorbed the impact of the data released yesterday, which showed the rise in inflation in the country to record levels approaching 80 percent. The CPI rose 78.6% during June compared to the same month last year, as rising energy imports and the cost of food and drink led the index’s rise. The bad economic data appears to be able to swallow any limited gains for the lira after any action by the Turkish government and the country’s central bank. Despite last week’s gains, the lira lost most of those gains, with bad data coming in. Analysts attributed the main flaw in the policy of the Turkish Central Bank, which insists on following a stimulus policy unlike most central banks around the world, which is reflected in the lira, which is struggling for stability despite the indirect and direct interventions of the Turkish Central in the market.

On the technical front, the Turkish lira fell against the US dollar, the pair exited to trade from a narrow range, which is shown in the ascending channel on the four-hour time frame shown on the provided chart, as it broke the upper boundary of the channel. At the same time, the pair settled above the support levels that are concentrated at 16.70 and 16.48 levels, respectively. At the same time, the lira is trading below the resistance levels at 17.11 and 17.40, respectively. The pair traded above the moving averages 50, 100, and 200, respectively, on the four-hour time frame, as well as on the 60-minute time frame, indicating the bullish trend over the medium term. At the same time, the pair is trading the highest strong resistance levels represented in the 50 Fibonacci levels on the descending wave that started from 06-24-2022 until the top recorded on 06-27-2022. We expect the pair to rise from the levels specified in the recommendation. Please adhere to the numbers in the recommendation with the need to maintain capital management.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The buy trade of the recommendation was activated on Thursday, and a profit was made with closing half of the contracts with the introduction of the stop loss

Best selling entry points

• Entering a short position with a pending order from levels 17.45
• Set a stop loss point to close the lowest support levels 17.65.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the strong resistance levels at 16.40.

Best entry points buy

• Entering a buy position with a direct order from 16.81 . levels
• The best points for setting the stop loss are closing the highest levels of 16.44.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 55 pips and leave the rest of the contracts until the support levels 17.11

The Turkish lira fell during early trading today, as investors followed early reports issued by the country’s statistics institute that showed inflation rose 78.62% on an annual basis during the month of June, which exceeds analysts’ expectations. On a monthly basis, inflation rose less than expected as it rose by 4.95%, compared to the previous 2.98%. Inflation in Turkey continues to rise, reaching its highest level in 24 years, specifically since 1998, which is slightly higher than expectations and the highest level since 1998. The rise was led by the transportation sector, which rose by 123.37%, and the rise in food and non-alcoholic beverages prices by 93.93% contributed to pushing Inflation is up, and the prices of furniture and household appliances increased by 81.14%. Turkish President Recep Tayyip Erdogan previously approved raising the country’s minimum wage at the end of last week, amid promises to reduce inflation by the end of the year.

On the technical front, the Turkish lira fell against the US dollar, as the pair returned to trading in a narrow range, which is shown in the ascending channel on the four-hour time frame shown on the chart. At the same time, the pair settled above the support levels that are concentrated at 16.70 and 16.48 levels, respectively. At the same time, the lira is trading below the resistance levels at 17.11 and 17.40, respectively. The pair also traded between the 50, 100 and 200 moving averages, respectively, on the four-hour time frame as well as on the 60-minute time frame, indicating a short-term divergence. While the pair continues trading above the moving average 50 on the time frame of the day. At the same time, the pair is trading the highest strong resistance levels represented in the 50 Fibonacci levels on the descending wave that started from 06-24-2022 until the top recorded on 06-27-2022. We expect the pair to rise from the levels specified in the recommendation. Please adhere to the numbers in the recommendation with the need to maintain capital management.

I would be cautious about my position size, but I certainly only have one direction in mind.

The gold market had initially fallen on Friday and then fell even quicker once the inflation numbers came out much hotter than anticipated. However, the bond market reversed as people started to buy bonds in fear of a recession, and in a bit of a knock-on effect, this market has skyrocketed to pierce the 50-day EMA.

Looking at this chart, if we continue to go higher from here, we will more than likely attack the $1900 level. If we can break above the $1900 level, then it’s likely that we could see the gold market looking to the $2000 level. In general, I do like gold for the longer term, and after the action that we had seen during the day on Friday, it does suggest that there are plenty of buyers out there. I think now you can look at this as a “buy on the dips” type of scenario unless we see a significant shot higher in interest rates.

If we were to turn around, you have to believe that there is a significant amount of support at the $1835 level. Furthermore, you probably have support at the $1825 level as well. In other words, this is a market that will continue to be noisy, but it certainly looks as if people are willing to get involved and start getting long on any type of value that is offered. Ultimately, I do think that we eventually find the $2000 level, as the old correlation between inflation and gold reemerged during the Friday session.

I would be cautious about my position size, but I certainly only have one direction in mind. The Friday session changed almost everything, and now it’s simply a matter of trying to find some type of value. I don’t know that I would jump into this market right away, but if we get an opportunity to take advantage of value, then that’s what you should be doing. The 200-day EMA is flat and slicing through the candlestick for the day, so it shows that we are going to continue to see a lot of consolidation, and if we were to get the second impulsive candlestick, that will change the entire complexity of the market.

The price of the EUR/USD currency pair is still moving amid bullish momentum, which was able to move towards the resistance level 1.0786, recovering from its lowest level in five years. The euro’s gains came primarily due to a hawkish ECB policy escalation and a favorable international tailwind but will likely require continued support for both this week if overcoming technical resistance is immediately loomed in the market.

In general, the single European currency, the euro, rose further last week, recording its first set of consecutive weekly gains since the early days of the second quarter of last year. This is after China took steps to ease restrictions related to the Corona virus in Shanghai, and with policy makers in the European Central Bank signaling to a more hard-line policy stance. Allocations have been set for reopening Shanghai to advance further over the weekend while restrictions on activity in the Chinese capital, Beijing, have also been eased, which is important for the euro against the dollar given the extent of its losses since the last “lockdown” early in April.

The EUR/USD price fell from around 1.10 to 1.0349 between the April opening and mid-May and an important part of this decline was driven by developments in China and price action in the RMB exchange rates.

Anything supporting China’s economic recovery or normalization of the country’s foreign trade is noteworthy for the eurozone given that 10% of the bloc’s exports went to the world’s second-largest economy in 2021, which was also the source of 21% of eurozone imports. However, the general direction of the dollar and the monetary policy of the European Central Bank are also major influences, and both are likely to respond on Tuesday when Eurostat releases its estimate of eurozone inflation in May, which the market expects to rise from 7.5% to a new record high of 7.7% .

Some analysts doubt that the European Central Bank will actually raise interest rates in the eurozone with a larger-than-usual 0.5% increase in July, which will end the era of negative interest rates in Europe, but they note the risks of speculation in the markets in this direction over the coming weeks. This comes after several ECB board members, including ECB Governor Christine Lagarde and chief economist Philip Lane, expressed their support for higher borrowing costs that could end the era of negative interest rates in Europe any time before the end of the year.

According to the technical analysis of the pair: EUR/USD formed lower highs associated with a descending trend line that has been stable since mid-2021. It seems that the price has come for another test of this resistance, which lines up with the Fibonacci retracement levels on the daily time frame. As the 61.8% Fibonacci level is around the 1.0870 level and the closest to the trend line resistance. The price is already testing the 50% level around the 1.0770 level, which might also be enough to keep gains in check. If any of these levels hold, the euro against the dollar may resume falling to the swing low at 1.0340 or lower.

In the long term the 100 SMA remains below the 200 SMA to confirm that the general trend is still bearish and that selling is more likely to resume than reverse. The 100 SMA lines up with the trend line adding to its strength as resistance. The stochastic is already indicating overbought or exhaustion levels among buyers, so a turn lower means sellers are taking over. The RSI has a bit more room to go up, so buying pressure can continue and the correction may continue until overbought conditions materialize.

We expect the lira to continue to decline, especially if the pair closed above the resistance levels of 14.91.

Today’s recommendation on the lira against the dollar

Risk 0.50%

None of the buy or sell trades of the recommendation were activated yesterday

Best entry points buy

• Entering a long position with a pending order from 14.68 levels
• Set a stop-loss point to close the lowest support level 14.46.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the strong resistance levels at 14.85.

Best selling entry points

• Entering a short position with a pending order from 14.99 levels
• The best points for setting the stop loss are closing the highest levels of 14.98.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the support levels 14.40

The Turkish lira swallowed up yesterday’s gains, as the lira rose after the interest rate decision in the United States of America, which rose 50 basis points. All financial assets benefited from the dollar’s decline after the interest rate decision as the Fed’s decision was priced earlier. During today’s trading, the lira fell after the Turkish Statistical Institute revealed in a report that annual inflation in Turkey rose by 69.97% in April. This number represents an increase from March when the Consumer Price Index (CPI) rose 61.14% year over year. The biggest jump was recorded in transportation prices, with prices jumping insanely by 105.86% year on year, followed by food and non-alcoholic beverages with 89.10%. The smallest inflation rate was observed in telecoms at 18.71%. The Consumer Price Index increased by 7.25% compared to the previous month.

On the technical front, the Turkish lira fell slightly against the dollar during today’s trading, as the lira swallowed up yesterday’s gains. In general, the lira is still trading within a limited trading range. The pair also rose above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame. The pair is trading the highest support levels that are concentrated at 14.75 and 14.69 levels, respectively. On the other hand, the lira is trading below the resistance levels at 14.90 and 14.99. We expect the lira to continue to decline, especially if the pair closed above the resistance levels of 14.91. Please adhere to the numbers in the recommendation with the need to maintain capital management.

The stability around the highest levels in 20 years still characterizes the performance of the currency pair USD/JPY characterizes the performance of the currency pair for two consecutive weeks. The psychological top 130.00 still characterizes the dominance of the bulls. The US dollar is still the strongest against the rest of the other major currencies, supported by the expectations of raising US interest rates strongly during the year 2022 to contain the highest US inflation in 40 years. In return, the Central Bank of Japan provides more stimulus to the Japanese economy, which is suffering from the consequences of the epidemic and the Russian / Ukrainian war.

On the other hand, inflation of just 2% – relatively low in the current global wave of income-eroding price hikes – is likely to be enough to turn the real earnings of Japanese workers into negative, according to Oxford Economics.

Norihiro Yamaguchi, chief economist at Oxford, expects Japanese consumer prices to rise 1.7% this year, close to the Bank of Japan’s target of 2%. While this is more moderate than in many other economies, he said in a research note, real income in Japan will decline faster than in France, Australia, and other Asian countries due to modest gains in nominal income.

“The continued stagnation in the labor market in terms of working hours will affect the wages of part-time workers,” Yamaguchi added. And “for regular workers, traditional spring negotiations are likely to settle at a level that provides limited monthly wage increases throughout 2022.”

With working hours stagnating, labor market conditions in Japan are becoming more resilient than suggested by a 2.6% drop in the unemployment rate, Yamaguchi said. While inflation in Japan is quieter than elsewhere, households still face a steep rise in the cost of living from the fastest gains in energy prices in decades. Weak wages are a major reason why the central bank has committed to strict monetary easing in an effort to put the economy on a more sustainable recovery path.

About 3,300 unions in Japan achieved a 2.1% increase in average monthly wages in this year’s wage negotiations, according to Rengo, the largest trade union umbrella organization. Yamaguchi added that as smaller companies are added to the tally, the rise is likely to be curtailed somewhat. This week’s data showed Japan’s real wages fell 0.2% in March, the first decline in three months, as inflation weighed on household incomes. This is expected to affect consumption, which began to recover after virus restrictions were removed in late March.

According to the technical analysis of the pair: Today, the US dollar pairs are awaiting the announcement of US inflation figures, which will have a reaction to the expectations of raising US interest rates. In general, there is no change in my technical view of the price performance of the USD/JPY currency pair, as the general trend is still bullish and the psychological top of 130.00 is a culmination of the extent to which the bulls control the trend. Forex investors do not care about technical indicators reaching overbought levels after the pair’s recent gains. Continuing factors of the dollar’s strength, especially the future tightening of the US Federal Reserve’s policy, will remain an important factor for the bulls.

Currently, the best selling is waiting for profit taking operations from the resistance levels 131.30 and 132.20, respectively. On the other hand, it broke the support 128.00, a first penetration for the current upward trend.