| Weekly Report (July 26th - 30th 2021) First of all, for those who missed it, we are delighted to announce the merger of ForexAnalytix and ForexFlow Live! This move brings great benefit and synergies to our clients, incorporating the best features of the two companies and bringing excellent quality content together in one platform. To celebrate, we are offering great savings to our Premium plans, with the following deals: - Buy one month and get one month free on Premium Monthly
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There was great anticipation going into the past week, mainly due to the FOMC meeting. Having hinted that they had started to "think about talking about tapering" asset purchases, traders waited anxiously for more direction from the Fed. Unfortunately, that wasn't to happen, as Jerome Powell was once again dovish and didn't indicate that tapering is any closer. Market participants will now have to wait patiently for the upcoming Jackson Hole symposium for more clues. | | | The US Dollar didn't like the Fed's dovishness and finally broke its winning streak. US economic data continues to come in mixed, and all eyes are now on Jackson Hole in a few weeks' time. Last week the DXY index fell 0.9% to close at 92.09.
The Euro found some strength on the back of some strong economic data – inflation easily beat expectations, with German CPI now at 3.8% YoY and Eurozone CPI exceeding the 2% target for the first time since 2018.
The Pound had a strong week in the absence of any significant economic data. The high vaccination levels are showing that even though Delta variant infections are rising, hospitalisations and death percentages remain very low. This is good news for the UK economy, as it implies that normality may return sooner rather than later. The GBP rose around 1% against many majors and showed great strength last week. | | | Commodity currencies were mixed, as the market tried to digest the Fed's dovishness and equities moved sideways. The AUD and NZD were mostly flat, while the NOK, CAD, JPY, and MXN all rallied around 1%. The day's outperformance came from the CHF, which gained 1.5% against the Dollar.
Oil rebounded strongly for the second week in a row and could continue to do so until OPEC+ agree to substantial production increases. Last week WTI rallied 2.2% to close at $73.66 and it's getting within striking distance of $75 resistance once again.
Precious metals are trying to rally but they remain weak given the prevailing fundamentals. With inflation rising sharply and the Fed remaining dovish, metals should have been performing a lot better; this should worry bulls. Last week Gold rallied 0.7% to $1814, and Silver gained 1.3% to close at $25.49. | | | The Week Ahead Video Preview:
Our "Week Ahead Preview" is delivered in video form including a review of important charts and price action. Follow the link below to watch Blake Morrow's next week's insight:
| | | | Equities moved sideways all week, edging closer to new all-time highs. With most major central banks remaining dovish, risk assets seem to have no alternative but to grind higher. Valuations are very high but, as they say, "as long as the music keeps playing you have to keep dancing". Last week the S&P500 index drifted 0.2% lower to 4403 points and the DAX slid 0.8% lower to 15561 points.
Bonds were helped by the dovish Fed and continued to show strength. At some point something's gotta give in the US - 3%+ inflation and 10y yield at 1.25% cannot coexist for long. For the moment, however, bonds are very strong and shorts continue to get squeezed. Last week the 10y UST yield fell 5bps to 1.25% and the 10y Bund rallied 0.4% to close at 176.561 points.
Finally, crypto currencies trade very strongly yet again. Bitcoin seems to have made an incredible false breakout below $30k, and within days it's flirting with big resistance at $42k. At the time of writing Bitcoin is up 22% at $41500 and Ethereum is up 20% at $2600. | | | The Week Ahead:
The week ahead could likely be more of the same, as we are still deeply into summer trading. As long as central banks remain dovish it will be difficult to get proper two-way markets, and this is extremely frustrating for traders.
Data-wise we have a number of PMI releases, as well as interest rate decisions from the RBA and the Bank of England. We close the week with the usual NFP volatility – good luck and trade safe! | | | Major data releases last week included: | | | Major events next week include: | | |  | Subscribe to our Youtube channel to get directly notified for all new analysis videos we upload. You can also find there a repository of our platform presentation and tutorial videos as well as all past analysis videos we have uploaded. | | |  | Visit our Education section which includes brief descriptions and insights into each analysis type. It is a great reference tool for new and experienced traders alike! Video material will also be included in the near future. | | | | | |
What drives the global financial markets to shift gears? Is it geopolitical uncertainty , central bank decisions , or the relentless march o...
