The new
trading week is seen to be less dangerous and more complacent, definitely much
more relaxed than the previous one. It may seem that large investors have decided
to take a break in August to prepare themselves for a tough autumn. Thus, the
best sell opportunities may emerge in August, when the S&P 500 broad market
index and other stock market benchmarks will complete their correction cycles.
Nevertheless,
this week there are trading opportunities to be monitored. The expected primary
data is the Non-Farm Payrolls this Friday, PMI readings that are set to be
published throughout this week, the Bank of England (BoE) interest rates
decision on Thursday, and the OPEC+ meeting close to the end of the week. The Q2
2022 corporate reporting season is seen to be rather disappointing and could
hardly change market sentiment.
The S&P
500 index survived within the aggressive upside formation, moving close to the target
points of 4150-4250. But sit and wait tactics is seen more justified ahead of
the expected turmoil this autumn. Only when the first signs of this turmoil
emerge, short positions could be considered.
Brent crude
prices failed to breakthrough $107-108 per barrel resistance level amid the negative
news environment, which includes the fact that the Chinese PMI dipped to 49.0
points which translates into a contraction of the economy in China. In other
news, Libya restored crude production to 1.2 million barrels per day, while the
United Kingdom decided not to block insurance coverage of vessels with Russian
oil. However, the upside scenario with primary targets at $135-145 per barrel
of the Brent crude benchmark and extreme secondary targets at $160-170 are
intact.
Gold prices
continue to climb towards the resistance at $1800-1820 per troy ounce. Gold
prices may continue to rise by the beginning of September but are likely to
plummet in November towards $1350-1450 per ounce. So, it would be wise to wait
for the prices to reach the resistance level at $1800, and consider opening
small, short positions in September.
EURUSD
continues to move inside an aggressive upside formation with targets at
1.03500-1.04500 by the middle of next week. The support level at
1.01800-1.02000 could look like a good time to open long positions. But
considering the upcoming Non-Farm Payrolls data, these positions may not be
profitable either.
GBPUSD is
looking even more complicated after the pair met targets at 1.21500-1.22500.
There are more extreme secondary targets at 1.23500-1.24500, but this scenario
could be spoiled by the BoE’s interest rate decision. So, wait and see tactics
could be the best option here as well.