Weekly Market Analysis 24th June 2024

We are set for another action packed week, with numerous high-impact economic events and data releases poised to stir market volatility. Read this report to be ready for the upcoming trading opportunities!

On Tuesday 25th, the focus is on Canada with several crucial inflation indicators. There is the CPI month-over-month, forecasted at 0.3%, down from 0.5%, the Median CPI year-over-year, holding steady at 2.6% and Trimmed CPI year-over-year, slightly down to 2.8% from 2.9%

The Canadian inflation releases are expected to influence the Bank of Canada (BoC) decision in July as after this week there will be only one inflation update before the BoC's rate decision. Gasoline prices are set to lower the year-over-year CPI rate while the Core CPI measures, preferred by the BoC, remain critical. Meanwhile, BoC Governor Macklem will discuss wide-ranging topics, including inflation and upcoming GDP data for April and May will further inform economic assessments. Overall, housing's growing impact on CPI and basket adjustments will likely shape inflation trends and the BoC's response.

Later in the day, the US will release the CB Consumer Confidence index, forecasted to dip to 100.2 from 102.0. Lower confidence figures could weaken the USD, impacting market sentiment in the dollar-denominated markets.

Wednesday kicks off early with Australia's CPI year-over-year data, forecasted at 3.5% and down from 3.6%. This release will be crucial for AUD traders, as lower-than-expected inflation might pressure the Australian dollar.

Thursday brings a flurry of activity starting when Bank of England Governor Bailey speaks, potentially providing direction for the GBP. The US will release its Final GDP quarter-over-quarter data, forecasted at 1.4%, up from 1.3%. Simultaneously, Unemployment Claims are expected to rise slightly to 240K from 238K. Then, the Pending Home Sales month-over-month will be reported, with the previous figure at -7.7%.

The week concludes with the Canadian GDP month-over-month data, previously at 0.0%, and the US Core PCE Price Index month-over-month, expected at 0.1%, down from 0.2%. These figures are crucial for understanding inflationary pressures as some analysts suggest the PCE (Fed's favourite inflation measure) could provide us with a downside surprise.

Here are 3 markets to watch this week

USDCAD

The USDCAD has lost momentum lately after the market was trending higher for the best part of the year. The market is currently trading at last week's low (1.3680) while the Stochastic Oscillator (5.3.3) is oversold. If the support level holds and the market attracts buyers in the proximity of the 1.3680 level, we might see a rally to 1.3750 and then perhaps to 1.3780 on extension. Alternatively, below the 3680 level look for a retest of the bullish regression channel low. If it doesn't hold a move down to 1.3615 could be likely.

EURAUD

The EURAUD is trending lower with the SMA(20) below the SMA(50). The Stochastic Oscillator indicates the market is overbought suggesting it could be vulnerable to renewed selling from trend followers. The last complete 4h candle is bearish with a long wick above the candle body while the high of this candle is somewhat closely aligned with the 23.6% Fib level. Below 1.6125 a move down to 1.6027 could be in the cards while above this threshold level, we should look for a move to 1.6180.

Dow Jones

DJ (Dow Jones Industrial Average) has created higher reactionary lows at 38,281 and 38,742. The latter higher low was formed in a sideways formation that was then resolved to the upside. With both moving averages in the same area we might see buyers defending the level (should there be a retracement back to the level). Based on this it looks like the market remains bullish above the 38,742 level indicating that buyers could actually defend levels above it too. The nearest key (albeit minor) support level is at 39,064 and if the market either tests it successfully or breaks decisively above 39,274 we could see the Dow rallying to the 39,780 - 39,800 range. Alternatively, if the market breaks below the 38,742 level look for a move down to 38,450 or so.

This weeks high impact market events

The following economic events and data releases have the potential to cause considerable price movements, thereby offering you both opportunities and risks. Stay informed and leverage our economic calendar to access real-time data and analysis as these key events unfold.

All times are GMT +3

Tuesday June 25th

Wednesday June 26th

Thursday June 27th

Friday June 28th

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Janne Muta

Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.

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