Weekly Market Analysis 12th August 2024

This week is set to be a pivotal one for traders, with several key economic events likely to drive market volatility. The absence of high impact news on Monday offers a brief respite before the week's heavy schedule.

Read the full report and be prepared to trade the market opportunities ahead.

UK employment data, US inflation data

Tuesday starts with the UK as the Claimant Count Change data release. Forecasts suggest a reduction to 14.5K from the previous 32.3K. A figure below expectations could strengthen the Pound, while a higher number might exert downward pressure on GBP. Later in the day, the US releases its Core PPI and PPI figures, with both metrics expected to come in at 0.2%. These inflation-related indicators will be closely watched for any surprises that could influence the Fed's policy outlook.

NZD interest rates, UK CPI

Wednesday sees action shift to New Zealand, where the Reserve Bank of New Zealand (RBNZ) is expected to maintain the Official Cash Rate at 5.50%. The accompanying RBNZ Monetary Policy Statement and Rate Statement will provide insights into the central bank's future policy direction.

In the UK, the year-over-year Consumer Price Index (CPI) is forecasted to rise to 2.3% from the previous 2.0%, which could influence the GBP. Meanwhile, the biggest risk event this week is the US inflation data release, with Core CPI and CPI year-over-year figures expected to remain stable at 0.2% and 3.0%, respectively. Any deviations in these figures will be critical for assessing the Fed's future policy direction.

AUD employment data, UK GDP

Thursday's focus will be on Australia, where Employment Change is forecasted to increase by 20.4K, a slight decrease from the previous 50.2K. The Unemployment Rate is expected to hold steady at 4.1%. Strong employment figures could provide a boost to the AUD. Later in the day, the UK’s GDP month-over-month data is projected to show minimal growth at 0.1%, down from 0.4%, which could influence GBP trading. The US rounds off the day with key releases including Core Retail Sales, Retail Sales, and Unemployment Claims, which are forecasted to show slight improvements.

UK retail sales data

Friday is relatively quiet but significant for the UK, with Retail Sales month-over-month expected to rise by 0.6%, a reversal from the previous month's -1.2%. This could be a key driver for the GBP as the week comes to a close.

Here are 3 markets to watch this week

Dow Jones

Dow Jones index rallied on Thursday but then struggled to close above the daily timeframe SMA(50) creating a momentum loss candle on Friday. This increases the probability of the index trading lower from the current levels. If Friday’s low at 39,212 is violated we might see the market trading down to 38,980 while a decisive break above the 39,625 (Friday’s high) would indicate a move to the 39,800 – 39,850 range could be likely.

Gold

Gold is trading higher with the fast SMA(20) pointing higher above the SMA(50) which also trends up. With the market breaking into new highs and creating higher lows we might see further upside above 2416,90. Above this level gold could have potential to trade to 2455. Alternatively, should the market turn bearish and break below the 2416,90 a move down to the SMA(50) or 2410 might be likely.

USOIL

USOIL rallied strongly after attracting buyers near a key weekly support level at 71.44. The daily timeframe trend has now reversed from bearish to bullish, and the market remains bullish above 74.93. The 20 and 50 period moving averages roughly coincide with this level that supported the price of oil on Friday. USOIL might have potential to trade up to 78.90. Alternatively, if the market breaks below the 74.93 level, look for a move towards 73.85.

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.

Time (GMT +3)

Tuesday 13th August

Wednesday 14th August

Thursday 15th August

Friday 16th August

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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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