Weekly Market Analysis: July 26 –Aug 2, 2020
The TradeConnect weekly market analysis is now live. Don’t forget to download our IOS app to start trading our global financial markets.
Highlights:
- Crypto action is back with a big ETH breakout.
- The U.S. dollar is still bleeding.
- Stock indices are poised to correct lower.
- Oil is slowly drifting higher.
- Record weekly close for gold!
Crypto
After trading in a range for about 2 months, Ethereum broke out of it last week. At the moment, it’s trading at about $305 — a level not seen in more than a year.
Most other major cryptos also had a good week last week. Examples are Bitcoin, OmiseGo, Litecoin, ZCash, EOS, and Dash.
Overall, of the major cryptos, Ehtereum and ZCash are the most bullish. Bitcoin, OmiseGo, Litecoin, EOS, and Dash are still trapped in sideways consolidations.
Forex
The U.S. dollar had a terrible week last week, losing ground against all other major currencies. What we’re seeing at the moment, in particular, is that major European currencies are performing exceptionally well.
Last week, the euro and the pound each gained more than 200 pips against the dollar while the Swiss franc gained almost 200 pips.
Besides the U.S. dollar which is really weak, currencies that are relatively weak at the moment, are the South African rand (ZAR) and the Mexican peso (MXN).
Stock Indices
For the first time in weeks, global stock indices are showing signs of exhaustion. The S&P 500 and the Dax both have long upside wicks on last week’s (weekly) candlesticks. Both instruments have also moved lower last week.
Other indices also look really heavy. This includes the UK 100 and the CAC 40, which have both declined last week.
Energy
WTI and Brent crude have both gained less than $1 last week. Both instruments are still in bullish territory. It does seem like the bulls are somewhat exhausted, though, especially with such small gains in a week when the U.S. dollar experienced an aggressive decline.
Although oil prices are holding up well, traders should not be amazed if we see a downward correction soon.
Precious Metals
Gold had its best week since late March and is fast approaching its all-time high of 1920.70. The current price is 1901.56, which is a new record weekly close.
In market conditions like this, it’s difficult to say what will happen next. In the past, the gold price made a sharp move lower immediately after trading in the region of $1,900. Both buyers and sellers should be cautious at this time.
Conclusion
Instruments to keep an eye on this week, include:
- Gold — will the bulls take out the historical price high of September 2011?
- EUR/USD — can we go higher into overbought territory or is it time for a correction?
- Ethereum is a hot and volatile crypto to trade at the moment.
- USD — look out for opportunities to sell the dollar.
