SGT Chart Book

Market Observations, SGT Chart Book|31 Jul 2023

Last week, the Fed and the European Central Bank (ECB) implemented another 25-basis point hike, raising the rate to 5.5% and 4.25% respectively, a decision which aligned with market expectations.

Price pressures are abating, albeit gradually, while economic momentum is faltering. The data in the coming weeks will help shape expectations for rate decisions for September.

USA30 (Dow)

The Dow Jones' impressive winning streak finally came to an end.

After the unprecedented rise in the Dow, we witnessed an outside range day on Thursday, these usually signal and trend reversals. On Friday, the price action was muted, displaying an inside range day, where the high and low of the day’s trading was inside the previous day’s range. Indicators are still in over bought territory.

DAX40

The German stock market closed at new yearly highs taking out the previous post Covid rally.

USA100 (Nasdaq)

The past week showed a more consolidative behavior-to-price action, while holding above the previous resistance turn support zone as shown by the blue horizontal line.

EURUSD

Trend line support around the 1.0940/50 level held after the economic releases of the past week.

GBPUSD

GBPUSD continues to trace out a well-defined upsloping channel. Traders should be watching reaction at these extreme levels for clues to their next move.

USOIL (WTI)

As we can see from the chart below, crude has been trading sideways with the range defined by the upper and lower horizontal boundaries.

While sideways this is a wide range and plenty of money to be made and lost within the range. Prices are pushing to the upper levels, while daily indicators show overbought conditions.

The consensus seems to be for high oil prices longer term buoyed by a soft landing or no recession prediction for global economic picture.

XAU:XAG (Gold and Silver Ratio)

The ratio between gold and silver prices has been tracing out a larger triangle/pendant pattern. Watch for a break to confirm price action. This week’s homework assignment is to understand what this might be indicating if anything.

BTCUSD

More sideways action for the crypto markets. We will assume the longer the consolidation the more aggressive the price action might be when it finally breaks. An old boss told the trading desk said “Don’t predict, react”. Wise words.

Happy hunting…

SGT Trade Desk

Disclaimer: Trading Desk Observations are not trade recommendations. The purpose of these charts is to bring to your attention potential chart patterns you may wish to monitor.