Daily Market Analysis from Investizo

[Investizo]

General analysis USDJPY for 16.08.2022

Current DynamicsJapan's economy grew 0.5% in real terms from April to June. Consumption in Japan, which accounts for more than half of the country's GDP, grew on 1.1%, exports increased on 0.9% and imports increased on 0.7%. Builder confidence in the U.S. housing market fell harder than expected in August to its lowest level since the COVID-19 pandemic. Citizens of border areas in California started regularly traveling to Mexico for shopping products.GDP in Japan rose for the third quarter in a row. According to data released Aug. 15 by the country's Cabinet, Japan's economy grew 0.5% in real terms from April to June. Personal consumption, on which more than half of GDP accounts, increased on 1.1%.More people started going to restaurants and traveling after covid restrictions were removed in Japan. Capital spending increased on 1.4%. It is worth noting that in the previous quarter the same figure showed a decline from 0.3%.At the same time public investment in Japan also increased on 0.9% in real terms. In the previous quarter there was a decrease by 3.2%. Exports increased on 0.9%, and imports - on 0.7%.Even though Japan's economy grew at an annualized rate of 2.2%, which is worse than economists' expectations for 2.7%, Minister Daishiro Yamagiwa, who is in charge of economic recovery, said that Japan's economy is gradually recovering.Meanwhile in the U.S., builder confidence in the housing market fell in August to its lowest level since the COVID-19 pandemic. High inflation and rising borrowing costs have affected the downturn. The Wells Fargo index of the National Association of Home Builders (NAHB) in the United States, which measures the dynamics of the single-family housing market, fell for the eighth straight month and dropped to 49, which is the worst reading for the housing market since the financial crisis of 2008.Along with that, residents of California's border areas have started regularly traveling to Mexico for shopping products. For example, gasoline in Mexico for $1.24 cheaper than in California; milk is twice cheaper. Sellers and supermarkets in Tijuana are seeing a 20-30% increase of U.S. shoppers.Against the backdrop of declining GDP in the U.S. for the second quarter in a row, Japan's economy looks much better off. Low key interest rates and growing imports exports indicate the economy is recovering even though energy resources are expensive.

The USD/JPY tested the 38.2 Fibonacci level, but failed to consolidate near it and went back to the 50.0 Fibonacci level. Trend is descending. The RSI oscillator is in the lower half near 50.

Support and resistance levels

✔️ Support levels: 135.57, 134.43, 133.72, 133.15
✔️ Resistance levels: 132.57, 131.86, 130.70

Trading scenarios

✔️ Short positions can be opened below the level of 132.57 with a target of 131.86 and a stop loss of 133.72 : Implementation period: 1-3 days
✔️ Long positions can be opened above the level of 133.72 with a target of 134.43 and a stop loss of 133.15 : Implementation period: 1-3 days


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Analytical department investizo.com


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument.

 

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Fundamental analysis of GBP/USD

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Fundamental analysis of EUR/USD

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Fundamental analysis of WTI

WTI crude oil prices are showing uncertainty, fluctuating around the 81.65 level, indicating market caution over future US inflation and employment data. According to the Energy Information Administration, there was the largest inventory decline in the last four weeks, and according to the American Petroleum Institute - the record since September 2016. The oil situation is characterized by conflicting economic signals. China's manufacturing data fell for the fifth consecutive month, demoralizing the economy and casting a shadow over the outlook for the world's second-largest economy. Nevertheless, traders still have some hope as they await the Federal Reserve's decision and therefore the US personal consumption expenditure data is likely to have an impact on oil demand dynamics. Geopolitical events further complicate the global oil situation. The recent coup in Gabon has further complicated OPEC's supply outlook, while economic growth in the US has been revised down to 2.1% and private sector wage growth is set to slow for the foreseeable future. Against this backdrop, industrial unrest in Australia is shrinking the LNG market, while a shift in geopolitical alliance is changing the dynamics of global oil trade, with India and China becoming the largest consumers of oil from Russia.




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[Investizo]

Fundamental analysis of XAU/USD

Gold prices (XAU/USD) are showing strength, trading at 1943.70, and have recently reached a high since early August, supported by a number of factors, including a weaker US Dollar on speculation over future Federal Reserve decisions. Over the past few days, the US Dollar Index has pared gains, consolidating at 104.05, amid mixed data on the US economy that suggests the Federal Reserve may maintain its current interest rate policy at its next meeting in September. In addition, a series of economic measures aimed at stimulating the economy of China, a global powerhouse and one of the largest consumers of gold, pushed the XAU/USD exchange rate higher. Notable measures include the government's efforts to revitalize the private sector, as well as significant adjustments such as the People's Bank of China's reduction in the required reserve ratio. In addition, some Chinese banks have adjusted RMB deposit rates. The disappointing performance of US Treasury yields over the past few weeks has contributed to gold prices, especially as the XAU/USD pair remains steady above key technical support levels. Despite the recent US dollar rally, this momentum appears to be waning, which indirectly boosts gold's appeal. However, the prospect of further rate hikes later this year could limit the dollar's decline and thus limit gold's upside.




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[Investizo]

Fundamental analysis of WTI

Benchmark US crude oil WTI - currently trading around 86.70. The recent strengthening of prices is due to a number of factors, both domestic and global. According to preliminary data from the American Petroleum Institute, U.S. oil inventories declined by 5.5 million barrels in the week ending September 1. This figure indicates supply constraints. Globally, major oil producers Saudi Arabia and Russia played a key role in influencing the trajectory of WTI. Both countries have decided to extend voluntary oil supply cuts until the end of 2023. Saudi Arabia is expected to cut production by 1 million bpd in the last quarter of 2023. On the other hand, Russia has pledged to cut production by 300,000 bpd. It is important to note that this reduction will be assessed on a monthly basis depending on changes in market conditions. Under the influence of these factors, oil futures contracts rose. With quotes trading near a nine-month high, market sentiment indicates that a short-term supply cut is imminent.





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