What to Trade on August 1

Information is not investment advice

Last week was shocking!

The US dollar lost more than 1% against other currencies after the 75-basis-point rate hike by the Federal Reserve on Wednesday. As a result, GBPUSD reached 1.2200 and touched the 50-day moving average. The US stock market gained momentum. US500 broke above 4 000, while US100 reached 13 000. The oil market is heating up. XBRUSD broke through the resistance trendline, and it looks like bulls took control over this market.

Trade ideas

Forex

The upcoming week might bring even more volatility to the US dollar as a series of important macroeconomic data continues in America. Brace yourself for the ISM Manufacturing PMI, the ISM Services PMI, and Nonfarm Payrolls (NFP). The upcoming data is the primary indicator of US economic health. If the data shows the US economy's strength, it will let the Federal Reserve act tougher against inflation. As a result, the US dollar will increase, pressing other currencies, crypto, and stock markets.

Buyers can't break through the 1.0270 resistance on EURUSD. It looks like the price might decline towards the parity level. However, before that, the bears must break through the support level of 1.0080.

GBPUSD bounced off the 50-day moving average. The price might decline to 1.2000 for the retest of the descending trendline. If buyers don't hold this support, the pair might reach 1.1800.

Stocks

The US stock made a strong impulse in the previous week. If the US100 closes the D1 candle above 13 000, the way to 14 000 will be open. At the same time, if US500 breaks above 4150, it will head towards 4300.

Chinese Hang Seng has been declining during the past week. If the bears bring the price below 20 000, the price might decline further towards 19 300 and 18 300. On the other hand, if buyers hold the 20 000, the index might reverse to 22 000.

Oil, gas & metals

XBRUSD broke through the upper border of the descending channel, meaning buyers took control over the market. The closest resistance for XBRUSD is 105.50. If the price breaks through, it might increase to 108.50 and even 113.50.

XTIUSD follows the same trend. After the breakout from the descending channel, the main target is 103.00.

XAUUSD might get under pressure due to USD strengthening. If buyers don't push the price above the 200-period MA, gold will decrease towards 1745, a fundamental support level right now.

The breakout below this support will open the way to 1690 for XAUUSD.

FBS Analyst Team

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