Weekly Market Commentary | 07-13.11

Want to know what’s going on this week? Take a quick tour of market news, economic updates, and trading setups that’ll keep you up-to-date and in the know.

Monday>

– The new week starts fairly quiet with the main events in the calendar being speeches from central bankers: ECB President Lagarde and two FOMC members: Collins and Mester

Tuesday>

– Tuesday will bring us more comments from central bankers with the speeches from SNB Chairman Jordan and the RBA Governor Lowe.

– Tuesday is also the day of the US congressional midterm elections. Remember that Democrats currently control the House and have a majority in the Senate. Will there be a Republican seep?

Wednesday>

– This will be one of the quietest Wednesdays in recent weeks. No tier-1 data but it will be interesting to see the inflation number in China and, in the absence of other numbers, the crude oil inventories.

Thursday>

– By far the most important data will be published on Thursday – Inflation in US. Core CPI is expected to come at 0.5%, which would be a decline from the previous month print of 0.6%

Friday>

– This relatively calm week will round off with the GDP data from UK, where we are expecting another decline. This time -0.4% compared to previous -0.3%

– More important data will be Prelim UoM Consumer Sentiment, which is expected to come at 59.9

– On Friday, expect lower volatility and liquidity as many markets will be closed due to various different holidays (depending on the country) related to the end of the First World War.

Setups for This Week:

Gold

Primary View:

Gold starts a new week just below the crucial long-term resistance on 1680 USD/oz (orange)

Breakout of this level can bring us a major, long-term buy signal

Alternative View:

If the price bounces off this resistance, the negative sentiment will persist

DAX

Primary View:

Last week was great for indices across the globe

DAX managed to break the long-term down trendline (green) and also to defend it as the closest support

As long as we stay above, the buy signal is ON

Alternative View:

The price closing a day below the green down trendline will mean a strong sell but this scenario is less likely to happen

USDCAD

Primary View:

USDCAD managed to complete the big Head and Shoulders Pattern

We are currently on the neckline, where sellers are fighting to bring the negative sentiment back

The price closing a day below the neckline (yellow) will give us a proper signal to sell

Alternative View:

If the price bounces off the neckline and aims higher, neckline will be defended along with the positive sentiment