17, July 2017

ECB meeting on July 20 is the main market event of the upcoming week

Following the results of Yellen's testimony before Senate and the latest weak data of US statistics, the market lowered the general expectations of a rate hike in the United States. Now this week, the ECB meeting is the main news event in the focus of the markets. We expect some increase in the volatility of the stock markets, as well as a slight change in the risk assessment if ECB Chairman Draghi confirms the overall expectations of the markets, about a gradual slowdown in the asset purchase program. Despite this the pressure on the dollar is likely to remain in the FOREX currency market. Last week, the dollar fell to new lows against the euro, the pound sterling, the Canadian and the Australian dollar. At FOREX, a new week begins near important psychological levels of resistance and the likelihood of high-volatility in FOREX trading is quite high.

Oil came close to the resistance of $ 49 - an important psychological level, which is an obstacle for further gains. We can also expect a small correction down from this level. At the weekend, Kuwait said that world oil reserves will decline more in the second half of the year on the back of a growing global demand for oil. Technically, with passage and consolidation above the $ 49 level, we can also expect that Brent price is returning to the area of ​​$ 51 per barrel.

Gold significantly gained last week after the bullish signal last Monday and now there is a general market expectation that there has been a reversal in the gold market. Traders can potentially look for another opportunity to buy this week at a low of $ 1214. The resistance is located at $ 1,240, which can be considered for careful shorts at the appropriate signal, if the price will confirm it in the coming days.

US economic data in the upcoming week is unlikely to change the mood of investors. The bill on health care reform in the Senate remains at a deadlock due to a lack of agreement between Democrats and Republicans. The sluggish scandal around Trump still can put pressure on stock markets and undermine the mood of investors as well.

China reported on GDP data in the second quarter. China is the first country to report its quarterly growth rate, which rarely deviates from expectations. The Bloomberg survey showed an average forecast of 6.8% year-on-year, which slightly decreased from 0.1% in the first quarter. The upcoming trading week promises to be volatile and interesting.