Daily summary: Bears are trying to quench market bulls. Indices are still up

6:57 PM August 11, 2022
  • US PPI inflation fell to 9.8% in July from 11.3%, stronger than expectations near 10.4%. Core PPI inflation also fell to 7.6%, compared to 8.2% previously and also below expectations at 7.7%. The prospect of an inflation summit surprised investors, with expectations for another Fed hike of 75 bps falling, with markets now considering 50 bps more likely;
  • Benefit claims rose to 262k against the previous reading of 248k and expectations of 265k. Continuing claims also rose above expectations;
  • EURUSD continues its upward movement, however, the area around 1.04 is again significant resistance. The US dollar continues to weaken against other currencies. Gold is trading flat today but still above $1,800 per ounce; silver maintains support at $20;
  • Index gains in Europe were 'anemic' today. The WIG20 gained more than 1.8%, Germany's DAX is on track for a weak session despite a rebound in the US stock market, with the index down almost 0.05%. London's FTSE lost 0.55%;
  • S&P500 gained 0.4% and erased some of the euphoric reaction from the opening. Bulls on the NASDAQ have been repulsed at 1550 points, the index is trading flat and erasing most of the gains from the start of the session. The Dow Jones is up 0.56%;
  • Oil is up more than 3% today and approaching the $100 level. Natural gas is also gaining dynamically, adding almost 7% and getting closer to 9 USD levels again;
  • Bitcoin remains above $24,000 however failed to break through the psychological barrier of $25,000. Growth also continues for the second largest cryptocurrency, Ethereum, which is above $1,900 today. The token's price continues its rally in the face of the upcoming September change to its blockchain known as 'The Merge'.

Indices today continued yesterday's gains, data readings supported the growing likelihood of the scenario of the Fed pulling back from its aggressive hike cycle although nothing is yet a foregone conclusion. Potentially, a change in the Federal Reserve's narrative could also be supported by the rising number of benefit claims. On the other hand, the US labor market is still strong, current data . However, improving risk sentiment is evident, which is well reflected in rising cryptocurrency valuations.

Bitcoin, interval D1. During today's session, we could observe the continuation of growth in the cryptocurrency market. Bitcoin quotes once again approached the key resistance zone at the round level of $25,000. This place is derived from the upper limit of the 1:1 system and the previous low on May 12. According to the Overbalance methodology, as long as this level is not exceeded - the downtrend is in effect. However, if it were to be negated, the upward movement could accelerate significantly. Source: xStation5

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