The Week Ahead 17th – 21st July: Big cap earnings ahead

<p>Welcome to Key to Markets preview of the Week Ahead.</p>
<h2>Currency Pair Performance</h2>
<p>5-day performance as of <strong>July 13, 2023. 10:30 GMT.</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24241 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1-1.png" alt="" width="600" height="285" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1-1.png 600w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-1-1-300×143.png 300w" sizes="(max-width: 600px) 100vw, 600px" /></p>
<p>Source: finviz.com</p>
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<h2>10 Big Stories Last Week</h2>
<p>In case you missed it…</p>
<p><strong>US inflation cooled by more than expected.</strong> US CPI eased to 3% YoY in May, down from 4% in April. Core inflation eased to 4.8%, down from 5.3% and below the 5% forecast.</p>
<p><strong>UK wage growth hit a record high.</strong> UK wages rose to 7.3% in 3 Months/Yr May, above the 7.1% forecast, raising bets of a more aggressive BoE. GBP/USD rose to a 15-month high over 1.30.</p>
<p><strong>Oil rose to a 2-month high.</strong> A weaker USD, close to record China oil imports in June &amp; hopes that the Fed could soon end its hiking cycle.</p>
<p><strong>USD fell to a 15-month low.</strong> This USD has plunged as the market sees a July rate hike as the final hike in the Fed’s tightening cycle. USD/JPY tumbled 2.6% this week.</p>
<p><strong>BoC hiked rates to 5%.</strong> The central bank raised interest rates by 25 basis points to its highest level in 22 years and left the door open for further hikes.</p>
<p><strong>Microsoft – Activision deal is a step closer.</strong> Microsoft won a crucial case against the Federal Trade Commission, clearing the way for it to acquire the Call of Duty maker.</p>
<p><strong>US banks kick off Q2 earnings season.</strong> The bar has been set low for this earnings season, and disappointing numbers could help slow the rally in the S&amp;P 500.</p>
<p><strong>Nvidia to invest in ARM.</strong> Reports surfaced that Nvidia is in talks to be an anchor investor in ARM’s IPO, which could take place as soon as September.</p>
<p><strong>Amazon launched Prime Day.</strong> Data showed that the 2-day event was off to a strong start. On Tuesday, the first day, US online spending rose 6% to $6.4 billion, the biggest e-commerce day this year.</p>
<p><strong>Apple launched an online store on WeChat.</strong> The new store on China’s Tencent platform allows users to purchase the full line of Apple products.</p>
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<h2>Chart of the Week</h2>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24244 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2-1.png" alt="" width="602" height="284" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2-1.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-2-1-300×142.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: Bloomberg</p>
<p>US inflation slid to 3% YoY in June, a more than 2 year low and down significantly from 9% where it was a year ago, a 4-decade high. Both headline and core CPI cooled by more than expected, suggesting that the Fed is winning in its battle against inflation.</p>
<p>While another 25 bps rate hike is widely expected later this month, bets are rising that will be the end of the Fed’s hiking cycle. July’s FOMC meeting could see more officials become sceptical that further rate hikes are needed.</p>
<p>Ryan Sweet, Chief US economist at Oxford Economics, said, “The new data could give the Fed reason to debate whether any further rate hikes after this month are needed.”</p>
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<h2>5 Things to Watch This Week</h2>
<p><strong>1. UK CPI</strong><br />
UK CPI will be released on Wednesday, 19th July. Consumer prices held steady at 8.7% YoY in May, raising concerns that inflation in the UK was stickier than feared amid high services inflation and strong wage growth. Since then, the BoE raised interest rates by 50 basis points, and data has shown wage growth rose to a record high in the 3 months to June fueling bets that the BoE could hike rates by a further 50 basis points at the August meeting.</p>
<p><strong>2. US retail sales</strong><br />
May retail sales rose at a slower pace of 0.3% MoM but more than analysts forecast, showing that consumer spending remained resilient, thanks in part to the resilient jobs market. Despite June’s NFP showing the weakest headline job creation since December 2020 and rising interest rates, expectations are for retail sales to rise 0.5% MoM.</p>
<p><strong>3. Netflix earning</strong><br />
Netflix is due to report Q2 earnings on Wednesday, 19th July. The results come as the share price trades at a 17-month high amid the success of the crackdown on passwords and as Netflix ad-supported business could start to play a bigger role in the overall business context. Wall Street is forecasting revenue of $8.28 billion, up 4% annually, and EPS of $2.85, down from $3.2 in the same quarter a year earlier.</p>
<p><strong>4. Tesla’s earnings</strong><br />
Tesla is due to report Q1 earnings on Wednesday, 19th July, a quarter which saw the EV maker post record deliveries of 466,130 units. The 83% year-on-year rise in deliveries came as Elon Musk slashed prices across the board to boost demand and as Model 3 and Y became eligible for a $7500 tax credit in the US, making them more accessible to a broader base. Tesla is expected to report revenue of $24.68 billion, a 45% year-on-year growth. EPS is expected to come in at $0.82.</p>
<p><strong>5. US bank earnings</strong><br />
While Citibank, JP Morgan, and Wells Fargo kicked off earnings season last week, this week sees the release of Q2 earnings from Goldman Sachs, Bank of America, and Morgan Stanley. Both Goldman Sachs and Morgan Stanley have laid off staff to keep costs under control as economic uncertainty weighs on their trading and advisory businesses. In addition to costs, net interest margins, investment banking fees, and deposit trends, bad loan provisions will also be in focus as recession fears rise.</p>
<p><strong>Economic Calendar Highlights</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24247 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3-1.png" alt="" width="602" height="411" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3-1.png 602w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/Chart-3-1-300×205.png 300w" sizes="(max-width: 602px) 100vw, 602px" /></p>
<p>Source: FXStreet.com</p>
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<h2>Technical Analysis:</h2>
<p>TA of the major asset classes (Forex – Commodities – Indices…).</p>
<p><strong>EUR/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24250 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/EURUSD-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>EUR/USD is in an uptrend, making higher highs and lows and above the 50 SMA.<br />
After holding the 50 SMA as support, the price has surged out of its corrective pattern into a new uptrend, marking its highest since February 2022. 1.133 and then 1.145 are the next potential upside objectives, while broken long-term resistance at 1.110 is major support.</p>
<p><strong>GBP/USD (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24253 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/GBPUSD-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>GBP/USD is in an uptrend, making higher lows and highs and above the 50 SMA.<br />
Price held above 1.26 and the 50 SMA and launched into a new up move above the big 1.30 handle. 1.32 and then 1.335 are the next potential resistance levels, while broken resistance at 1.288 is major support.</p>
<p><strong>USD/JPY (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24256 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/USDJPY-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>USD/JPY is a correction of an uptrend, making a lower low and below the 50 SMA.<br />
The uptrend looks to have finally ended with a large 700-pip drop from above 145 to down to 137, which is resistance-turned-support from the sewing highs in February and April. Any rebound may find resistance in the zone around 140.</p>
<p><strong>Gold (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24259 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XAUUSD-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XAU/USD is in an uptrend making higher highs and lows above the 50 SMA.<br />
The gold price rallied above and then re-tested the 50 SMA. The RSI held above the oversold zone throughout the correction since May, suggesting a new uptrend could be just starting.</p>
<p><strong>Brent Oil (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24262 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XBRENT-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XBRENT is in an uptrend with a new higher high above the 50 SMA.<br />
The price followed through on the break of the 50 SMA we referenced last time and has surged up over the big 80-handle. The former range ceiling at 78.50 is now major support to any pullback.</p>
<p><strong>US500 (Daily Candlestick Chart)</strong></p>
<p><img decoding="async" loading="lazy" class="alignnone wp-image-24265 size-full" src="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7.png" alt="" width="2556" height="1227" srcset="https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7.png 2556w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7-300×144.png 300w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7-1024×492.png 1024w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7-768×369.png 768w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7-1536×737.png 1536w, https://www.keytomarkets.com/blog/wp-content/uploads/2023/07/XUS500-7-2048×983.png 2048w" sizes="(max-width: 2556px) 100vw, 2556px" /></p>
<p>XUS500 is in an uptrend, making higher highs and lows above the 50 SMA.<br />
Price is king and ultimately ignored the bearish divergence pattern put in by the RSI to form new highs over the big 4500-level. The former consolidation ceiling at 4450 is now support, followed by 4380, while 4600 is a likely new upside target.</p>
<p>Thank you very much for reading – and have a great week trading!</p>
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<p>The post <a rel="nofollow" href="https://www.keytomarkets.com/blog/analysis/the-week-ahead-17th-21st-july-big-cap-earnings-ahead-24240/">The Week Ahead 17th – 21st July: Big cap earnings ahead</a> appeared first on <a rel="nofollow" href="https://www.keytomarkets.com/blog">Key To Markets Blog</a>.</p>