This Week’s Economic Calendar
The recently concluded week has continued to showcase strong institutional sponsorship that has been evident since the beginning of June into July. During this period, the US dollar delivered within the framework of low-resistance liquidity runs, aligning with intermarket symmetry as it repriced into discount targets, as we discussed live on the Sunday stream.
The further decline in the dollar was confirmed by interest rate triads and seasonal tendencies, as leading macro indicators supporting a sell program. This reinforces the current bias towards weakness in the dollar for the near term, emphasizing a reliance on sell models within the prevailing sell program until a break of structure is seen.
As August wraps up, the market has delivered within a framework of volatile repricing and large ranges. Looking ahead, we anticipate further low-risk, high-probability opportunities to present it self. Emphasis remains on meticulous trading and tight risk management as we approach a new week filled with significant reports, particularly the Core PCE numbers on Friday at 8:30 AM, which will be a key focus.
Please note that this is not financial advice.*
Monday:
Given that it’s the first day following a large range Friday for DXY, characterized by a massive repricing into our discount targets, combined with the last week of the month and a Monday, it’s crucial to exercise patience and manage expectations. Medium-folder news drivers at 8:30 AM are expected to inject volatility providing price runs to algorihtmic reference points at this time. The recommendation is to wait for the opening range and then focus on identifying the most probable higher time-frame draw on liquidity around the 10:00 AM silver bullet.
Tuesday:
Medium and red folder news drivers are scheduled for 9 AM and 10 AM, respectively, coinciding with the Silver Bullet hour. This is expected to inject volatility into the markets, presenting optimal trading opportunities. Traders are advised to focus on the 10 AM Silver Bullet and the PM session for higher probability trades.
Wednesday:
Expect heightened market volatility between 1:15 AM and 10:00 AM due to the influence of medium-impact scheduled news drivers. Anticipate optimal trading opportunities throughout the day,encompassing both the AM and PM sessions.
Thursday:
Red and medium-folder news drivers are expected to flood the market throughout the AM session, starting as early as 8:30 AM and transitioning into the Silver Bullet distribution hour. Traders should anticipate volatility injections that could facilitate smoother trades and present high-probability, low-resistance trading conditions. To optimize trading opportunities, focus on the 7-8 AM Silver Bullet, the 10 AM Silver Bullet, or the PM session.
Friday:
Volatility injections are anticipated in the AM session between 8:30 and 10 AM, coinciding with the Silver Bullet hour, facilitated by red and medium-tier news drivers. If your weekly profit objectives haven’t been met, redirect your focus to identifying the most probable higher timeframe draw on liquidity during the 10 AM Silver Bullet window or in the PM session if a high probability setup can be justified.
Earnings Spotlight: Major Corporate Reports Unveiling This Week – Key Insights for Investors
Earnings Reports Impact: A gentle reminder to fellow traders: anticipate significant price movements surrounding earnings reports in large-cap companies. This period often presents strategic trading opportunities, capitalizing on heightened volatility for smoother trades.
The upcoming week is centered around earnings reports, with several large-cap institutions set to release theirs.BHP, BMO, Allot, NVIDIA, Salesforce, CrowdStrike, HP, Best Buy, Dollar General, and Dell are in focus.Traders should expect volatility and potential consolidation in the lead-up to these reports.
The Cot Report For The US Dollar
All the discount targets outlined in last week’s newsletter have been decisively met, with the dollar continuing its freefall, beautifully repricing into these set targets. The week closed on a bearish note at 100.677. Given the dovish tone and contractionary monetary policy embarked upon by the Federal Reserve, leading to lower interest rates, further downside targets and continued weakness in the US dollar are expected in the longer term.
Analyzing the COT report, particularly focusing on commercials engaged in hedging activities, reveals that commercials continue to hold more short positions than longs. This positioning confirms their anticipation of lower prices for the US dollar in the near future. This outlook aligns with the series of bearish closing weeks we’ve observed, with the recently concluded week following suit on a strong note.
What does this signify for us as traders? The US dollar remains heavily bearish, with the focus on 100.60, 100.02, and 99.59 as discount targets going into the new week. The overall outlook remains firmly bearish unless we witness a break in structure to the upside.
Seasonal Tendencies
The US Dollar
August is slowly rounding up, making way for September to roll in as large funds and market makers begin building new positions and assuming risk. This is done by strategically feeding on the fear of uninformed money, capitalizing on it as liquidity for the losing counterparty. Seasonal tendency for September is expected to see a massive repricing into discount targets for the month, which is anticipated given the volatility we’ve seen so far. The emphasis remains on reading institutional order flow and managing risk appropriately, setting us up for a longer-term macro price run in the near future. Intermediate targets for the new week remain at the 99.5 level in my analysis, supported by both technicals and fundamentals.
Fundamentals will continue to play a crucial role in price delivery, providing a rationale for deep pockets and central banks to strategically provide liquidity, taking advantage of current volatility to rapidly reprice into set targets. This is expected as we finally leave the weekly range between 99-107, especially with the US presidential elections drawing near.
Stay informed for sound decision-making, and always adhere to strict risk management protocols.
Until our next update, trade wisely.
Happy Trading!
Adora Trading Team
