Daily Analyses

22.07.2021

Fundamentals

Europe

In the Eurozone, where vaccination is gaining momentum and the economy is largely open, the Delta variant of coronavirus, which increases its impact, has deepened panic that new measures will be taken. Jens Spahn, Health Minister in Germany, the region's locomotive, said the number of countries with travel restrictions could be increased because of variant viruses. French Prime Minister Jean Castex raised concerns by announcing that they may declare a curfew after 23.00 PM, adding that Delta variant is common in the country and the fourth wave of the outbreak is at the door.

Meanwhile, the European Union (EU) dealt another blow to damaged relations by rejecting Britain's demand for a new deal on the Northern Ireland protocol. EU Commission Vice-President Valdis Dombrovskis softened the situation, saying that they would continue negotiations with the UK and explore creative solutions, while David McAllister, president of the European Parliament's Foreign Relations Commission, drew a red line by stating that they would not accept permanent flexibility. In addition, a German government spokesman said they had been in talks with the United States on North Stream 2 and would make a statement soon.

US

In the US session, developments on the deadlocked infrastructure package were the focus of markets. U.S. President Joe Biden gave Senate Majority Leader Chuck Schumer full authority over the infrastructure package, while Democratic Sen. Jon Tester said they are doing everything they can to make a deal with Republicans on the package. However, Senate Minority Leader Mitch McConnell dashed hopes for the package to come out, saying the Democrats' proposal threatens financial stability, while stressing that there would be no cross-party agreement without a tax deal.

Meanwhile, US Deputy Secretary of State Wendy Sherman will visit China on July 25-26 and meet with her Chinese counterpart Wang Yi. US Trade Representative Katherine Tai said the US was on Australia's side to support rules-based trade and would be opposed to China's practices of state support. In addition, the International Monetary Fund (IMF) announced that it had updated its 2021 global growth forecast to 6 percent.

Britain

In Britain, the agenda was the Northern Ireland protocol, in which the EU rejected its demand for a new deal. Following the rejection of the UK government's request for UK-produced goods to circulate freely in Northern Ireland and to change the trade division of the Northern Ireland Protocol, British Prime Minister Boris Johnson said he was optimistic they could find a permanent solution and wanted realistic action to be taken. Johnson's spokesperson explained that the EU did not consider its demands and did not even take time to think about it.

Britain's Brexit Minister David Frost stated that they could not solve the deadlock between the EU and Britain and that an agreement should be established and EU put the Good Friday agreement at risk. In addition, Victoria Saporta, the Bank of England's (BoE) executive director, stressed that there could be a surge in the regulatory buffer task, while the UK banking system remained resilient throughout the pandemic and continued to provide credit to the economy.

Asia & Turkey

In the Asian session, news from Japan was important. Japanese Prime Minister Yoshihide Suga said they were starting to see the positive effects of vaccination despite rising cases, while the Japanese government caused panic in the capital, Tokyo, by explaining that rising case numbers could strain the health system and increase the risk of SOE period. Bank of Japan (BoJ) Deputy Governor Masayoshi Amamiya, on the other hand, said that in an environment where interest rates are higher as vaccination gains momentum, they can achieve healthier growth, while the BOJ is independent of the government, and additional incentives may be added if economic conditions are guaranteed.

On the other side, Chinese Foreign Ministry spokesman Zhao Lijian claimed that the United States had carried out cyber attacks on China, suggesting that the United States and Japan had implemented a cold war strategy against them. In addition, the statement from the Chinese Cabinet shared the assessment that the yuan will remain stable and that imports and exports will expand in the second half of 2021. In Turkey, which is on a public holiday, President Recep Tayyip Erdogan calmed concerns by explaining that Covid-19 variants are not effective in Turkey.


Indicators

MSCI iShared ETF’s

Msciisharedetfs
MSCI iShared ETF’sDownload Image

MSCI ETF indices are used for measuring the performance of a stock market located within a certain region. Prior to take any actions regarding the relevant region, stock market investment funds follow up the ETF yields and risk measurement.

Volatility Indices

Volatilityindices
Volatility IndicesDownload Image

The VIX, also known as the fear index, is calculated based on the difference between the buy and sell prices of the options contracts where the stocks in the S&P500 index are the underlying assets. If the index value is below 10 points, it means that there is optimism in the markets and the investors are eager to take risks, the pessimism starts to increase slightly even if it is considered as the normal range when it is in the range of 10 – 20. When VIX is in the range of 20 – 30, it means that the stress in the markets has started. A score of over 30 means that the investors’ desire for risk-taking is under pressure and asset prices will fluctuate.


US Index

USIndex

In the US, Democratic members said they were working with Republicans to reach an agreement on the infrastructure package, putting some pressure on the dollar index. In addition to expectations of strong growth in the US, tapering comments from Fed members are keeping the dollar index resilient. However, after the breakout of the descending major trend, the index headed upwards and it may follow 93.30 after reaching 93.00. In case of possible retreats that the index may experience, 92.60 and 92.40 will be on our radar after the ascending minor channel is broken downwards.

Support92.4092.1091.90
Resistance93.0093.3093.60

Parities

EURUSD

The pair tested 1.1800 due to some easing of the US dollar, the world's most important reserve currency, while leading economies such as France, as the number of those affected by the Coronavirus outbreak increased, subdued euro assets by raising restrictions. In this context, the pair, which maintains its sales in the descending channel pattern, can break 1.1770 support and fall to 1.1735 as long as it stays below the descending intermediate trend it uses as resistance. 1.1835 will also be on our radar, if the intermediate trend is exceeded in possible bullish moves.

Support1.17701.17351.1700
Resistance1.18351.18651.1900

USDTRY

The strong course of the US dollar supports the positive outlook, while the bank holiday in Turkey causes low trading volume. From a technical point of view, if the pair, which retains its bullish potential, exceeds 8.6200 level, 8.6600 and 8.7000 will be on our radar. On the other side, 8.5000 and 8.4600 supports may also be followed for transactions in favor of TRY.

Support8.50008.46008.4200
Resistance8.62008.66008.7000

GBPUSD

The debate over the Northern Ireland protocol agreement between the UK and the EU is once again on the agenda, with sterling assets being decimated by this. Overshadowed by speculation that measures will be toughened due to increased coronavirus cases, the pair, which broke the major channel, could fall to 1.3620, in case, it breaks 1.3660 support by following the descending channel. On the other hand, the possible purchases in response may lead us to 1.3740 and 1.3780 levels.

Support1.36601.36201.3580
Resistance1.37401.37801.3820

USDJPY

The Japanese government's statement that they could extend the SOE to prevent rising cases put pressure on yen assets, moving the pair above the descending minor channel. Therefore, the pair, which received strong support above the 50-period simple moving average, may target 110.70, in case, it can move its earnings above 110.40 level. On the other hand, in a possible retreat that we may encounter in the pair, 109.85, which points to the upper boundary line of the descending channel, can be considered as the support.

Support109.85109.55109.25
Resistance110.40110.70111.05

Commodities

XAUUSD

Gold, one of the key members of precious metals group, broke the rising wedge as US long-term Treasury yields rose above 1.25 percent. The precious metal priced below the descending intermediate trend could fall to 1758 support, in case, it can break 1773 level after 1787 level. On the other hand, it may follow 1820 in possible short-term bullish transactions.

Support178717731758
Resistance182018331847

USOIL

With the new variant of the Coronavirus outbreak, Delta Plus, daily case numbers are increasing, raising concerns about demand in the oil market. Adding to these concerns, crude oil stocks have risen above market expectations and oil prices continue to price below the rising major trend. U.S. crude could focus on 68.40 if it breaks 69 USD. In possible purchases in response, crude oil may test 71.40 by exceeding the descending minor channel.

Support69.0068.4067.60
Resistance71.4072.0072.80

XAGUSD

Investor stress increased somewhat as worries about the Delta variant have grown in global markets. While silver recovered somewhat in this context, tapering comments from FOMC members are limiting those gains. From a technical point of view, Silver retains its bearish potential and it may fall below 24.95 support and follow 24.60 and 23.30. On the other hand, silver prices could rise to 25.70 and then 26.05.

Support24.9524.6023.30
Resistance25.7026.0526.40

Indices

DAX30

Concerns about the Coronavirus outbreak were growing, while investor risk appetite was subdued, suppressing the German index. But the index, which capped its losses along with the new trading day, faced backlash against the IMF's strong growth expectations. In this context, the index traded in the bullish course can rise to 15 680 resistance by exceeding 15 570 level as long as it remains above the lower barrier of the rising major channel. Otherwise, if it breaks 15 340 level with possible pressures, it will decline to 15 230 support.

Support15 34015 23015 120
Resistance15 57015 68015 790

SP500

The strong growth prospects of global economies are pushing the index up, bolstering investor risk appetite as Democrats and Republicans seek a common path on the infrastructure investment package in the US. If the index, which exceeds the descending minor trend, stays above the 50 MA, it will possibly climb to 4 395 resistance by exceeding 4 380 level. On the other hand, 4 340 support will be on our radar against any sales scenario.

Support4 3404 3304 310
Resistance4 3804 3954 410

Cryptos

BTCUSD

Although BTC increased after the supportive statements of Tesla CEO Elon Musk, the strong course in the US dollar continues to pressure the leading cryptocurrency. BTC is in a minor channel pattern and it is going downwards. If it does not exceed 34 000, we will follow 29 500 and 27 500 support levels. On the other hand, possible purchases in response may lead it to 34 000 and 36 000 resistance levels.

Support29 50027 50026 000
Resistance34 00036 00038 000

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