The market has punished the speculators

Morning Stock News

Gold   1974,715
(+0%)

EURUSD   1,177
( -0,05%)

DJIA  26267,50
(-0,21%)

OIL.WTI  40,01
(-0,92%)

DAX   12320,545
(+0,04%)

There’s a well known trading pattern. If the price goes one way (rising) during the month, the closing of the monthly candle will be at the maximum of this candle. This is exactly what speculators were waiting for, continuing to sell the US dollar against all currencies. But this time it did not work!


EUR/USD

EURUSD

July 31, the last day of the month, was the day of profit taking. The dollar rose sharply not only against EURO, but against all currencies as well. Including even shelter currencies, such as the Japanese yen and the Swiss franc.
At the same time, the data on GDP of France became an additional negative factor specifically for the EUR. The GDP of France in the second quarter fell by about 2.4 times less than that of the USA. However, this decline was perceived as “normal” in America. And in France, it was a disaster.
We think that the US economy is much more mobile than in the EU countries. American companies can very quickly reduce the volume of production and services, dismissing workers without consequences. In Europe, in terms of mobility, it’s much worse. And firing employees is a very expensive process.
So American companies, when the time comes, can quickly restore production volumes. But you can’t say that about European companies.


DAX 30

The above is confirmed by the European shares and in particular by the DAX 30 index. It behaves much worse than its American counterparts. Investors believe that the situation in Europe may start deteriorating rapidly again in autumn. Although, how much worse can it be? Therefore, those who prefer to invest in stocks, quite reasonably choose the American stock market.


Bitcoin

The first cryptocurrency continues to grow steadily following gold. On Sunday morning, the quotes were at $12150. Then within 10 minutes there was a powerful correction of 1500$. It is a movement that we all missed so much while the price was 1.5 months in a narrow corridor.
What caused such a sharp drop in the bitcoin? There’s only one reason. The stops were triggered and the price went down. If you look at the history, you can see that Sunday is the leader in such movements, compared to other days of the week. Big investors and speculators are resting, so even small sales volumes can move the market strongly.


What’s waiting for us today?

10:00 EU Manufacturing Index for July
10:30 UK Manufacturing Index July
16:00 US Manufacturing ISM Index July


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