This blog references an opinion and is for entertainment and informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
In this 88th edition of the Market Outlook here at Ostium Insights, we’ll be taking a look at the week ahead in markets, looking at price-action, positioning and event risk for SPX, USD/JPY, EUR/USD, JP225 and Silver.
Let’s first take a look at the week ahead, which is heavy on the interest rate decisions, with focus squarely on FOMC on Wednesday:
MONDAY: US DURABLE GOODS ORDERS (JUN): (CONSENSUS 1.6% VS PREVIOUS -4.5%)
WEDNESDAY: US FED INTEREST RATE DECISION: (CONSENSUS 3.75% VS PREVIOUS 3.75%)
WEDNESDAY: FOMC PRESS CONFERENCE
THURSDAY: BANK OF ENGLAND INTEREST RATE DECISION: (CONSENSUS 3.75% VS PREVIOUS 3.75%)
THURSDAY: US CORE PERSONAL CONSUMPTION EXPENDITURES (YOY) (JUN): (CONSENSUS 3.3% VS PREVIOUS 3.4%)
THURSDAY: US INITIAL JOBLESS CLAIMS: (CONSENSUS 204K VS PREVIOUS 187K)
FRIDAY: BANK OF JAPAN INTEREST RATE DECISION: (CONSENSUS 1% VS PREVIOUS 1%)
FRIDAY: US UOM 1-YEAR CONSUMER INFLATION EXPECTATIONS: (CONSENSUS 4.2% VS PREVIOUS 4.2%)
Now, let’s dig into asset-specific price-action for the week ahead, looking firstly at SPX:
SPX:
Price: $7488
Weekly:
If we begin by looking at SPX on the weekly timeframe, we can see that it continues to chop around inside this multi-month range, compressing ever-tighter but remaining above the anchored VWAP from the yearly lows for the time being.
Whilst price is sandwiched between this support at ~$7280 and resistance at all-time highs it is not really of much interest, as I expect we just keep chopping market participants around and frustrating both sides. If we do see a weekly close below that anchored VWAP, and thus also a downside break of this range support at $7330, then we can start looking at a deeper correction, likely back towards the 365d rVWAP and prior all-time highs turned support around $7000 for a potential higher-low formation within this longer-term uptrend; conversely, if the anchored VWAP continues to hold and price resolves higher from this range, flipping $7600 into support, I think we continue towards $8000+ into year-end from there and those awaiting a deeper pullback do not get that opportunity. Not much else to add on this timeframe for now.
Daily:
Turning to the daily, we can see just how choppy the recent price-action and momentum has been, particularly since putting in that June low, with no real structure - just consolidation right around the mid-range and the anchored VWAP from all-time highs around $7450. We are also sat on the 90d rVWAP with price struggling to hold above the July VWAP over the past week, and if we lose $7430 here I would expect another attempt at $7300 to follow, where the reaction will dictate short-term trajectory, as discussed above. Holding that area as support and then reclaiming the mid-range would open up another test of all-time highs, above which the next minor fib level would be $7880. Acceptance below the June low at $7240 and I think we’re nailed on for a 200dMA retest into $7000ish, but likely front-running that area. As mentioned a couple of weeks ago, my only equity exposure is now the ETF L/S strategy I run instead of passive, having exited all levered SPX exposure around $7600 and redistributed some of that into Bitcoin at $60k. Again, this is simply an expression of my expectation for better performance from here into 2027 for BTC vs SPX, with much of the ‘easiest’ upside having already been captured for the index, particularly since the April 2025 tariff lows, in my opinion.
USD/JPY:
Price: 163.51
Weekly:
Beginning with the weekly for USDJPY, we can see that price had been consolidating right around the 2024 highs acting as resistance for several weeks at 162, but last week saw a breakout and close above that level into 164. The pair is now at multi-year highs and with no real technical resistance overhead, with 166.86 as the next fib level to pay attention to should 164 be flipped into support. Weekly momentum and structure is still very much bullish, so no reason to be betting on a swift reversion here outside of possible intervention - and we do have three big days into the monthly close with FOMC and the BoJ rate decision and press conference…
Daily:
Dropping now into the daily timeframe, we can see that daily structure is bullish, as is momentum, but we do potentially have some divergence forming here. (Although, to be fair, I give this a lot less weight here because we already had some mild divergence into early July that was invalidated.) Price is above all key MAs and VWAPs with no real levels of interest to the upside other than where we are consolidating now at 164, which is the 1.618 fib extension of the Q1 range. Above this level, clear skies for another 300 or so pips of upside, but, as mentioned above, we have a lot of major headline risk into the July close that can change this picture drastically.
Should we see July close with price back below 162, that suddenly looks quite a bit less bullish on the near-term outlook, where we could potentially see a red August for the pair and a retest of the 90d rVWAP into 160, where we have a huge amount of prior resistance turned support. Conversely, a July close above 164 is just asking for another major leg higher towards September. Much to play for here and I am sure we will see a lot of volatility over the next 5 sessions…
EUR/USD:
Price: $1.1403
Weekly:
If we begin by looking at EURUSD on the weekly timeframe, we can see that price continues to consolidate right on that support and the anchored VWAP from the 2025 lows at $1.138, flipping local support into resistance at $1.147 but failing to break meaningfully lower as of yet. Momentum and structure are bearish here and this is potentially where we get the next leg lower into $1.124-$1.128, which is the final major resistance turned support range on the chart before a much bigger downside move towards $1.10 becomes likely. In my view, if we chop around a bit longer around here, then see a wick or deviation of this VWAP into $1.128 followed by an immediate reclaim of $1.138, that would begin to look like a buyable bottom for a long back into $1.157, which has a lot of confluence for resistance. Until I see something like that I am not interested in longs, and the R/R is not great right here for shorts given the support right below us…
Daily:
Turning to the daily, we can see that price has been chopping around on this anchored VWAP since late June and has since broken above the 30d rVWAP, pushing into prior support at $1.147 and then failed, turning that area into resistance, since retracing that whole move back below the 30d rVWAP into $1.138. We are currently failing to break lower, but if we do lose last week’s low and turn $1.138 into resistance, I would like to see a faster drop into the support zone below and some momentum exhaustion appear, followed by that reclaim mentioned above, as I think that would make a really strong case for sellers running out of steam into this important area.
On the short side, to be honest I would only really be interested if we actually lose $1.124, where I think we have over 200 pips of downside with no technical support into the next major level. Again, with so much central bank headline risk ahead, I am sure this picture will change into early August and we will have some clearer structure to work with.
JP225:
Price: 65,164
Weekly:
Looking firstly at the index on the weekly timeframe, we can see that JP225 rallied into a fresh high at 73,764 a few weeks ago, then rejected hard and has been correcting since, with price retesting the anchored VWAP from the March lows and then closing marginally below last week, finding support above 62,500. Weekly structure and momentum is still bullish here and price is well above long-term trendline support, so I don’t really see any need to be turning bearish on the higher timeframes; rather, I think there could be a good long opportunity coming up here. If this is a deviation below the anchored VWAP, we should reclaim some support on the lower timeframes soon and have a clean invalidation on a first attempt at a long back towards the highs. Should this area fail, however, I would love an opportunity to long closer to 60,300 as prior resistance and the 365d RVWAP below, along with that trendline support.
Daily:
Dropping into the daily for a bit more clarity, it is quite unbelievable how orderly the correction has been off the highs: small sell-off → smaller rally, all the way down, flipping local support into resistance and then holding below the anchored VWAP from the all-time high on each rally, with price zig-zagging lower into the support zone we are now in, right at prior resistance. There is no real momentum exhaustion here, but we do have the anchored VWAP and then the 90d RVWAP just above, and if from here the index is resilient and can flip daily structure bullish with a break and close above the cluster of MAs into 68,500, I think we have a very strong case for a major low being in and price continuing higher to new all-time highs and beyond, where would then have to look at the structure to find a tighter invalidation than 64k.
Alternatively, if the 90d rVWAP holds here as resistance and we lose 64,000, I would be looking to ladder bids from 60,300 all the way down into 58,000 with invalidation on that position on acceptance below the anchored VWAP from the April 2025 tariff low, currently at 54,400. This would be a longer-term position looking to ride the trend to 80k+. Let’s see if either setup presents itself into next week.
Silver:
Price: $59.33
Weekly:
Looking at Silver on the weekly timeframe, we can see that price continued to grind lower following the loss of the 365d rVWAP, making marginal fresh lows each week but holding support at $55ish over the past few weeks. As mentioned a couple of weeks ago, I think the time to be bearish Silver is over and you should either be neutral or turning bullish on a longer-term timeframe, though we still have no reason to be long as of yet. If we do break lower, I think buying below $55 towards $50 is extremely good R/R on a position you are willing to hold into next year. If you are looking for a more heavily-levered long position, I don’t think we’re there yet.
Daily:
Finally, dropping into the daily, we can see that price did show some momentum exhaustion into the most recent test of this anchored VWAP and $55 support and is now bouncing, closing marginally back above the 30d rVWAP, which is a good early sign of strength. That said, we are pressing right up against support turned resistance her at $61, and so far in this downtrend we have failed to reclaim any of these lost support levels, and daily structure is still bearish. If, however, we do reclaim $61 as support here, that would be a small shift in fortunes for Silver bulls, particularly if daily RSI can break back above 50, where I think we are then very likely to squeeze much higher, towards the confluence of VWAPs, MAs and trendline resistance between $67-$71. Rejection up there on the first attempt is likely, but I think we are now at the point where a higher timeframe higher-low into Q4 from that zone but above $55 is more probable than not - and that is assuming we do break out here.
On the longer-term outlook, I think buying $50 if you get it is good value for the coming years - and I think only when we flip $71 back into support are we truly in a ‘we’re so back long every dip’ environment where you can be more confident in continuation towards new highs and price discovery. Until then, the neatest trade here on the lower timeframes is long a pullback into $60ish from acceptance above, looking for $68-$71 with acceptance back below $56 as invalidation.
I hope you’ve found some value in the read this week - please RT, share, engage etc. if so!