In this blog post, we will delve into the trading signals generated by Acuity Trading in the month of July 2024. In July 2024, FX markets were influenced by central bank policies, economic data releases, geopolitical events, and commodity prices, with significant impacts from interest rate decisions by the Federal Reserve and the Bank of England, as well as global economic conditions like China's slowdown. Stock market indices were driven by strong performances in large-cap tech and AI companies, despite some volatility from geopolitical events, while commodities like oil and gold saw price increases due to geopolitical tensions, supply constraints, and safe-haven demand amidst economic uncertainty.
Asset Class Summary
Forex
In July 2024, the FX markets were primarily driven by central bank policies, key economic data releases, geopolitical events, and commodity prices. Central banks' interest rate decisions, especially from the Federal Reserve and the Bank of England, significantly impacted currency values. Economic indicators like the US Nonfarm Payrolls and various inflation measures influenced investor expectations and currency movements. Political developments, such as the UK General Election, affected the British Pound, while fluctuations in commodity prices, particularly oil and gold, influenced commodity-linked currencies like the AUD. Global economic conditions, including the economic slowdown in China, also played a crucial role in shaping FX market dynamics.
Indices
Major stock market indices were influenced by several key factors. Central to these were the concentrated performance of a few large-cap tech stocks, which drove significant gains in the US markets, continuing a trend seen in previous months. This concentration raised concerns about potential overvaluation risks but also highlighted opportunities for active stock selection. Additionally, robust earnings from companies involved in artificial intelligence contributed significantly to market performance, particularly in the US and Asian markets. In contrast, geopolitical events, such as the announcement of a snap election in France, introduced volatility in European markets.
Cryptocurrencies
The major driving forces in the cryptocurrency market included regulatory developments, particularly the ongoing SEC vs. Ripple lawsuit, and global regulatory actions impacting market sentiment. Macroeconomic trends, such as inflation rates and central bank policies, along with the performance of traditional financial markets, influenced investor behaviour. Technological advancements in Ethereum and Bitcoin, like Ethereum 2.0 upgrades, played a crucial role, while institutional involvement through ETFs and corporate adoption boosted market confidence.
July proved to be a challenging month for our trade ideas, as we saw 284 trades being executed with a win rate of 48.24%. Unfortunately, this resulted in a negative return of 7.69% for the month, accompanied by a maximum drawdown of 13.23%. This marks the first instance of consecutive monthly declines since June and July of 2023.
The simulated performance statistics provided are based on the assumption of risking 1% of trading capital per trade. It is crucial to understand that past performance, whether actual or simulated, is not indicative of future results.
12 month simulated performance statistics
| August 23 | September 23 | October 23 | November 23 | December 23 | January 24 | February 24 | March 24 | April 24 | May 24 | June 24 | July 24 |
| 8.18% | -3.50% | 2.03% | 6.84% | 11.92% | 29.20% | 40.86% | 5.88% | 10.92% | 15.15% | -2.77% | -7.69% |
Commodities emerged as the standout performers for the month, boasting an impressive rise of 8.71% with a minimal drawdown of -2.60%. Following closely behind were the FX Majors, demonstrating a robust increase of 4.06% with a drawdown of -4.14%. On the flip side, we witnessed losses in other asset classes, with FX Crosses experiencing a slight decline of 0.36%, Cryptocurrencies down by 6.75%, and Indices facing a challenging month with a notable decrease of 13.96%.
| Asset Class | Trades | Win Rate | Returns | Drawdown |
| FX Majors | 54 | 57.41% | 4.06% | -4.14% |
| FX Crosses | 61 | 49.18% | -0.36% | -3.01% |
| Commodities | 52 | 53.85% | 8.71% | -2.60% |
| Indices | 85 | 36.47% | -11.23% | -13.96% |
| Cryptocurrencies | 32 | 53.13% | -6.75% | -6.75% |
Challenging market conditions prevailed in indices during July, with the German DAX40 index ensnared in a tight trading range amidst heightened volatility. The presence of frequent gaps up and down added complexity to the already tough trading environment. Over in the US, the NASDAQ, the prominent tech benchmark, seemed to lose momentum after a notable uptrend, hinting at the formation of a temporary peak. This shift brought about increased volatility and ever-changing dynamics, presenting traders with a myriad of complexities to navigate. The chart below provides a visual representation of these demanding market conditions, highlighting the hurdles faced by market participants.
GBPJPY stood out as the star performer in July 2024, despite only 3 trades being triggered. With a flawless win rate of 100% and an impressive average return per trade of 2.39%, our analysts expertly navigated the strong upward trend and subsequent trend reversal. Meanwhile, USDCAD continued its robust upward trajectory, aligning with 9 successful long signals in July that resulted in a 5.27% return for the month. Additionally, our gold signals delivered solid returns, boasting a 75% win rate from 8 trades and an average return of 0.54% per signal.
| Best | Trades | Long | Short | Win Rate | Returns | Drawdown |
| GBPJPY | 3 | 1 | 2 | 100% | 7.16% | -0.00% |
| USDCAD | 9 | 9 | 0 | 55.56% | 5.27% | -2.01% |
| GOLD | 8 | 6 | 2 | 75.00% | 4.32% | -1.01% |
Our struggles in the Indices market are clearly reflected in the results below. The DAX index posed a significant challenge with only one successful trade out of eleven. Historically, this market has been a strong performer for us, and we are optimistic about a potential return to form in August. Additionally, the HS50 index delivered negative returns, as the volatile price movements during the corrective phase presented obstacles in market analysis. Furthermore, the uncertainty surrounding the trend of cryptocurrencies had a negative impact on our Ethereum trades.
| Worst | Trades | Long | Short | Win Rate | Returns | Drawdown |
| DAX | 11 | 9 | 2 | 9.09% | -8.11% | -8.11% |
| ETHEREUM | 9 | 9 | 0 | 33.33% | -3.81% | -4.05% |
| HS50 | 9 | 5 | 4 | 33.33% | -2.39% | -2.78% |
Throughout the month of June, we witnessed GBPJPY exhibiting a strong upward trend, with price movements respecting the established uptrend support line. However, a significant shift occurred in mid-July, leading to a notable trend reversal. The application of classic technical analysis techniques proved to be highly effective in navigating these market dynamics. On the contrary, DAX40 traded in a sideways manner, resulting in volatile and choppy price action. The absence of clear trends or patterns made the utilization of traditional techniques challenging and inconclusive.
Here is a snapshot of how our trade ideas performed on the day of key macroeconomic data.
| Event | Date | Trades Triggered | Win Rate | Return |
| Non Farm Payrolls | 05/07/2024 | 11 | 54.55% | 7.18% |
The Non-Farm Payrolls data exceeded expectations, sparking an initial dip in the Dollar Index before swiftly stabilizing. This event saw lower volatility compared to previous instances, with a minor 0.27% movement in the Dollar Index within the first hour post-release. Gold outshone other assets, hitting our target and securing impressive returns of 2.5%.
| Event | Date | Trades Triggered | Win Rate | Return |
| US CPI (MoM) | 11/07/2024 | 22 | 50.00% |
-2.78% |
The release of CPI data below expectations sparked a swift downward movement in the US Dollar, catching many by surprise. While a 0.39% price shift was initially anticipated post-release, the actual movement soared to 0.75% within the first hour. Despite the subsequent recovery in prices, the heightened volatility led to a mixed bag of results. Noteworthy gains were seen in GBPJPY and USDCAD, both yielding returns of 2%. However, we encountered stop-outs on 10 positions, with the remaining signals ending in modest gains and losses, culminating in a -2.78% return for the day.
| Event | Date | Trades Triggered | Win Rate | Return |
| ECB Interest Rate Decision | 18/07/2024 | 17 | 35.29% | -2.38% |
The market was met with an anticipated decision on interest rates by the ECB, causing a sharp decline in the EURUSD pair. Volatility remained in line with our predictions, and the subsequent press conference saw an increase in selling pressure. While the European and US sessions did not yield any notable wins, we did see a positive turnaround in the Asia/Pacific session with gains of 2% on NZDUSD and 1.33% on ASX200, showcasing our ability to adapt to diverse market conditions.
Every day, our team of analysts meticulously identifies the best trading setups across various markets. Each analyst employs a unique approach, leveraging their expert knowledge and experience to generate high-quality market calls. Our standout trade for June was a buy position on GBPJPY executed on the 12th July 2024.
This trade setup seized a pivotal moment in the prevailing GBPJPY trend. With recent weeks showcasing notable weakness in JPY, propelling GBPJPY to record highs, the analyst astutely identified a classic trend break leading an imminent price reversal. This keen insight culminated in a highly profitable trade, emphasizing the significance of thorough market analysis and timely decision-making.
Here's a graphical depiction illustrating the trade setup and the analytical process behind the GBPJPY outlook formation.
GBPJPY reached our desired entry level at 11:13 (UK), with minimal drawdown of 8 pips at 11:33 (UK). The immediate move lower from the entry level was very welcome, and the price continued on its bearish path throughout the trading session.
At 14:08 (UK), there was a sharp downside move in GBPJPY with the pair losing 157 pips in 6 minutes. Rumours of intervention from the Bank of Japan helped provide strength to JPY, while GBP was impacted but concerns over the economic outlook for the UK. The bearish price action saw GBPJPY reach our 1st target at 204.25 at 14:14 (UK), at which point the trade was closed.
The price bottomed out on the day at 204.14, which was short of our 2nd target at 204.00. This was eventually reached on the 17th July without hitting the stop loss at 206.75.
Triggered at: 11:13 UK
Exit at: 14:14 UK
Duration: 3 Hours and 1 minutes
Outcome: 4R
In July 2024, trading outcomes highlighted some notable successes despite overall challenges. Commodities emerged as top performers, achieving an impressive 8.71% return with minimal drawdown. The FX Majors also showed strength with a solid 4.06% increase and a 57.41% win rate. GBPJPY and USDCAD were standout performers, with GBPJPY achieving a perfect win rate and a 7.16% return, while USDCAD posted a 5.27% gain. Gold trades also delivered strong results, with a 75% win rate and a 4.32% return. Despite a difficult month for indices and cryptocurrencies, these successes demonstrate the resilience and opportunities present in the trading strategies.
Thank you for your continued trust in Acuity Trading. Stay tuned for more updates and insights in the coming months.