Fundamental
Overview
The FOMC decision didn’t
provide anything new. In fact, the Fed delivered on expectations with no
surprises whatsoever. The central bank kept rates steady, reduced the QT pace, revised
growth lower and inflation higher, and kept the dot plot mostly unchanged.
Fed Chair Powell
acknowledged the current uncertainty around Trump’s policies and the inflation
outlook but confirmed that the economy remains healthy, and the Fed is in a
good position to wait for more clarity.
The only noteworthy comment
was the dismissal of the rise in the long-term inflation expectations in the
University of Michigan Consumer Sentiment survey as he labelled it as an
outlier given that other metrics show long term expectations stable or even slightly
lower.
Today, we get the US
Jobless Claims figures which continue to show a stable labour market but it’s
worth to keep an eye on them for early signs of weakness. The next key event is
scheduled for Monday when we get the US Flash PMIs which coupled with the UMich
inflation expectations triggered the growth scare last month.
S&P 500
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that the S&P 500 broke above the key 5720 level recently as the bounce
continues to gather momentum. The buyers will likely have more conviction to
step in with a defined risk below the key level, while the sellers will want to
see the price falling back below the key level to pile in for new lows.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the price broke above the downward trendline that was defining the bearish
momentum. We now have an upward trendline defining the bullish momentum. If we
get a pullback into the trendline, we can expect the buyers to lean on it with
a defined risk below the trendline to position for a rally into new highs. The sellers,
on the other hand, will look for a break lower to gain even more conviction and
pile in for new lows.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here as the buyers will look for a bounce around the
trendline, while the sellers will look for a break lower. On an intraday basis,
if the momentum holds, a break above yesterday’s high might see more buyers piling
in. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we get the latest US Jobless Claims
figures.
This article was written by Giuseppe Dellamotta at www.forexlive.com.