Global equities benchmarks are seeing a more positive open on Tuesday. With the recent rally in USD pausing for now, equities traders are bidding up the indices tracked here with gains across the board today. US markets were out yesterday for the bank holiday so volume is expected to be at a better level today which should help US stocks capitalise on current USD weakness. On the data front, there is little of note today which means the current themes of a softer US Dollar and higher equities prices should continue undisturbed.
The big focus this week, however, will be on Fed chairman Powell’s semi-annual testimony at the Senate tomorrow. On the back of the firmly hawkish June FOMC meeting last week, expectations are for the Fed chairman to double down on the Fed’s hawkish view. With further, larger rate increases forecast over the remainder of the year, and with the Fed now projecting rates to end the year higher than previously projected, tomorrow’s comments might well spur a fresh spate of demand for USD, dragging equities prices down. Traders will also be particularly keen to hear how Powell judges the risks to the economy over the remainder of the year, with these comments also likely to fuel volatility in equities prices.
Technical Views
DAX
The sell off from the rejection near 14791.27 has seen the market trading down to 13067.45. While this level is holding as support for now, with both MACD and RSI bearish, risks of further downside are elevated unless bulls can get back above the 13672.31 level near-term.
S&P 500
The decline in the S&P has seen the market breaking down below the bear channel low. For now, price is holding onto support at the 3613.50 level. With both MACD and RSI bearish, however, further losses below the level are expected unless bulls can get back above the 3910 level near-term.
FTSE
The sell-off in the FTSE has seen the market moving down to the 6990 level from highs above 7558.7. While the support Is holding for now, bulls need to see price get back above the 7362.6 level and broken bull channel. To the downside, if price break current lows, 6822.4 is the next level to note.
NIKKEI
The sell-off in the Nikkei from the 28356.6 level has seen the market falling to the 25595.3 level. Price has since rebounded above the 26246 level. While above here the focus is on a move up to the 27422.9 level next. To the downside, a break of the 25595.3 level will put the focus on 24619.3 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.