Markets Mixed Ahead of FOMC Tomorrow
We’ve seen a quiet start to the week for benchmark global equities indices. With the July FOMC meeting looming tomorrow, volatility has been subdued so far. Expectations of further hiking from the Fed is creating an obvious headwind to higher prices, in US stocks in particular. However, with a .75% hike priced in, failure to deliver a larger hike, or hawkish enough forward guidance, might see some USD correction short-term, driving equities prices higher.
In the US, traders are gearing up for a big week of earnings which is also weighing on sentiment here. Fears that recent USD strength will impact tech stocks in particular is creating some jitters among investors, especially following Microsoft’s revenue downgrade earlier this month, putting their earnings call in sharp focus today.
The FTSE has bucked the trend somewhat over the European morning on Tuesday. UK stocks are rising today, supported by a weaker GBP. DAX is falling on concerns over geo-political tensions as EU leaders are due to meet today to agree a further scaling back of Russian gas use. This comes on the back of Gazprom reporting a 20% drop in Nord Stream Flows to the EU due to technical issues. The news has once again raised concerns over a potential total shutdown in gas supplies, weighing on investor appetite.
Technical Views
DAX
Following the latest breakout above the bear-channel, the DAX has failed to follow through with initial bullish momentum waning. The index is still sitting above the 13067.45 level and, with both MACD and RSI bullish, while above here the focus is on a further push higher towards the 13672.31 level next.
S&P 500
The rally in the S&P has seen the market recovering firmly off the recent 3613.50 lows with price trading back up above the 3910 level. Price has been moving higher within a corrective bull channel and, while above the 3910 level, and with both MACD and RSI bullish, the focus is on a continuation higher. However, this move is still seen as corrective and 4153.50 might prove to be a turning point if tested.
FTSE
The FTSE look like it is attempting to break higher here. Following the latest rally off the 69990.4 lows, price is now once again testing the 7362.6 level. With both MACD and RSI bullish here, the focus is on a break higher towards the 7558.7 level next. To the downside, 7213.9 is the key support to note.
Nikkei
The rally off the 26246 level has seen the Nikkei breaking back above the falling wedge top and above the 27422.9 level. While above here, and with both MACD and RSI bullish, the focus is on a further push higher towards the 28356.6 level 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.