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Markets are in Pause Mode, Waiting the Fed’s Decision
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Markets are in Pause Mode, Waiting the Fed’s DecisionInvestors pressed the sell button yesterday, preferring to take profits on recent gains. The major stock indices closed in negative territory after presenting a choppy session. After Friday’s interesting day, economic data was brushed aside due to its low priority status, allowing investors to focus on recent earning reports.
McDonald’s bounced higher throughout the session after reporting an additional increase in sales. The stock closed up by over 1%, but failed to have any major impact on the indices. The S&P 500 finished mildly lower, shredding 0.33%, while the Nasdaq closed with a loss of 0.56%.
Two things have been troubling investors over the last few weeks, preventing them from driving the markets higher: From a technical point of view the major indices are now trading around psychological resistance levels, ones that have crushed recent momentum. In addition, since June the indices have presented a phenomenal rally, failing to present any major pull back. This situation is preventing additional money from joining the rally as participants are now waiting for a deeper pull back, hoping to receive more comfortable entry points.
As stated on the video briefing a reasonable pullback would be classed as one that drops to any of the Fibonacci levels:
The Pound Tumbles after finding intraday supportMovement on the Forex market was capped yesterday, as the Dollar index finished the session around the 79 mark. Even though the Dollar strengthened slightly throughout the session, most of the pairs lingered around recent levels.
The major mover of the day was the Pound’s crosses, as Forex traders preferred to exit at current levels, heading back into the Dollar. Even though the GBP/USD found support on critical levels throughout the session, the negative open in the U.S added to the selling pressure, sending this pair down to touch trend line support. The GBP/JPY also presented an interesting session, reversing after touching major resistance.
To date, this pair is beginning to present a possible double top scenario, something that could lead to further devaluation of the Pound. One must take into consideration that this pair is now trading on trend line support - a break of which could indicate a change of trend.
Furthermore the Bank of England is expected to release its inflation report later this week. A negative number could show that U.K economy isn’t holding up despite the BOE’S 175B pound plan to stimulate their economy. Some now fear a deflationary scenario, one that could have a tremendous impact on the strength of the currency.
Market Data to Watch Out For
The economic calendar is packed with data today, starting with closely watched figures from Germany. The Euro zone’s largest economy is expected to release its inflation figures, showing whether the economy is holding up. In addition, the Euro zone is scheduled to release its European Harm. Index of consumer prices, currently expected to show a 0.0% change.
During the session the U.S will release its Wholesale trade and inventories, both of which could have a slight impact on the intraday session. One must note that the Fed will be releasing its rate decision tomorrow therefore most investors will be preparing for tomorrow’s hectic day.
To view the full economic calendar click here.
New Features: Please note that our education center has been updated with new courses and tutorials on the Forex and Stock Market. Feel free to view our School and increase your trading knowledge
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