Dow Turns Lower
The sell-off in the Dow has seen the market breaking below the rising trend line from last year’s lows as well as the last swing low support in the uptrend at 33576.05. With both the MACD and RSI having turned bearish here, the focus is on further downside while price holds below this level with shorts targeting a move down to the 32044.29 level next.
The unwinding of USD short positions amidst the uptick in Fed tightening expectations means that equities markets are now likely to be vulnerable to further downside volatility on any better US data or hawkish comments from Fed policymakers.
Key Data to Watch
A raft of US data from Wednesday onwards (manufacturing PMI, GDP, durable goods etc) will be the key focus. Any upside surprises here should see the USD rally continue, pulling equities lower. Any weakness, however, should have the opposite effect. Traders will also be paying attention to Fed chairman Powell who speaks on Tuesday, looking for any further clues as to when the Fe dis likely to begin scaling out of its easing operations.
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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.