The economic calendar is filled to the brim on Wednesday with economic announcements and earnings releases as the market rethinks the efficient market hypothesis.
FOMC Interest rate decision
Markets are expected to be muted today ahead of the FOMC rate decision and according to the CME Fed watch tool, the Fed is widely expected to keep the target rate as is between 0-25 basis points.
Market participants will look closely to Fed chair Powell’s remarks at the press conference scheduled approximately 30 min after the rate decision which is set at 21:00 SAST.
The value of companies becomes relevant this U.S earnings season as the efficient market hypothesis gets pushed to the foreground after GameStop went from penny stock to large cap all in one day. The U.S earnings season will reach a climax today as some of the major tech companies like Apple, AT&T, Tesla, and Facebook report earnings after the U.S market close.
The Wall Street 30 Technical Analysis
The 30774-resistance level on the Wall Street 30 (WS30) is still holding firm as the price action consolidates sideways on the 4H chart. We might expect a breakout in either direction which could be triggered by the FOMC statement and or earnings released after the closing bell.
We are still looking at the same support and resistance levels of interest which could act as target points in either direction when price breaks out of the consolidation.
- The price action on the WS30 is consolidating sideways on the 4H chart between our levels of interest which could indicate a breakout is coming. The current uptrend is also still intact on the 4H chart which will be watched closely for a change in direction.
- The 50-day SMA (blue line) is above the price action and is acting as resistance to price in the short term on the 4H chart but still well below price on the Daily chart.
- The Relative Strength Index (RSI) is below the midpoint mark and is pointing lower.
Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
The outlook and levels might change as this outlook is released during the current days (Wednesday the 27th of January 2021) U.S Market open.
Sources – MetaTrader5, Reuters
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years experience in the financial markets. He enjoys educating clients on trading / investing and providing punchy technical analysis on securities. He currently holds a Wealth Management qualification and is studying towards becoming a Chartered Market Technician® (CMT) designation holder.
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