We have seen global indices reach new all-time highs and investor sentiment peak, but it seems the global economy is taking a step back to re-evaluate the situation.
Markets peaked as economic data, positive U.S company earnings and a better-than-expected U.S payrolls report pushed sentiment higher, but inflation worries are back. China’s recent producer price index (PPI) data showed China’s factory-gate prices rose at the fastest pace in 26 years.
The Chinese rising inflation worries coupled with increased Oil prices globally could possibly see the U.S Federal Reserve re-evaluate its interest rate outlook if we see a beat on U.S CPI data later today.
Here is what’s expected this week:
The Wall Street 30 Technical Analysis
Our possible long-term target price on the Wall Street 30 (WS30) Index has been reached at 36030 (green circle) over the last week, as discussed in our recent WS30 note. We will start afresh with new levels and an outlook on the Wall Street 30 Index for the rest of the year.
Current State / Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
All eyes will be on the U.S Consumer Price Index (CPI) data today at 15:30 SAST to see if inflation rose more than expected over the last month, which could change the Fed’s rate outlook. We do expect increase levels of volatility today, before and after the announcement.
New levels of interest to take note of on the WS30 Index are the 35025-support which was the base breakout level on the 4H chart which could be tested. The price action is currently trending upward in a channel that will be watched closely for a break lower. An upper possible target level could be the previous high and current resistance at 36578.
- The 50-day SMA (blue line) is still pointing higher and acting as support to the price action at the lower end of the price channel on the 4H chart.
- The Relative Strength Index (RSI) is at the midpoint and waiting on the direction which could come today after the CPI data is released.
Outlook / Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
Trading Term of the day:
A price channel appears on a chart when a security's price becomes bounded between two parallel lines. Depending on the direction of the trend, the channel may be termed horizontal, ascending, or descending. Price channels are often used by traders, who practice the art of technical analysis, to gauge the momentum and direction of a security's price action and to identify trading channels. – Investopedia.
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 10th of November 2021) U.S Market open.
Sources – MetaTrader5, Reuters, Investing.com, Investopedia.
Barry Dumas | Market Analyst at GT247.com
Barry has 12 years of 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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