Global equity markets turn lower on Wednesday while U.S Treasury yields rise as market participants bet on big interest rate moves from the U.S. Federal Reserve (Fed).
U.S Treasury yields hit multi-year highs on Wednesday after overnight statements from Fed governor Lael Brainard saw equity markets turn lower.
The governor indicated the possibility of a larger than expected rate hike coupled with a rapid shrinking of its balance sheet to curb inflation. Investors will now turn to the FOMC Meeting Minutes for guidance and clues as to which direction monetary policy will be heading into. The FOMC Meeting from the Fed’s last policy meeting will be released later today around 20:00 SAST.
Here is what’s expected this week:
The Wall Street 30 Technical Analysis
The price action on the Wall Street 30 (WS30) index could not sustain its rally and reach the 35635-resistance and possible target higher as discussed in our previous WS30 note. With the current fundamental picture on the U.S economy possibly steering towards recession, not considering the Fed’s actions, we could see lower prices on all the major U.S Indices.
- We have noticed a Head and Shoulders reversal pattern on the 4H chart which supports a short term move lower in price. The WS30 could possibly target the 34110-support level if U.S Fed minutes are received negatively by investors.
- We could see a bounce from the 34110-support level back to the 34568-resistance but if the bears take control, then we could see lower levels on the horizon.
- The 50-day simple moving average of price is currently above price and supporting lower prices along with a decline in volume which will be watched closely.
Current State / Chart Source: Wall Street 4H Timeframe - GT247 MT5 Trading Platform
Take note: The outlook and levels might change as this outlook is released during the current days (Wednesday the 6th of April 2022) U.S Market open.
Sources – MetaTrader5, Reuters, Huw Jones, Investing.com
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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