Asian markets came off a four-month high as U.S economic data disappoints on Tuesday and renewed fears of a U.S economic slowdown and recession becomes a reality.
The positive market sentiment on Tuesday from easing Covid quarantine restrictions in China saw Asian shares in an upward trajectory then evaporating during the U.S session. The move lower was triggered as U.S consumer data showed consumer confidence was at a 16-month low point in June. The consumer data point was due to higher inflation fears that could spark a significant economic slowdown in the second half of the year which could bring the possibility of a recession closer.
Renewed recession fears saw investors rush to safe havens like the U.S Dollar (USD) as U.S Treasury yields moved lower and commodities like Oil could become a focal point once again. Global oil supply is front and centre again as Saudi Arabia and the United Arab Emirates are unable to raise output significantly in the near future.
The Wall Street 30 Technical Analysis
Fundamental pressures remain on all the major U.S Indices and support levels will be watched closely over the coming days. We saw the price action rally from our 30630-resistance, now support level, to close the 31383-price gap on the Wall Street 30 (WS30) Index.
The price action soon came under pressure again this week which brings the 30630-support (breakout point) back into focus. If bulls take control again, we might see the breakout be retested and could see another move higher which is also supported by the 50-day SMA (blueline). If this support level does not hold, then we could see a significant drop back the 29751 level.
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 29th of June 2022) U.S Market open.
Sources – MetaTrader5, Reuters, Sam Byford, Bloomberg.
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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