The hangover of the last monetary policy meeting of the Federal Reserve that was held yesterday, is already being felt in the markets of Asia and Europe. The bears dominate the scene and continue the trend seen in yesterday’s session on Wall Street, where the benchmark indexes ended up losing more than 3% after the president of the US central entity warned that “the economic outlook is uncertain”, and that they are attentive to “both sides of the mandate”due to the possible rebound in inflation in 2025.
Spreaker
The bearish dynamics that the market has seen in recent hours forces us to review the support levels that can stop the bearish advance in the European markets. Above all, after selective ones like the Ibex 35 pierced supports like those it presented at 11,700/725 points.
“The possibility that the falls continue to deepen and is aimed at seeking support for the bullish trend that has been guiding the rises since October 2022, which currently runs through the area of 11,150/11,300 pointsare getting bigger,” warns Joan Cabrero, technical analyst and strategist of ecotrader who details that it is a level analogous to the support of the 39,300 of the Ibex with Dividends.
The European stock market, for its part, has been developing a consolidation over the last eight months, very similar in terms of proportions to what we saw in 2023. Now, at current levels “we must be completely calm and not think about reduce exposure to the stock market,” reassures Cabrero, who urges linking the bullish strategy in the Old Continent to the maintenance of “key supports.”
It is about monitoring the level that the EuroStoxx 50 presents in its traditional version in the 4,688 pointswhich are the November minimums.
Wall Street Earrings
On Wall Street, the main protagonist after the reflation alert in the US that Jerome Powell made yesterday before the return of Donald Trump to the presidency, highlights the evolution of the Dow Jones Industrial which yesterday reached the bullish trend that has been guiding the rises since August.
“If this guideline falls, the least expected is that the Dow Jones Industrial will go to fill the trump gap which opened from 42,000 points and, analytically, would pose a context of short-term falls on the other side of the Atlantic”.
He trump gap, It is the area in which the benchmark indexes on Wall Street were trading just before the electoral victory of the new US president and that “will most likely stop future consolidation,” says Cabrero. It is about the 20,000/20,300 of the Nasdaq 100 or the 5,700/5,850 of the S&P 500 which, by the way, would coincide with the average of the last 200 sessions in both indices.
The dollar threatens to return to parity
The announcement by the Fed yesterday that it only expects two rate cuts of 25 basis points next year and the forecast of an aggressive increase in inflation by 2025, from 2.1% to 2.5% , has also been reflected in the evolution of the dollar, which appreciated more than 1% yesterday against a weighted basket of the most traded currencies on the planet. The Dollar Index, in fact, is already trading at its highest levels of the year and thus registers its most bullish quarter since 2015 with two weeks left until the end of the year.
This movement puts more pressure on the euro/dollar, which is trading close to the support of the 1.035-1.04 dollars per eurowhich is the basis of the channel that has been limiting the consolidation in recent months. “What happens at this level is key to obtaining clues that will point either towards a context of increases for 2025 or a potentially bearish context in search of the minimums of 2022 around 0.95 dollars per euro“Warns Cabrero.
LinkedinBeloud
#supports #stop #bearish #advance #Ibex #Feds #decision
