a sort of tense calm prevails in the last hours in the markets waiting to know US inflation datawhich mark the economic agenda for Wednesday and will be key to obtaining clues that indicate which path the Federal Reserve will take in terms of monetary policy.
The publication of the price indicator in the North American country comes at a crucial moment for global markets, after the US employment data published this Friday, which reduced expectations of a cut in interest rates by the Fed.
“A high CPI will translate into a higher dollar and higher rates, which means a general tightening of financial conditions for Asia“says Kok Hoong Wong of Maybank Securities in statements to Bloomberg.
The consolidation of US stock markets in recent weeks suggests the possibility of witnessing a more corrective than consolidative process in the European marketwhich despite the ups and downs remains above the first supports it faces.
The support is located in the 4,800 points of the EuroStoxx 50 and the Spanish Ibex 35, is in the 11,300 points. “The loss of these references could mark the beginning of a fall that, as I have been pointing out for a few weeks, could cause a replica of the earthquake seen last August.
If that happens, the S&P 500 would head to search for the zone of the 5,500 points, which would also coincide with your average of 200 sessions“, highlights Joan Cabrero, technical analyst and strategy director of ecotrader.
The upper part of the gap that the Wall Street stock markets opened after the election of Donald Trump as the new president of the United States, baptized as the Trump Gap, acts as a key barometer to determine whether an eventual decline or consolidation in the US market could lead to a broader corrective scenariosimilar to earthquake seen in July, whose climax was reached on August 5.
The ‘key barometer’ to gauge falls
“You have to watch if the bottom and last support of the 5,780 points is capable of curbing the selling pressure in the S&P 500, says Cabrero. “If it also loses that support it would be confirmed without any type of doubt a bearish reversal pattern head and shoulders that would open the door for us to witness a probable replica of the earthquake August,” he points out.
A hypothesis that would favor Wall Street entering the January sales period and opening the door to an opportunity for investors to buy the S&P 500 in the 5,500-5,630 points.
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