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Eyes on US GDP and Jobless Claims

The US stock market experienced a decline yesterday, with the Dow Jones closing 1% lower. The S&P500 and Nasdaq 100 also saw losses of around 0.70% as a result of profit-taking and de-risking ahead of key economic releases.

Indicator Forecast Prior
GDP Annualized QoQ 1.3% 1.6%
Core PCE Price Index QoQ 3.7% 3.7%
Initial Jobless Claims 217K 215K
Pending Home Sales -1.0% 3.4%

During the US session today, another round of important economic figures will be released. One of the most crucial dataset will be released tomorrow. Investors are eagerly awaiting the release of the most trusted inflation gauge by the Federal Reserve, which is the Month-over-Month (MoM) and Year-over-Year (YoY) Core PCE Price Index.

US 10 year at major resistance

The US 10-year yield rose significantly during yesterday’s trading, reaching as high as 4.63%, which is a key resistance level we are closely monitoring in the coming days.

Based on the time/price method, this appears to be a short-term upward retracement before the downward pressure resumes. If the price/time method is accurate, as it has been in the past, another disappointing GDP and Core PCE Data could act as the catalyst for renewed downward pressure.

DXY testing 105.0 once again

The US Dollar Index rose again during yesterday’s trading, reaching as high as the key resistance area of 105.0. This level should be closely monitored, as a weekly close above 105.0 would likely lead to further upward retracement over the next few days. However, economic releases that may maintain downward pressure could impact this upward momentum.

Technical indicators are still not bullish enough to support another leg higher, while the RSI indicator hovers around the 50 key level. On the downside, the next support area remains at 104.70, followed by 104.40.

EURUSD bullish flag

The Euro briefly declined below 1.08 during the Asian session today but managed to bounce back just before the opening of the European session. Meanwhile, Spanish inflation data showed the stickiness of inflation, and the Euro bounced back above 1.0815 before this report was released.

In the meantime, there is a bullish flag on the daily Euro chart, which remains valid as long as the pair continues to trade above 1.0780. A break above 1.0860 is needed to confirm an upside view.

A break of this bullish flag would pave the way for further gains towards 1.09, followed by 1.0930.

 

 

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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