Equities Mostly Higher This Week Ahead of Key Data Events
We’ve seen a mixed start for global equities benchmarks on Tuesday. US stocks are under pressure amidst a better showing in USD while, elsewhere, European and Asian markets are trading with a better tone. The NIKKEI is having another solid week following a strong rally on Monday with the index on course to print its fourth consecutive bullish week. The ongoing weakness in JPY is helping keeping the Nikkei supported while, a generally better tone to risk assets on the back of China reopening from lockdown is also helping lift prices.
Looking ahead this week, there is plenty to keep an eye on for equities traders. The ECB meeting on Thursday will be closely watched by European traders as they look for a clear signal that the bank will hike rates in July. Any additional hawkishness will no doubt weigh on the DAX near-term. On Friday, US CPI will be the headline event with the potential for plenty of USD and equities volatility on any surprises. If the data is seen coming in above expectations, this will dilute the recent conversation around a potential post-July Fed rates pause, sending USD higher and equities lower. Alternatively, if the data undershoots expectations, this will add further conviction to the post-July pause perspective, weighing on USD and allowing equities to rebound higher.
Technical Views
DAX
The recent breakout in the DAX has seen the market extending above the bear channel top and above the 14170.79 level. With both MACD and RSI bullish, while above here, the focus is on a test of the 14791.27 level next. To the downside, a break of 14170.79 would put focus back on 13672.31 next.
S&P 500
Following the upside break of the recent bearish channel price is now holding in a block of consolidation between the 4062.25 and 4153.50 levels. With both MACD and RSI bullish, the focus is on an eventual break higher with 4305 the next upside level for bulls to note.
FTSE
The rally off the 7241 level in the FTSE has seen the market trading back up to break above the 7558.7 level. Price is currently sitting atop the level as support and, while above here and with both MACD and RSI bullish, the focus is on a move higher through 7291.6 next.
NIKKEI The rally in the NIKKEI this week has seen price breaking out above the large falling wedge pattern which has framed price action over the last year. With both MACD and RSI bullish, while above here the focus is on a break of the 28356.6 level next. To the downside, 27422.9 remains key support
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.