Trading Insights: Dowjones 30 hits fresh 52-week highs!

The above chart illustrates the Dowjones 30 current price breaking above its 52 week highs.

Market Commentary

It's earnings season, and it's also mid-summer in the northern hemisphere, with many traders away from their trading desks, leaving those remaining in the markets exposed to recent softness across the technology sector stocks.
Last 5 days key US stock indices percentage performance

• US100 -0.27%
• SP500 +1%
• Dowjones 30 + 2.35%

While the tech-heavy US100 index has been underperforming over the last 5 days, the more broad-based indices such as the Dowjones 30 and SPX500 indices have been trading higher.

One reason to speculate on the above divergence in the main US stock indices is that traders and investors seem to be shifting out of the very interest rate sensitive US technology sector eg US100 index on bets that the Fed will not only increase the rate on Wednesday next week but also signal that there is still upside risk for higher inflation.

Bottom line: the recent US stock market moves could be a rotation out of the high-flying tech sector exposed US 100 index and into the more board based economy exposed Dowjones 30 and SP500 indices.

US traders waiting for the main event… on deck next week

Wednesday July 26th: US Fed interest rate decision due and speculation that the US Fed might be a bit more hawkish e.g. increased concerns that inflation could take longer to fall towards the Fed’s 2% target. The Fed is expected to hike the rate by 0.25% which would lift the Fed funds rate to 5.5%, hence the recent downside pressure on the US100.

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Today’s economic calendar

UK Retail Sales were better than expected but UK consumer confidence fell in July

GBP/USD lost 105 pips or 0.68% in the last 5 days; current price 1.2868 with closest price support seen near 1.2850.
Source: TradingView / J. Knobel July 21 2023 7:12 AM UTC

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Today’s Price Action Spotlight:

GBP/USD down last 5 days, however, the multi-month uptrend remains intact

GBP/USD five days of losses seen on the GBP/USD

GBP/USD

Despite the recent 5 days of losses, the GBP/USD current price remains near its 52 week highs.

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