Trading Insights: It’s Fed Day and the US economy is looking good!

Market Talk

The table below shows recent key US economic indicators:

Data as of June 14 2023 8:09 UTC source: TradingView / J. Knobel

Investors could feel that the above table suggests:

• A not too strong US Dollar
• Robust stock market
• Low unemployment
• Inflation remains above the Fed target but it’s moving in the right direction
• Interest rate normalization
• Positive GDP growth
• Wage growth is now well above inflation

Key US economic indicators look very well balanced, and with many other global central banks taking action to get price stability under control, it could be a matter of time before the major advanced global economies follow the US.

Year to date the benchmark index for 500 of the largest US companies has been having a very strong year…

Good economic policies = good stock market?

Data as of June 14 2023 8:07 UTC

Upcoming potential market drivers and key events on deck this week:

TODAY Wednesday, June 14

• US Fed interest rate decision
• US Crude oil inventories

Asset commentary:

• US 100 Index bullish conditions
• US 10-Year Bond downside vulnerable
• WTI Crude risk that the bearish conditions could remain

Thursday, June 15

• ECB Interest rate decision

Asset commentary:

• EUR/USD corrective bounce in play
• German 40 index potential to resume the prevailing uptrend

Friday, June 16

• Bank of Japan rate decision

Asset commentary:

• USD/JPY bullish conditions could resume on a move above the 141.064 resistance

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Today’s economic calendar

US Fed interest rate decision due today

• Fed is expected to leave the rate unchanged at 5.25%
• The prospects that the Fed has been implying that they will ship a rate hike could be viewed that the Fed is near the end of its rate hiking cycle

Asset spotlight: USD FX pairs, Gold/Silver, and US indices; US100, SP500, and Dowjones 30

US Crude Oil Inventories on deck today

• WTI Crude Oil down over -3.5% during the last 5 days, upside risk for price provided inventories fall more than the -1.1 million barrels expected

Asset spotlight: WTI Crude and Brent Crude

Source: TradingView / J. Knobel June 14 2023 7:58 UTC

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Commentary & insights

SPX500 Index: bullish extension in play?

Current price is $4,381 and has continued to advance higher at a steeper slope (see trendlines on chart). Upside prospects for potential extension towards the 4,430 - 4,512 zone can not be ruled out in the very short term (1-13 days). Downside risk seems to be below the 4,290s support area.

US100 Index: prospects remain for further upside extension

Technical commentary for US100 Index: Current index price is 14,954. The index is in an uptrend, this can be technically supported by the higher tops and higher bottoms observed on price (daily chart dow pattern), price being above its longer term valid trendline, as well as its short term valid trendline also being above its tentative very short term trendline (see chart trendlines).

Strong short term (14-25 days) key support can be seen near 14,305, while the prospects for a further price upside extension towards the 15,435 area can not be ruled out provided price can remain above the 14,305 support.