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Market Insights

Trading Insights: The Fed is on track, will they kill the US100 rally today?

Copy of Blog Images - Skilling - 2023-07-26T104932.134

Market Talk:

US Fed interest rate decision due today at 6 PM UTC

Today's focus is not on the rate increase, but on how the Fed will communicate how it will respond to the slowdown in inflation during the previous 12 months.

Screenshot 2023-07-26 105305

The above chart illustrates the 12-month trend in US Core Consumer Price Index (CPI)

Market Commentary

600% increase in US interest rates during the 12 month US rate hiking cycle.

Today the US Fed is expected to increase interest rates by 0.25%, by this evening the US Fed Funds Rate could be at least 5.5%.

Today, the rate is 5.25%.

One year ago the Fed Funds Rate was just 0.75%. That is a 600% increase during the last 12 months.

Screenshot 2023-07-26 105338

The Fed is on track to completion of its core missions:

  • Price stability
  • Maximum employment

Screenshot 2023-07-26 105358

US unemployment remains near historical lows.

US100 Index +42% year-to-date

Screenshot 2023-07-26 105426

Skilling US100 CFD product tracks the US100 Index

  • The US100 Index is an index that tracks modern day industries, included in the index are 100 of the largest and most innovative non-financial companies listed on the US100 stock market.

Skilling offers US100 CFDs which can be traded either long or short, allowing traders and investors with big or small accounts the ability to express individual trading views 24 hours a day 5 days a week!

When trading, your capital is at risk.

Today’s economic calendar

US Fed interest rate decision due at 6 PM UTC

  • It's expected to raise +0.25%
  • Current interest rate 5.25%
  • Expected new rate 5.50%

Assets to watch: EUR/USD, Gold, US100

Screenshot 2023-07-26 105447
Source: TradingView / J. Knobel July 26 2023 6:38 AM UTC

Today’s price action spotlight

EUR/USD strong support spotted near the 1.0940s

EUR/USD current price 1.1065 is -140 pips below its 5 day highs, the recent price pullback appears to be another corrective downside move since the start of the EUR/USD multi-month uptrend (see chart). Further downside remains on the table with the key support near the 1.0940s as a likely resting area in the very short term (1-13 days). Provided price support holds, an attempt to retest the 52 week highs near 1.1275 can not be ruled out, which if cleared opens the door for a further extension towards the 1.1350s. Downside below the 1.0940 key support.

Screenshot 2023-07-26 105509

Gold keeping alive the prospects for a return above $2K?

Gold's current price $1,969 is above its 50 day simple moving average. Higher tops and higher bottoms observed on price since the June 29th lows - July 20th highs indicate bullish contentions for the medium term (26-49 days). Above the key support seen near the $1,950s, upside prospects for a return above $2,000 for a test of the May 12th highs near $2,020 can not be ruled out. Downside risk below the $1,950s could expose the $1,880s (see chart).

Screenshot 2023-07-26 105540

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Analyzing yesterday's market insights could help comprehend trends and make informed decisions for today's trading. Check out our previous trading insight here!

Not investment advice. Past performance does not guarantee or predict future performance.