empty
 
 

Forex Analysis & Reviews: US premarket on December 6: optimism has diminished
time 06.12.2022 03:25 PM
time Relevance up to, 07.12.2022 03:20 PM

On Tuesday, US stock index futures traded in a variety of directions as traders continued to speculate and assess the likelihood of a further slowdown in the rate hike pace in the US against the backdrop of data suggesting that tougher policy may be needed going forward - particularly in circumstances where the economy can withstand such tests. S&P 500 futures are trading slightly higher, while Nasdaq 100 futures are trading slightly lower. After a seven-week rally that has been gradually weakening, European stock indexes have made a small adjustment.

This image is no longer relevant

As I mentioned above, a stable US economy and a stable inflation rate are now inseparable. All of this harms expectations for a slower rate hike and the end of their growth cycle next year and also cancels out the positive mood that investors felt in light of the Chinese economy's recovery.

We can safely expect solid volatility at the end of the year because the US central bank is likely to continue to have a significant impact on the stock and bond markets in December of this year. The S&P 500 will continue growing at its fastest rate in the fourth quarter since 1999, but its pace will undoubtedly slow. Since the index is currently trading below its 200-day moving average, a correction might occur. Only 2% of this month's losses have been realized so far.

While the yield on 10-year Treasury bonds remained unchanged at 3.57%, bond yields also stopped increasing. Strong economic data for the US and PMI indices for the services sector have reignited talk of a rate increase. Traders have just experienced the data on the labor market, and there is another shock. Interest rate swaps indicate that the peak will exceed 5% in mid-2023. The benchmark set by the Fed is currently between 3.75% and 4%.

After four consecutive increases of 75 basis points, officials currently abstaining from public comment before the committee meeting suggested last week that the rate would only need to be raised by half a point on December 13–14. When economists' average forecast assumed rates at 4.6% next year, there was also talk that they would need higher rates than anticipated.

Beijing, meanwhile, has declared that it will do away with COVID testing requirements for the majority of businesses open in public areas, which is seen as a step away from the COVID Zero policy. However, despite some positive dynamics in Asian markets, risky assets did not receive much support in response to this news.

Regarding the S&P 500's technical picture, there has been a correction following a sharp increase in the price index. For today, it will be important to safeguard $4,003. We can anticipate a rise in demand for risky assets as long as trading continues above $4,003. This will set up favorable conditions for the trading instrument to strengthen and grow to 4,038 and 4,064, with the potential to reach $4,091. The slightly higher levels of $4,116 and $4,150 will increase the likelihood of an upward correction with an exit to the resistance of $4,184 if they are broken. Buyers need only declare themselves in the vicinity of $4,003 in the event of a downward movement, as below this point, the index will once again be under pressure. The trading instrument will move to $3,968 if this range is broken, with the $3,942 region serving as the farthest target.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $10000 more!
    In January we raffle $10000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

SPX target 4,140 as long as it trades above 3,880.

SPX is on positive grounds today and after a short-term pull back towards 3,880 where a higher low was formed, price is ready to break to new short-term higher highs

Alexandros Yfantis 14:58 2023-01-26 UTC+2

The report of the electric car manufacturer Tesla for the 4th quarter of 2022

The Tesla report for the fourth quarter of last year received a very favorable market response, which helped improve the NASDAQ index. The business announced earnings that exceeded both profit

Jakub Novak 14:50 2023-01-26 UTC+2

US premarket on January 26: Investors believe in US stock market growth

The sharp growth of US tech stocks boosted market sentiment amid optimistic earnings forecasts from electric car maker Tesla Inc. Futures contracts on the Nasdaq 100 index rose by about

Jakub Novak 12:52 2023-01-26 UTC+2

Short-term technical analysis on Caterpillar stock price for January 25th, 2023.

CAT stock price is still in a bullish trend making higher highs and higher lows. Price is very close to providing a new higher high above $260.39. However

Alexandros Yfantis 13:57 2023-01-25 UTC+2

PG reaches our first target

PG stock price has reached and surpassed our first pull back target which was at the 38% Fibonacci retracement. Short-term trend is bearish as price has started making lower lows

Alexandros Yfantis 16:56 2023-01-24 UTC+2

Qatar Investment Authority is the second largest shareholder of Credit Suisse.

As it turned out, the Qatar Investment Authority rose to the position of the second-largest shareholder at the end of last year after tripling its holding in the struggling Swiss

Jakub Novak 15:18 2023-01-24 UTC+2

US premarket on January 24: US stock market fears corporate earnings reports

On Tuesday, European and US stock index futures are trading lower, struggling to hold on to the previous day's rally as investors prepare for important earnings and expense reports from

Jakub Novak 13:46 2023-01-24 UTC+2

SPX bullish scenarios

SPX is trading again above $4,000 as price has managed in two trading sessions to eradicate recent losses in SPX. Price made a high at 4,015 and then pulled back

Alexandros Yfantis 17:07 2023-01-23 UTC+2

US premarket on January 23, 2023: investors increasingly ignore Fed statements

US stock indexes have advanced slightly and are ready to extend Friday's rally. At the end of last week, several Fed policymakers presented arguments in favor of easing the regulator's

Jakub Novak 13:24 2023-01-23 UTC+2

Weekly analysis on the stock price of Ford Motors for week ending January 20th, 2023.

In our previous posts on Ford stock price we have succeeded in forecasting the decline towards $11 after the rejection at the $14.50 resistance area and we also forecasted

Alexandros Yfantis 17:04 2023-01-20 UTC+2
Can't speak right now?
Ask your question in the chat.