Weekly Market Outlook: US FOMC in focus
After last week’s impressive rally in the US dollar all eyes will now turn to this week’s US retail sales figures on Tuesday and the US FOMC press conference on Wednesday. Traders will be focused on whether the data supports a further rally in the dollar.
The moves in the US dollar this week are likely to have an impact on US stock indices too. Nearly all major stock indices closed higher last week and traders will be looking for signs of the rally to continue.
You can learn more about some of the global themes affecting the markets in this selection of new education articles:
Weekly Forex Calendar
Did you know that three times a week, three professional traders talk through the markets live and show you how to identify potential trading opportunities? Reserve your complimentary spot in the Admirals Spotlight webinar now by clicking the banner below!
Trader’s Radar – FOMC Press Conference
At 7.30 pm BST on Wednesday 16 June, traders will be glued to the US FOMC Press Conference to gain insights on the next policy move from the US Federal Reserve. Analysts and traders have been forecasting that the Fed will need to raise rates sooner than they say, due to higher inflation. So far, the Fed have so far remained firm on their timeline.
It’s one reason why the majority of the US dollar currency pairs have traded in tight consolidations in recent months. The interest rate differential play is being muted by the central bank.
Most market participants are expecting the Fed to remain firm on their timeline so no changes are expected. However, if there is even a slight change in tone the volatility in the US dollar could start to pick up so it’s one to watch.
In the long-term, monthly price chart of the US dollar index shown above, it’s clear to see the range that has developed between ~$102.00 and ~$88.00 (the two black horizontal lines).
The price has air-kissed the lower level of intermediate support around ~$89.00 but has not yet come down to test the ~$88.00 price level. However, any positive news could see the bulls try to build around these zones.
If you’re feeling inspired and ready to trade live in the market, you can open a live trading account by clicking on the banner below and accessing an impressive range of trading features to support you in your journey.
Corporate Trading Updates and Stock Indices
Currently, stock market investors are focused on the ‘reopening’ trade. As economies reopen, business activity has started to pick up as well. However, it’s hard to know how much of this bullishness is already priced into the market.
Most stock market indices are trading at record highs. If central banks continue to stick to their narrative on keeping rates lower for longer than this may continue to fuel the stock market rally.
Past five-year performance of the S&P 500:
- 2020 = +16.17%
- 2019 = +29.09%
- 2018 = -5.96%
- 2017 = +19.08%
- 2016 = +8.80%
- 2015 = -0.82%
The S&P 500 stock market index continues to trend higher, as shown in the daily chart above. Regardless of fundamentals, price momentum is still strong as shown by the correct bullish order of moving averages.
However, volatility has weakened recently but is set to rise after this week’s FOMC press conference. Algo buying has been the common theme in recent weeks but a break to new record highs could attract even more momentum.
Did you know that you can use the Trading Central Technical Ideas Lookup indicator to find actionable trading ideas on this index and thousands of other instruments across Forex, stocks, indices, commodities and more?
You can get this indicator completely FREE by upgrading your MetaTrader 5 trading platform provided by Admirals to the exclusive Supreme Edition!
INFORMATION ABOUT ANALYTICAL MATERIALS:
The given data provides additional information regarding all analysis, estimates, prognosis, forecasts, market reviews, weekly outlooks or other similar assessments or information (hereinafter “Analysis”) published on the websites of Admiral Markets investment firms operating under the Admiral Markets trademark (hereinafter “Admiral Markets”) Before making any investment decisions please pay close attention to the following:
- This is a marketing communication. The content is published for informative purposes only and is in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
- Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the content.
- With view to protecting the interests of our clients and the objectivity of the Analysis, Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
- The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.
- Whilst every reasonable effort is taken to ensure that all sources of the content are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis.
- Any kind of past or modeled performance of financial instruments indicated within the content should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
- Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, please ensure that you fully understand the risks involved.
