Weekly Market Outlook: FOMC and European PMIs in focus
While the US dollar is likely to be in focus this week, traders will also be digesting the Australian employment report and European PMI figures from Germany and France. The euro has had good volatility over the past few weeks but is still directionless in the long term.
Corporate earnings are still in focus with a variety of companies reporting, including Alibaba and EasyJet, among others.
You can learn more about some of the global themes affecting the markets in this selection of education articles:
- How to Start Investing in Water Stocks
- How To Invest In The Ftse250 Index
- Top 4 Investing Strategies For 2021
- How To Build An Investing Portfolio
- How to Invest in China’s Shanghai Index
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 - European PMIs
On Friday, there is a range of different PMI (Purchasing Managers Index) figures released between 8.15 am and 9.30 am BST. This includes both France and Germany Flash Manufacturing and Services PMI figures, as well as figures for the overall Eurozone.
As Europe has finally got to grips with the coronavirus vaccine rollout, economists are bullish on the output of the service and are forecasting a rise in the PMI number. However, some analysts remain concerned about how much of that optimism has already been priced into the recent rally higher in the euro.
Nonetheless, it could be an interesting time for the currency which has put in an impressive rally against the US dollar over the last month, shown by the weekly chart below.
The recent rally higher in EURUSD, recorded another swing higher low, keeping the long-term uptrend intact. If the price can continue higher, traders will be eyeing the 1.2453 price level which is a multi-year high and long-term resistance.
However, traders will be keen to see if price can first breakthrough horizontal resistance on the daily chart around the 1.2173 price level, shown by the upper horizontal resistance line on the daily chart below.
If the price fails to break higher at the upper resistance, traders may look towards the lower historical horizontal support level around 1.1982.
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
After the recent sell-off in global stock indices, many of them have retraced to significant areas of support. At the end of last week, downside momentum waned with an impressive rally higher. However, most still ended the week lower.
The direction of global stock markets may well rest on central banks once again. Only this time, it will be when they decided to start increasing interest rates again. This was one of the causes of the recent sell-off, a concern that the Fed would have to increase rates sooner rather than later because of inflation.
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%
In the daily chart of the S&P 500 stock market index above, it’s clear to see that the uptrend is still intact. The price is still trading above the 50-period (red) exponential moving average and the 100-period (green) exponential moving average. These are also still pointing upwards.
Historically, the price has turned around at these moving averages. As we already turned higher from the 50-period moving average at the end of last week, traders may now look towards lower timeframes for more clues on the strength of buyers.
This could involve looking at price action trading entry levels and technical trading indicators.
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.
