Weekly Market Outlook FOMC, CPI & FAANG earnings in focus

Juli 26, 2021 14:00

This week, all eyes turn to Wednesday’s US FOMC Press Conference. Traders will be eager to learn more about the Fed’s tapering plans after a dramatic shift in policy last month which sent the US dollar surging higher.

Consumer Price Inflation (CPI) figures will also be closely watched this week in Australia and Canada. Inflation is one of the key metrics used by central banks to determine when to cut or increase interest rates.

US earnings season has so far provided a big boost for US stock market indices. As European earnings season gets underway, traders will be focused on European stock market indices which have remained fairly range based in recent months.

You can learn more about some of the global themes affecting the markets in this selection of new education articles.

Weekly Forex Calendar

Source: Forex Calendar from the MetaTrader 5 trading platform provided by Admirals.

 

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 7.00 pm BST Wednesday 28 July, the US Federal Reserve members release their latest FOMC Statement. This will be followed by a press conference by Fed Chairman Jerome Powell at 7.30 pm BST.

The Fed have already announced a major shift in policy actions where they are now focused on tapering much sooner than previously stated. Traders will be keen to know more details about when the tapering will start and what the reduction in asset purchases will be.

However, it is a tricky situation as since the Fed announced their plan to start tapering, the Delta variant has taken hold in the United States. This is now the most dominant strain in the US as it is in most countries around the world.

Source: Admirals MetaTrader 5, USDX, Monthly - Data range: from Apr 1, 2005, to Jul 25, 2021. Performed on Jul 25, 2021, at 7:00 am GMT. Please note: Past performance is not a reliable indicator of future results.

 

The monthly price chart of the US Dollar Index shown above depicts a clear long-term consolidation pattern, as shown in-between the two black horizontal lines. At the beginning of the year, the price rejected the bottom of the consolidation pattern sending the US dollar higher.

However, the weekly chart below shows it is now running into some technical resistance around $93 which is March’s high.

Source: Admirals MetaTrader 5, USDX, Weekly - Data range: from Nov 12, 2017, to Jul 25, 2021. Performed on Jul 25, 2021, at 7:00 am GMT. Please note: Past performance is not a reliable indicator of future results.

 

This could be an area where buying momentum could start to wane. But, a break above this price level could see the US dollar try to move back to the top of the long-term monthly range shown in the first chart.

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

While fund managers have bemoaned the elevated prices in US stock market indices, retail dip buying has kept the overall trend alive. The Nasdaq 100 and S&P 500 stock indices surged to record highs last week but it will be worth watching the Fed’s FOMC Press Conference for any changes in sentiment.

Source: Admiral Markets MetaTrader 5, SP500, Daily - Data range: from Oct 29, 2020, to Jul 25, 2021, performed on Jul 25, 2021, at 6:30 pm GMT. Please note: Past performance is not a reliable indicator of future results.

 

Past five-year performance of the S&P 500:

  • 2020 = +16.17%
  • 2019 = +29.09%
  • 2018 = -5.96%
  • 2017 = +19.08%
  • 2016 = +8.80

 

The daily chart of the S&P 500 stock market index shown above, highlights the long-term bullish trend that started in October 2020. As all the moving averages are still pointing higher, it’s clear evidence the trend is still up with buyers active around these levels.

US earnings have been strong and that has helped sentiment. As European earnings gets underway, keep an eye on these US and European companies that are due to report this week among others:

  • Monday – Louis Vuitton, eBay, Visa, AMD
  • Tuesday – Boeing, Starbucks, Microsoft
  • Wednesday – L’Oreal, Barclays, Ford, Facebook, Apple, Google, Amazon
  • Thursday – Shell, Airbus, Lloyds Banking
  • Friday – AF-KLM, Exxon Mobil, Procter & Gamble

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:

  1. 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.
  2. 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.
  3. 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.
  4. The Analysis is prepared by an independent analyst, Jitan Solanki (analyst), (hereinafter “Author”) based on their personal estimations.
  5. 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.
  6. 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.
  7. 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.
Avatar-Admirals
Admirals Eine Komplettlösung für das Bezahlen, Investieren und Verwalten Ihres Geldes

Admirals ist mehr als ein Broker. Wir sind der Dreh-und Angelpunkt für Ihre Finanzen, indem wir Ihnen eine breite Palette von Finanzprodukten und -dienstleistungen anbieten. Wir machen es möglich, persönliche Finanzen durch eine Komplettlösung für das Investieren, Ausgeben und Verwalten von Geld anzugehen.