Eyes on the weekly close

The US indices closed yesterday’s trading higher across the board, supported by Tesla’s earnings and forward guidance. S&P500 managed to close the day at 4060, well over the weekly key resistance level mentioned in our previous reports at 4030. Today is considered the most important weekly close in the first quarter of this year, as a weekly close over 4030 would be a major sign that the bear market is over, and confirmation might come in from the Federal Reserve’s decision next week.

Currently, we maintain our estimates for a strong Q1 for the US equities, with a possibility that the bear market is over. The weekly close is the key and we will be following it carefully.

Economic releases ahead

Indicator Forecast Prior
US Core PCE Price Index 0.3% 0.2%
Personal Income 0.2% 0.4%
Personal Spending -0.1% 0.1%
Pending Home Sales -1.0% -4.0%
Revised UoM Consumer Sentiment 64.6 64.6
Revised UoM Inflation Expectations 4.0%

During the US session today, multiple economic figures will be released, which is likely to have a major impact on the markets. We will be watching two key figures, including the Core PCE Price Index and the revised University of Michigan Inflation Expectations. Further slowdown may spark another short squeeze, and SPX might end the week over 4,100, while disappointing data (surprise higher) would be sufficient enough to erase this week’s gains.

Short-term trades update

In our previous reports, we entered multiple positions including GBPUSD short, Gold short, and EURUSD short. So far, all these positions are still active and hopefully they will end up on profits over the coming days.

EURUSD rally finally stalled around 1.0920 which is our entry area and declined back to 1.0870 during the Asian session today. We maintain our short-term bearish outlook, targeting 1.08 as the first initial target, followed by 1.0760’s, probably next week.

GBPUSD also tried to push higher but failed once again around 1.2420, while we maintain our short position unchanged from 1.2420, while we are looking for another leg lower towards 1.2320s followed by 1.2270 especially since the RSI indicator remains overbought and started to shift lower.

Gold short position is now in profit with over $15 profit from the 1940 short entry, while we maintain our stop at $1950 for now. On the downside view, today’s data from the US might be the catalyst for another leg lower towards our initial target mentioned in our previous reports at $1900, followed by $1880 which could be seen next week.

We will keep an eye on our open positions until the weekly close before deciding on any new positions since all the positions are now in profit.




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