2023-07-13 05:46:00
US stocks rose on Wednesday following figures showed a slowdown in inflation levels. The monthly CPI came in below expectations at 0.2% while the annual figures fell to 3.0% compared to expectations of 3.1%. Investors view the latest data as a positive sign for the Fed, which aims to reduce inflation levels without hurting the economy and averting a potential recession.
Looking at the market reaction, Jones advanced 0.26%, while the index gained 0.74% and jumped 1.15%. After yesterday’s close, it is important to note that both the S&P and NASDAQ closed at their highest levels since April of 2022. Banking stocks were among the best performers with Citi and Goldman Sachs (NYSE:) adding 1.8%. and 1.7%, respectively.
In the foreign exchange market, the US dollar declined sharply, and the US dollar managed to record new highs for the year 2023, as the positive momentum helped the single currency to cross the 1.1100 barrier. Meanwhile, USDCAD extended its decline near a two-month low following the Bank of Canada decided to raise interest rates by another 25 basis points, to settle at 5.00%. The Canadian dollar benefited from the Bank of Canada’s recent monetary policy tightening.
In the commodity market, trade in line with our expectations. As we mentioned in our previous reports, the yellow metal showed a bullish price reversal pattern known as the inverted head and shoulders, and prices managed to breach the neckline of this pattern, which is near $1935 an ounce. Prices advanced to reach our first target, which is located at the 1956 level.
As for now, the trend is still bullish in the near term, which may lead to a further rise towards the next barrier located between the levels of 1967 and 1973.
Meanwhile, WTI prices extended their advance, reaching the level of 76.00.
Where the positive momentum remains strong. However, the possibility of starting a corrective move remains before the start of another upward wave.
And if we see a decline in the coming hours, we will look for the area of 74.70-74.00 to provide support for the oil, followed by the level of 73.85 as an extension. On the other hand, a successful breach above 76.00 is likely to target the next resistance area located between $77.00 and $77.90 per barrel.
Finally, looking at today’s economic calendar, investors will be waiting for the release of the UK’s monthly GDP which is expected to drop from 0.2% to -0.3% as well as industrial and manufacturing production data. In the US, Unemployment Claims are set to rise from 248K to 251K, meanwhile, the focus will be on the PPI numbers which will give the markets fresh guidance on the state of inflation as the PPI forecasts point to a possible rise from -0.3% to 0.2%.
Dow Jones indexThe euro once morest the US dollar
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