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Hey Traders,
The PPI and University of Michigan Consumer Sentiment was the main highlight of last week. The PPI was above expected indicating that the economy is still hot which can push the FEDs to push for a more aggressive rate hike. The Dollar gained in strength upon the release of the result but gave back most of its gain soon after. The UoM Consumer Sentiment came in higher than expected as well indicating that people is confident of the economy. Although market movement is limited at the end of the day, the main concern would be Powell and the FEDs stance regarding the strong economy of the United States.
Key an eye out of the FOMC next week and with such a strong PPI report, a 75 hike is still on the table. Expect volatility.
Upcoming Economic Release:
S&P500 Futures
The S&P500 trades in flat as it break out of the ascending trend line, invalidating short term bullish momentum. In our previous post, we mentioned that the index is overextended and indeed the index trades in consolidation last week. Short term support level at 3915 region and a breakout of this support can indicate more downside towards 3752 region.
Dollar Index (DXY)
The United States Dollar Index managed to not develop new low this week as it trades in consolidation at 105 key region. However, downside momentum seem to limited as 50 exponential moving average has multiple contact within a short period. We may potentially see upside movement of the Dollar potentially towards the 107.155 resistance region.
Gold Futures
Gold trade to new recent high earlier the week towards 1820 but momentum slowed as the Dollar regained some of its strength. Seasonally, Gold is strong at the end to the first few months of the next year. Value point of entering long position would be at 1747 support region.
Trade Recap
No Updates
Trade Analysis / Setups
USD/JPY (Analysis 50-1)
Analysis: Price is respecting the descending trend line. However, the trend is also showing sign of exhaustion with possibility that it will begin trading up. We will only look for long opportunity when price trades above the 137.75 region as it will invalidate both the descending trendline and the resistance level.
Long opportunity: Break and retest confirmation at 137.76 region towards 141.57 as Take Profit - 1 level.
Corn Futures (Analysis 50-2)
Analysis: Price has shown sign of reversal from the resistance zone, where we will trade towards the next support region.
Short opportunity: At market reopening as High Risk trade towards 639.0 as Take Profit - 1 level.
Cheers to all our member who managed to pack some profits this trading week.
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