Tomorrow sees the Q4 earning season kick off, with several US banks reporting. We examine FXCM's US Banks basket (US.BANKS), which comprises JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, and Capital One Financial.
As we headed into 2022, US.BANKS traded in a sideways distribution pattern (red rectangle). The basket dropped below its 30-week exponential moving average (EMA), and the EMA turned down in February 2022. The RSI then traded on the bearish side of 50 (orange rectangle) as US.BANKS was marked down.
Since the second half of 2022, the basket traded sideways in what may be an accumulation pattern (green rectangle). Its price is looking to move above the 30-week moving average. A successful break above, and a turning up of the 30-week EMA will be bullish.
A movement of the RSI above 50 (blue rectangle) will also be positive. The longer the RSI can maintain above 50, the greater the likelihood that US.Banks will be marked up.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.