US30 Harmed By High US Inflation & Aggressive Market Expectations For Rate Hikes

  • US30
    (${instrument.percentChange}%)

US30 – H4

US Headline CPI Inflation surged 7.5% year-over-year in January, as Thursday's data revealed, marking the highest level in forty years. This sent US 10 Yields above 2% and caused the US stock markets to plunge, with the US30 posting its worst day since late 2021.

Markets now expect a more aggressive rate hike path by the Fed, with CME's FedWatch Tool, projecting a larger 50 basis point increase in March, with 93.8% probability at the time of writing. [1]

US30 extends its losses today, with the technical outlook not much changed from our last analysis. It tests the 35,000 region which exposes it to the 200Day's EMA (currently at around 34,630), but a breach that could open the door to sub-35,500 moves may need fresh catalyst.

Despite the negative mood, the Index finds some support at around 35,000 and it could find the chance to break into profits, but a turnaround in sentiment is needed in order to return above the EMA200 (35,370-35,470), while the Daily Ichimoku Cloud still looms large.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 25 Jun 2022 https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html#

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