US30 slammed on data releases; new leg down

  • US30
    (${instrument.percentChange}%)


The US30 has charted another lower peak (LP) in its downtrend. The index trend shows a series of lower peaks followed by lower troughs, and this week's LP potentially sets up for the next lower trough. Moreover, the RSI, which indicates when a market is in excess, is not oversold, implying that the current impulse down still has room to move.

Today's data has had a severe impact on market confidence. Inflation came in above forecast, with annualised headline CPI at 8.6% (vs 8.3% expected), a 40-year high. The core number printed at 6% against an expectation of 5.9%. Moreover, the US consumer is feeling the pressure with the Unversity of Michigan consumer index collapsing to 50.2 (vs 58.1 expected).

Notably, Fed funds futures are now pricing, with a current probability of 62%, a 50 bps hike for September. The increase will impact the market rate of returns, which will continue to affect present values for as long as they adjust upwards.

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Russell Shor

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.

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