The US30 trades between the lower blue and red bands in its bear channel. Friday's price action shows a long red candle, with the index dropping 3%. This decline was after Fed Chair Powell's hawkish comments at Jackson Hole. He said the fight against inflation would continue, acknowledging it would be painful. Nevertheless, the Fed aims to return inflation to an average of 2%. Powell's comments suggest a potential 75bps hike in September is a strong possibility.
Higher rates suggest a lower discount factor. Thus, the longer the US30 remains in the bearish zone, the greater the likelihood of continued pressure on the index.
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.