US30 weekly momentum shows strength

  • US30
    (${instrument.percentChange}%)


Source: www.tradingview.com

FXCM's US30 CFD has charted a bullish 1-2-3 pattern on the weekly scale. It seems to be in the midst of its next impulse move. To this end, we note that the stochastic has pushed into the upper quintile (blue arrow). The longer it stays in this region, the greater the chances of an impulse swing.

The US30 represents the value side of the market which tends to outperform in the early part of a bull market. So whilst it is still too early to call for a bull market, the DJIA (US30) outperformance makes us sit up and take notice.

In particular, it coincides with the topping out of median CPI and core PCE. Our concern is the wage inflation data that printed on Friday.

Trade the News: View our Economic Calendar

This upside surprise is a cause for concern as the Fed will not allow a wage spiral to entrench and will use aggressive policy to ensure this does not happen.

Given that the median inflation seems to be rolling over, this may reflect in the next wage data point. However, if it surprises again to the upside, the Fed will likely start flexing its muscles again, which will act as a headwind against risk-on instruments.

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.

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

Spreads Widget: When static spreads are displayed, the figures reflect a time-stamped snapshot as of when the market closes. Spreads are variable and are subject to delay. Single Share prices are subject to a 15 minute delay. The spread figures are for informational purposes only. FXCM is not liable for errors, omissions or delays, or for actions relying on this information.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}