US30 Slides after its Best Week in 2+ Years
US30 Analysis
The Fed's aggressive tightening path has created fears of a slowdown in the economic activity and recent talk of "soft or softish landing" by Mr Powell [1], does not inspire much confidence that the bank won't send the economy into a recession and unemployment higher, while GDP contracted by 1.5 in Q1, as per last week's preliminary figures.
This has created an unfavorable environment for Wall Street this year, which culminated to a massive eight-week losing streak and fourteen-month lows earlier in May for US30.
However, inflation has shown some moderation recently and the Fed seems to be a bit conservative, with Mr Powell having hinted at 50 basis point increases "at the next two meetings", while ruling out more aggressive 75 basis point moves. [1]
US30 has been able to avoid a bear market and given last week's broader sentiment improvement, it managed to pause its losing streak with a relief rally that led to its best weekly performance in more than two years.
Today it comes under renewed pressure and falters above key levels, after governor Waller (voter) went a step further on Monday, backing 50 basis moves for "several meetings" and supporting interest rates "at a level above neutral" by the end of this year. [2]
US30 now risks with a return below the EMA200 (black line) towards 32,223, but it is probably early to talk for a steeper decline that could threaten 31,318.
On the other hand, as long as they defend the EMA100, bulls can build on last week's rally and make another push 33,649, but the daily Ichimoku cloud looms large (34,00-34,270).
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
References
| Retrieved 31 May 2022 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20220504.htm | |
| Retrieved 19 Apr 2026 https://www.federalreserve.gov/newsevents/speech/waller20220530a.htm |
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