Markets Prepare for Next Move as Fed Minutes Loom

Wednesday Market Recap

Asset Current Value Daily Change
S&P 500 2425 -0.03%
DAX 12430 -0.04
WTI Crude Oil 46.20 -1.81%
GOLD 1220.00 0.09%
Bitcoin 2575 -1.58%
EUR/USD 1.1324 -0.22%

Markets still seem to be stuck in the “long-weekend” mood after the quiet period around the US Independence Day. Volumes and Volatility are low around the globe and the major stock indices are trading in their recent narrow ranges. The Arab States that sent an ultimatum to Qatar are meeting today in Cairo to discuss the answer by the Gulf State, and a confrontative move could serve as a trigger for the next major shift in the main asset classes. Oil is already down in early trading today following the strong bounce of the past week, while the Dollar also continues to rally, reversing some of its recent losses.

WTI Crude Oil, 4-Hour Chart Analysis

Currency markets are otherwise calm, in line with the broader trends, as investors are waiting for today key releases of the Federal Reserve’s meeting minutes. Central banks were the main drivers in of forex trends recently and the Fed’s future policies are the most important ones for all of the major currencies. It wouldn’t be a surprise to see another bullish counter-trend move from the Greenback, as the recent plunge drove sentiment to a bearish short-term extreme. The Australian Dollar continues to be active following the RBA’s meeting yesterday, with the dip in gold and oil also weighing on the currency, together with the Canadian Dollar.

Cryptocurrencies

The crypto market is mixed today, with diverging performances from the majors and the small cap coins as well. Ethereum and Bitcoin are slightly lower, although the primary support levels are holding for now and there is no strong downside momentum. Among the relatively strong coins, Dash is testing its all-time highs, while Litecoin bounced off its overnight highs after nearing some long-term target levels. Zcash, Stratis, Bitshares, and NEM are among the weaker currencies today after their recent rally, as range trading continues to be dominant in the segment.

Dash, 4-Hour Chart Analysis

Technical Picture

The DAX is in a holding pattern inside the crucial support zone that we have been monitoring in the previous weeks, with the 12,500 and 12,350 levels being in focus. The long-term uptrend has been broken last week, and, for now, the trend is bearish although the oversold short-term MACD suggest more consolidation before the next leg lower. We expect a test of the support zone around 12,200 efore a meaningful move higher could develop.

DAX 4-Hour Chart Analysis

Key Economic Releases on Wednesday

Time, CET Country Release Actual Expected Previous
10:30 UK Services PMI 53.4 53.5 53.8
16:00 US Factory Orders -0.4% -0.2%
20:00 US FOMC Meeting Minutes

Key Economic Releases on Thursday

Time, CET Country Release Expected Previous
3:30 AUSTRALIA Trade Balance 1.11 bill 0.56 bill
9:15 SWITZERLAND CPI Index 0.0% 0.25
13:30 EUROZONE Monetary Meeting Accounts
14:15 US ADP Employment Change 181,000 253,000
14:30 CANADA Trade Balance -0.5 bill -0.4 bill
14:30 US Initial Jobless Claims 245,000 244,000
16:00 US ISM Non-Manufacturing PMI 56.6 56.9
17:00 US Crude Oil Inventories 0.2% 0.2%

Featured image from Shutterstock

Author:
Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.

Leave a Reply