Yesterday we saw a ranging market with it not giving us anything substantial but a thin market range of about 40 pips and yes why not? This sort of market condition tends to be a trend after big market moves which almost always summarize the week and we saw that happening on Wednesday. Now some fundamentals and we saw a bit of disappointments there, Weekly Unemployment claims remained almost unchanged and in sync with forecasts at 278K from 276Ke, a reduced number from last week’s 294K and Philly Manufacturing Index down to -1.2% from April’s -1.6% with Philly manufacturing sector showing a little bit of expansion. From Dudley’s sound bites-being a known dove, he switched his tune this time round with mentions of Feds credibility if they don’t implement monetary policies before the new president is sworn in with new policies and agendas even if Brexit vote was a variable that couldn’t influence the Fed decision. He also emphasized that the economy is on the right track with inflation rising in the short term towards the 2% ideal with his confidence showing that he forecasts Q2 growth increasing by more than 2% accompanied by tighter labor market conditions.
Now with all these from US, let’s see how the charts faired:
Daily Chart Analysis
With the ranging market, bears and bulls matched and that is probably why the market traded in a very narrow range of 40 pips and this culminated in a doji candlestick. It is also worth noting that last week’s low was not breached and markets reversed from that support formed by 05.05.2016 candle stick. The market is however making a series of lower highs even if the support stands forming a bullish flag with a break below the minor support imminent. Volumes are reducing so we shall continue to hold our shorts with reference to the weekly chart as our main trend.
4 Hour Chart Analysis
It is clear that the support still stands and price action bounced off from our support as indicated by the green triangle in the charts. Both OBV and stochastics are increasing in momentum to the upside, but this will be short lived if we consider that in the 1 hour chart, there is a sell signal which formed. If anything happens, then look at the resistance trend line in this time frame as your selling zone because price is likely to reverse from there.
15 Min Chart Analysis
The Asian session was bullish with news that Y/Y Credit Card spending rose to 9.1% from last month’s 4.8% and we saw that spike upwards then price reversed after momentum reached the overbought region of the stochastics. Yesterday’s high will be our temporary support and it will most likely be broken with price action not going below yesterday’s low-100 Fibonacci Level. Since there will be no major news from both economies, we shall be looking to see how the existing home sales turns out to be today at 1400 GMT at 5.40Me from last month’s 5.33M with positive records increasing the probability of next month’s hike.
Have a pipful day and a nice weekend.