HomeForex MarketS&P 500 Rallies to Six-Week-Highs, US Greenback Sinks to Help on FOMC

S&P 500 Rallies to Six-Week-Highs, US Greenback Sinks to Help on FOMC

S&P 500, US Greenback Speaking Factors:

The Fed hiked charges by 75 foundation factors on the July fee determination and, at this level, markets have dealt with the information in a constructive method because the S&P 500 has jumped as much as a recent six-week-high. The US Greenback pulled again and as of this writing is discovering assist across the weekly lows in a confluent zone. There’s a Fibonacci degree at 106.24 that’s helped to mark the lower-portion of that space together with a longer-term Fibonacci degree at 106.62. A trendline can be in-play, which connects swing-lows type mid and late-June, the projection of which began to come back into play final week. The grouping of wicks on the underside of candles on this space illustrates present assist serving to to carry the lows.

US Greenback 4-Hour Value Chart

Chart ready by James Stanley; USD, DXY on Tradingview

If the Fed Hiked, Why Did the Greenback Drop?

There have been constructing fears of a doable 100 foundation level hike at this fee determination so the truth that it got here in at 75 could have disenchanted a few of these exuberant fee hike bets. However, all through the press convention, FOMC Chair Jerome Powell had quite a lot of feedback that could possibly be learn as supportive for danger, remarking that the slowdown in Q2 was notable and that job creation, whereas nonetheless strong has slowed. The extra necessary element concerning future fee hikes is inflation and Powell has opined that wagers are moderating and that the employment price index can be an necessary indicator.

Powell additionally pointed to PCE as an inflation gauge and one thing that the financial institution can be watching intently. He mentioned sooner or later it is going to be applicable to decelerate fee hikes, and there simply so occurs to be a PCE launch on the financial calendar for this Friday.

So, doubtless, we are going to see this theme stay centerstage for the subsequent few days as tomorrow brings GDP and Friday brings PCE adopted by the College of Michigan Shopper Sentiment.

In USD, the Greenback stays perched close to not too long ago created 19 year-highs. The forex has been on its again foot for nearly two weeks, nonetheless, and the larger query as as to if bulls are in a position to drive USD or whether or not the forex pulls again to a deeper assist degree will doubtless have one thing to do with EUR/USD.

US Greenback Each day Value Chart

USD daily chart

Chart ready by James Stanley; USD, DXY on Tradingview

S&P 500

The S&P 500 has ran as much as a recent six-week-high on the again of this fee determination, and this extends the transfer from yesterday’s assist check to over 100 factors. That assist check yesterday confirmed up at an attention-grabbing space, proper on the 23.6% retracement of the 2022 sell-off, which had beforehand helped to set resistance.

This additionally exposes the subsequent spot of doable resistance on the 38.2% retracement of that very same Fibonacci examine, which plots round one other Fibonacci degree of notice on the 4100 degree. That spot was additionally prior assist in late-February, so this produces a little bit of confluence for resistance potential.

S&P 500 Each day Value Chart

SPX ES Daily chart

Chart ready by James Stanley; S&P 500 on Tradingview

— Written by James Stanley, Senior Strategist, DailyFX.com & Head of DailyFX Training

Contact and observe James on Twitter: @JStanleyFX

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