PROCESS IS KEY….DEFINE LEVELS – MARK EXPECTED PRICE ACTION – TRADE THE SETUPS
REVIEW OF DAILY LEVELS ON KEY MARKETS AND FOMC
European and US Indexes moved higher after the US CPI gave bulls hope that FOMC will signal a pause in interest rate hikes. The Fed is largely expected to hold off on a rate rise in the coming US session although Core Inflation (taking out the volatile components such as oil…which has been going down) is resilient, which will be of concern for the Fed. If oil goes back up then expect CPI to rise again which is not what the Fed wants. I see the short term risk is down especially if we see a surprise rate rise from the Fed. A lot of traders have factored in a pause so tonight could see a good spike in volatility.
Expecting a strong open for the ASX200 up 45-50 points while the Hang Seng is expected to open flat and the Nikkei to also open strong up 400 points as it continues to power higher.
I still expect that the Fed has a balancing act to contend with as I see inflation remains relatively sticky while economic growth slows. I also expect that the rate rise cycle is coming to an end although see a few more rises on the horizon. If that is the case, then the market has to deal with an economy that will see higher US debt levels and lower GDP to finance that debt.
Some KEY ACTIONABLE LEVELS into the Asian market session. Review of the European and US sessions and what that will mean to the price action in the near term along with key levels to watch.
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