empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

22.06.202214:07 Forex Analysis & Reviews: US Premarket for June 22: US markets fall before Powell's speech in Congress

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Futures on US stock indices fell on Wednesday after a fairly rapid growth was recorded yesterday. Traders tried to compensate for some losses after several weeks of sales, however, as has been repeatedly noted, all this was more like a "dead cat" than real purchases and interest from major players. Dow Jones Industrial Average futures fell 420 points or 1.4%, and S&P 500 futures fell 1.6%. Nasdaq 100 futures sank 1.8%. At the end of yesterday, the Dow rose by 641 points or 2.15%. The S&P 500 gained 2.45%, showing the best day since May 4. The Nasdaq Composite rose 2.51%.

Exchange Rates 22.06.2022 analysis

Growing fears that the US economy will slide into recession have recently put quite serious pressure on stocks. Last week, the Federal Reserve raised interest rates by three-quarters of a percentage point, marking the biggest increase in Central Bank rates since 1994. Powell said that a tougher landing of the economy cannot be ruled out, since the Central Bank is forced to actively raise the cost of borrowing in response to the highest inflation in the last 40 years.

According to Christian Sewing, CEO of Deutsche Bank, the onset of a recession in Europe and the United States is only a matter of time. Developed economies are already facing a high probability of recession, as central banks are forced to aggressively tighten monetary policy to combat inflation.

However, there are also those who, in their baseline scenario, do not see a recession in the United States in the next few years. UBS believes that, despite the risks of a hard landing, the pace of economic growth will not decrease much. "However, even if the economy does slip into recession, it will be shallow and will not be sustainable, given the strength of consumer and bank balance sheets," the company added.

Goldman Sachs, meanwhile, believes that a recession for the US economy is becoming more likely, stating that the risks are shifted for the worse. "The main reasons are that our underlying growth trajectory is lower now, and we are increasingly concerned that the Fed will continue to react harshly to high consumer inflation expectations. If energy prices continue to rise, it will only complicate the situation," the message for customers says.

Obviously, during today's speech to Congress by Fed Chairman Jerome Powell, market volatility will be quite high. Investors will be carefully waiting for any signals indicating further behavior of the committee.

Exchange Rates 22.06.2022 analysis

As for the technical picture of the S&P 500

Yesterday allowed investors to exhale a little, but it is unlikely that the level of $ 3,643 will be the minimum and the bottom that everyone is counting on. All that buyers of risky assets can count on today is a return to the control of the resistance of $ 3,731. A break in this range will push the trading instrument up to a new active movement, to the areas of $ 3,762 and $ 3,788, where large sellers will return to the market again. At least there will be those who want to fix profits on long positions. A more distant target will be the $ 3,826 level, but this is less realistic. In case of pessimism and another talk about high inflation and the need to fight it against the background of speeches by representatives of the Federal Reserve System with statements about more aggressive steps by the Fed, the trading instrument will easily update the nearest support of $ 3,677. A breakdown of this range will lead to a new sale at $ 3,643 and $ 3,608.

Jakub Novak
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off