Bullish Markets in the US Inflation week?


12 January 2023 - 19:05

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Last week we saw a sharp rally on Friday. Will it continue this week too?

Bullish Markets in the US Inflation week?

Last Friday showed excellent bullish strength on the markets precisely in line with the release of a market mover, the one relating to NFP Americans, an excellent opportunity for the markets to show teeth and try to recover after weeks of negativity, especially on the American stock markets. Nasdaq, the special observed of the last few weeks, made an important performance from lows going just below 10700 points to then restart vigorously toward and beyond 11000 points, a daily performance from lows of around 2%.

This could be a good sign of recovery for the American markets which have expressed a certain weakness against the European markets which in recent weeks have shown themselves to be much more tonic and consistent on the upside, strengthened by a EurUsd exchange rate which has been strong since the end 2022.

We have another major market mover this week: US inflation, which is seen again on the downside and could again drive stock market performance this week. In this context, it is necessary to carry out a technical analysis to see which levels to keep an eye on and to get a better idea of what could happen during the week and why not during the month of January.

The Nasdaq Situation

What happened on the Nasdaq on Friday was widely predicted with some precision in the last episode of Trading Time, the Money.it column dedicated to the world of financial markets, trading and investments, a movement that was predictable only after an analysis that foresees the use of longer time frames in intraday operations. There was talk of the fact that there was a lack of a final market mover, that of NFPs due out in the USA and that this would have led to an increase in volatility and a consequent strong bullish movement for the day on Friday, an event that took place precisely at the exit of the data and the opening of the US cash market.

Now the technical situation is interesting as we have seen a recovery dynamic precisely in the 10700-10800 area, an area that we have taken as a reference for an interesting rebound, therefore the weekly dynamic closed in positive thus confirming a trend that tends to bullish this week and next week. The first upside target for the Nasdaq was precisely the 11000 area, the area touched on Friday and at this moment the dynamics suggest that the next movement target could be the area between 11200-11300.

However, beware of possible bearish movements over the next few days as on a weekly basis, at least in the first part of today, we have not seen updates on the lows and consequently we could hypothesize downward extensions to try to find lows to buy back for a possible bullish movement this week and why not for the next. At the moment, therefore, even before paying attention to the basic dynamics, we should pay attention to the possible market movers for the week which take place between Tuesday and Thursday.

There will be a speech by Jerome Powell on Tuesday at 15:00 which could increase volatility on the markets and followed by the data on US inflation on Thursday, a figure expected at 6.5% against 7.1% of the previous figure. Inflation is still a market mover, so we still have to pay attention to this type of data for several more months before passing the baton to what could be the next market mover who identifies at a macroeconomic level in the unemployment rate.

What could happen today?

The technical situation is very delicate, in the sense that the market is still stunned by Friday’s strong rally, therefore we could see a substantially lateral day on the highs and we could probably see the beginning of a bearish movement that takes some interesting lows . The area between 10850-10950 on the Nasdaq is a valid area to see upward stretches but, we repeat, the market movers are still distant in terms of time, there are still 3 full days of trading left and therefore we could see a situation of "static" until the expected market movers arrive.

Original article published on Money.it Italy 2023-01-09 13:57:20. Original title: Mercati al rialzo nella settimana dell’inflazione Usa?

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