Today the last most important data before Christmas come out, we are talking about US GDP, the American PCE and unemployment claims.
We are getting ready for the closure of the week before Christmas, an important week before a possible Christmas rally which, as we recall, is a stock market event that usually takes place in the days after the Christmas holidays, precisely in the last days of the year and in the very first days of the new year.
In this context we therefore find ourselves with the release of the latest important data this weekend with the US GDP for the third quarter, the UK GDP for the third quarter already released in the morning and the PCE which is the data on US inflation that is taken into consideration by the Fed for the implementation of its monetary policies. It is therefore necessary to make a technical summary of the situation also to understand how the trading week could close, but above all how the trading year could close.
The latest most important data
This morning we saw the release of data from the UK, data relating to GDP both on a quarterly basis and on an annual basis, both of which were worse than expected. The data that did not heavily influence the price trend on Forex at least for the moment. This afternoon, before the opening of the American market, the data relating to the GDP of the third quarter in the USA, the data on the PCE, the inflation index taken into consideration by the Fed to establish its monetary policy, will be released.
These data are therefore very important and their influence could be decisive for the trend of the trading week. We also recall that we have data relating to the labor market, the initial requests for unemployment benefits, in short, we have data that could be decisive for establishing how the US economy is reacting to the increase in interest rates implemented by the Fed since March of this year. We basically have the latest wave of fundamental data to determine how the trading year might end.
Stock market, what’s going on
The stock market attempted a good recovery after the lows seen in the last two days of trading, both on the European and American markets. However, we must pay close attention to the weekly dynamic which still remains a short-term bearish dynamic and the bullish extensions we are seeing must be taken with great caution and prudence. In this situation, therefore, we must understand what is happening on the various indices and this time we start from the Dax, the German index. On a weekly basis we see a bearish dynamic which has seen a reaction on the movement targets of this bearish, i.e. the 13900 area.
Be careful because the trend remains bearish and therefore any bullish extensions could be taken by the market to push prices back down towards the lows, a normal and dutiful re-test to attempt a bullish extension for the next few weeks. We recall in this regard that in 2023 we could expect further declines on the markets and therefore the bearish path must first be opened by a market recovery at least for the first few weeks of the year.
As far as the Nasdaq is concerned, the situation is more precarious given that we are at important lows, we are talking about the lows of July and also in this case a possible upward extension could be useful to create a bearish impulse useful for rebounding the market for the first weeks of 2023. In this context we must therefore wait for the data to come out to get an idea of what could happen, above all to see if the market is going to test some technical levels.
Levels to watch
We certainly have to give weight to the weekly levels we see on the charts. As for the Dax we have to keep an eye on the 14200-14300 area while for the Nasdaq area 11300-11400 which corresponds to last week’s lows. In practice we could expect important tests of these levels which could act as short-term highs for the market which is actually creating the basis for a short-term rebound to then attempt the formation of useful maximums for an important long-term bearish movement.
Original article published on Money.it Italy 2022-12-22 12:53:53. Original title: Mercato azionario, la situazione prima di Natale
