US inflation in focus this week, Dow Jones with room to move to the upside? [Video]
|We see the US indices slowly creeping back to all-time highs but the Dow Jones Industrial Average seems to be stuck at resistance.
We see price action on the Dow Jones Industrial Average in an ascending triangle and we will look for signs of a break to the upside.
Why is it lagging behind the others?
The companies in the Dow Jones Industrial Average are more susceptible to interest rates so news from the Fed will affect pricing.
Also, the current AI and tech boom is positively affecting the other indices more.
Speaking of interest rates, USD continues weaker and if lower rates are coming, it will go weaker still.
You will see the same pattern on most USD pairs and we will monitor this to see if we have a rising wedge in price action.
If so, we may get a technical reversal.
Watch the fundamentals as progress in US/China trade talks may bolster USD.
Tomorrow and Thursday, we have US CPI and PPI which will indicate to the Fed how they are doing with inflation.
If inflation is lower, they will be inclined to lower rates and that will weaken USD and strengthen indices.
We also have monthly GBP from the UK.
The fact that GBP is weak against some currencies but stronger against JPY and USD gives us opportunities.
For example, we have an ascending triangle on GBPJPY with resistance to 196 yen.
That’s all for now.
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