European and US indices test important technical resistances this week. The DAX is preparing to clear the major 38.2% Fibonacci resistance while the S&P500 challenged its 200-DMA yesterday, boosted by better-than-expected Walmart earnings.
Earnings and the FOMC minutes will be decisive for the short-term direction. The minutes, due today, will likely sound more hawkish than expected, as the Federal Reserve (Fed) rate expectations softened probably too much after last week’s CPI report in the US surprised with a softer-than-expected 8.5% print.
Elsewhere, US housing starts fell almost 10% last month, but a better-than-expected industrial production maintained the investor mood optimistic into the Fed minutes.
Inflation in Canada eased to 7.6% as expected in July, down from the 8.1% printed a month earlier. But Britain was not that lucky. July inflation in the UK came above the 10% mark, versus 9.8% expected by analysts.
The barrel of US crude rebounded from $85 level, as the API data showed a 448’000 barrel decline in the US oil inventories last week versus 117’000 decline expected by analysts. The more official EIA is due today and is expected to print a 300’000 rise in inventories.
Gold, on the other hand, is moving lower, under the pressure of a stronger US dollar into the Fed minutes.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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