(MENAFN- Daily Forex)
The s&p 500 initially shot higher during the trading session on Monday, as traders continue to see bullish momentum from the Friday session as viable. The market is likely to see a lot of hesitation, and that's exactly what happened later in the day. After all, Jerome Powell is speaking during the day on Tuesday, and he could crush the market if he continues to sound very hawkish.
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The market is likely to see him acting hawkish, so more likely than not will cause some concerns for traders around the world. Because of this, it's very likely that we would see the market pullback, perhaps trying to test the 50-Day ema . Adding more fuel to the fire is the fact that the CPI numbers come out on Thursday, and that could be a major disappointment for traders out there. I believe now, there is a likely significant amount of selling pressure just above, as we see the 200-Day EMA above their offering a significant amount of resistance as well. After all, it is sitting right at the 4000 level, which obviously has a lot of psychology attached to it, and there is also a downtrend line that will come into the picture as well.Market Likely to go Lower
If we break down below the 50-Day EMA, then it's likely that we could go down to the 3800 level, possibly lower than that. The 3800 level is a significant support level and given that backup would be very negative indeed.
I think Jerome Powell will do whatever he can to cool the markets off again because quite frankly the employment numbers were no real reason to get excited.
Yes, wages only rose 3/10 of a percent instead of 4/10 of a percent last month, but that's hardly reason enough to have the Federal Reserve change in its overall tune. Furthermore, we are heading towards a recession and although Wall Street thinks that the federal reserve is going to do everything it can to save Wall Street, I don't think it could do so this time, because inflation is just simply too hot. Yes, it is slowing down but quite frankly there's no way that they can start printing money again, without making inflation get even worse than it was before. We need to deflate the bubble.
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