By ForexTime
US stock markets cheered the US inflation data released yesterday (Wednesday, July 12th). The consumer price indexes out of the world’s largest economy came in below market expectations.
Such data has raised hopes that the Fed will soon call time on its rate hikes that began over a year ago, and the thought of peak US rates being close at hand was a cause for rejoicing for risk assets.
The WSt30_m index, which tracks the benchmark Dow Jones Industrial average index, joined in Wednesday’s party by posting its highest intraday price so far this year.
Tomorrow (Friday, July 14th), the US earnings season will unofficially kick off with the latest quarterly financial results out of Wall Street banking titans, namely JPMorgan, Citigroup, and Wells Fargo.
Free Reports:
Note that JPMorgan alone comprises almost 3% of the Dow Jones Industrial Average index (tracked by WSt30_m).
And the Dow index contains two banking heavyweights in the form of JPMorgan and also Goldman Sachs, which combined account for 9.1% of the benchmark index which tracks 30 industry leaders within the US economy.
With all that in mind, the WSt30_m index is set to be heavily influenced by how markets react to the latest earnings results out of JPMorgan and its peers over the coming days.
The WSt30_m index has been oscillating between a weekly support and resistance level since the beginning of June.
The battle between the bulls and bears has not been decided yet, but the bulls seem poised for a retest of the weekly resistance level that happened on 12 July.
This possible scenario is confirmed by the fact that the price is above the 15 and 34 Simple Moving Average with the Momentum Oscillator adding its weight as well when it broke above the 100-base line into bullish terrain.
If the bulls can drive the price above the weekly resistance level and specifically a critical resistance that formed on 12 July at 34627, then two possible targets become possible from there.
Attaching the Fibonacci tool to the top 34627 and dragging it to a bottom that formed on 26 June at 33631, the following potential targets can be established:
If the support level at 33631 is broken, this scenario is no longer valid and must be reassessed.
As long as bulls can keep up the momentum with demand overcoming supply, the market outlook for the WSt30_m index on the Daily time frame should have bullish potential.
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