A recent upward correction on US indices has been halted in mid-August 2022. Taking a look at US small-cap Russell 2000 index (US2000) at a daily interval, we can see that the index climbed above the upper limit of market geometry at the turn of July and August but a subsequent upward move failed to gather momentum. Reversal occurred in the 2,035 pts area in mid-August and US2000 has been pulling back since. The focus now is on the 1,900 pts support area that houses previous price reactions, 38.2% retracement of the post-pandemic upward move as well as the upper limit of the aforementioned market geometry. A break below could hint that the downtrend is about to resume.
A key driver for US equities is the Fed's monetary policy. On one hand, recent data suggests that pace of tightening may ease going forward and it would be positive for equity markets. On the other hand, Fed's Kashkari said last night that Fed will only be able to relax on rate hikes once evidence of deceleration in price growth emerges. Powell's speech at Jackson Hole this Friday may shed some more light on the outlook.
Source: xStation5
Daily summary: Oil slumps 8% supporting Wall Street, precious metals and EURUSD
US Open: Wall Street climbs higher driven by oil sell-off and technology stocks optimism 📈
Nasdaq 100 has risen 25% from its March 31 low 📈 What’s next?
Market Wrap: Axios reports drive European markets; Novo Nordisk the star of the day❓🚀
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
