Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Final US S&P Global Manufacturing PMI for April is predicted at 50.4. Forex traders can compare this to the US S&P Global Manufacturing PMI for March, reported at 49.2.
US Construction Spending for March is predicted to rise 0.1% monthly. Forex traders can compare this to US Construction Spending for February, which contracted by 0.1% monthly.
The US ISM Manufacturing Index for April is predicted at 46.7, and ISM Prices Paid at 49.0. Forex traders can compare this to the US ISM Manufacturing Index for March, reported at 46.3, and ISM Prices Paid at 49.2. ISM Employment Index for April is predicted at 47.9. Forex traders can compare this to ISM Employment Index for March, reported at 46.9. ISM New Orders for April are predicted at 45.5. Forex traders can compare this to ISM New Orders for March, reported at 44.3.
The start of the May trading month will come on the back of lower trading volume as most major non-US markets across Asia, Europe, Africa, and Latin America are closed for Labor Day. In the US, the focus remains on earnings, guidance, and inflation while the economy continues to slow. Headline inflation came down due to the drop in energy prices, but core inflation, which excludes food and energy, remains sticky. Both are well above the US Federal Reserve upper limit of 2.00%. Hopes for a pause in monetary tightening helped the Dow Jones 30 index move higher, but the Fed is likely to deliver at least one more 25 basis point hike before considering a pause for the rest of 2023.
The forecast for the Dow Jones 30 index turned cautiously bearish after this equity index jumped into the lower band of its horizontal resistance area over the past two trading sessions. Volatility could increase with the Tenkan-sen drifting lower while the Kijun-sen moves higher. The Senkou Span A and the Senkou Span B of the Ichimoku Kinko Hyo Cloud have flatlined following a bullish crossover, which could reverse and grant bears the upper hand. Traders should also monitor the CCI in extreme overbought territory. It could form a lower high before reversing its recent advance. A breakdown below 100 may offer the spark to contract price action, and a move below zero could accelerate the expected sell-off. Can bears wrestle control from bulls over the Dow Jones 30 index and force price action into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the Dow Jones 30 Index remain inside the or breakdown below the 33,960 to 34,260 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 34.110
- Take Profit Zone: 32.770 – 32.960
- Stop Loss Level: 34.510
Should price action for the Dow Jones 30 Index breakout above 34,260, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 34.510
- Take Profit Zone: 34.810 – 34.945
- Stop Loss Level: 34.260
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