Source: PaxForex Premium Analytics Portal, Fundamental Insight
US Preliminary Wholesale Inventories for March are predicted to decrease by 0.4% monthly. Forex traders can compare this to US Wholesale Inventories for February, which increased by 0.5% monthly.
US Crude Oil Inventories Change for the week ending May 3rd are predicted to drop by 1.430M. Traders can compare this to US Crude Oil Inventories Change for the week ending April 26th, which surged by 7.265M. US Gasoline Inventories Change for the week ending May 3rd are predicted to decrease by 1.180M, and US Distillate Stocks Change to drop by 1.000M. Traders can compare this to US Gasoline Inventories Change for the week ending April 26th, which expanded by 0.344M, and US Distillate Stocks Change, which decreased by 0.732M.
Yesterday’s US economic data pointed towards a sharp slowdown. The US IBD/TIPP Economic Optimism Index for May decreased to 41.8. Economists predicted a reading of 44.1. Forex traders can compare this to the US IBD/TIPP Economic Optimism Index for April, reported at 43.2.
The most worrying sign for the US economy came from the consumer credit report for March, which came in at $6.27B. Economists predicted a reading of $14.80B. Forex traders can compare this to the US consumer credit report for April, reported at $15.02B.
Will the old Wall Street saying “Sell in May, and go away” come true again in 2024? Economic indicators suggest downside pressures continue increasing, with inflationary pressure moving higher. The conditions for stagflation rise, but many investors cheer one lower-than-expected NFP report as a sign that the US Fed will cut interest rates. This hope-fueled reversal rally is a bull trap in a slowly unfolding bear market that could drop US financial markets 20% to 40% before year-end.
The forecast for the S&P500 turned cautiously bearish after this equity index recovered from its horizontal support area into its horizontal resistance area. Volatility could increase after the ascending Tenkan-sen has completed a bullish crossover above the downward-shifting Kijun-sen. It contrasts with a bearish crossover in the Ichimoku Kinko Hyo Cloud, completed after the descending Senkou Span A moved below flat Senkou Span B. Traders should also monitor the CCI in extreme overbought territory after forming a lower high. A breakdown below 100 could spark the next leg lower, as this technical indicator has plenty of downside potential.
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Should price action for the SP500 Index remain inside the or breakdown below the 5,165 to 5,215 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 5.190
- Take Profit Zone: 4.920 – 4.970
- Stop Loss Level: 5.255
Should price action for the SP500 Index breakout above 5,215, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 5.255
- Take Profit Zone: 5.28 – 5.335
- Stop Loss Level: 5.215
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