Source: PaxForex Premium Analytics Portal, Fundamental Insight
US Final Building Permits for August are predicted to rise 6.9% monthly to 1,543K permits. Forex traders can compare this to US Building Permits for July, which increased by 0.1% monthly to 1,443K permits.
The US House Price Index for July is predicted to increase by 0.5% monthly. Forex traders can compare this to the US House Price Index for June, which rose by 0.3% monthly.
The US S&P/Case-Shiller Composite 20 for July is predicted to contract by 0.30% annualized. Forex traders can compare this to the US S&P/Case-Shiller Composite 20 for June, which decreased by 1.20% annualized.
US Consumer Confidence for September is predicted at 105.5. Forex traders can compare this to US Consumer Confidence for August, reported at 106.1.
US New Home Sales for August are predicted at 700K new homes. Forex traders can compare this to US New Home Sales for July, reported at 714K new homes.
The US Richmond Fed Manufacturing Index for September is predicted at -6. Forex traders can compare this to the US Richmond Fed Manufacturing Index for August, reported at -7.
Global equity markets have been under selling pressure as market participants begin to understand that central banks may near peak interest rates but that interest rates will remain higher for longer. The risk of stagflation has increased as inflationary pressures from commodities and wages place upward pressure on inflation. Consumers have further increased their record debt pile, and credit card debt topped $1 trillion, with delinquencies rising. Regional reports continue to point toward a slowdown, and the US government is days away from another default deadline, ushering in another government shutdown embarrassingly. The path of least resistance is to the downside, and the S&P500 could challenge the 4,000 level in October.
The forecast for the S&P500 remains bearish, with this equity index gathering bearish momentum. Following a bearish crossover, the Tenkan-sen and the Kijun-sen have temporarily flatlined, but the downtrend remains intact. The Ichimoku Kinko Hyo Cloud narrowed and lost upside momentum, settling for a lower high, which suggests more downside pressure. Traders should also monitor the CCI in extreme oversold territory. A false breakout could precede the next leg lower, as this technical indicator should remain well below the zero barrier with plenty of downside potential. Can bears maintain control over the S&P500 and force price action into its horizontal support area, which includes the psychologically important 4,000 level? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the SP500 Index remain inside the or breakdown below the 4,285 to 4,355 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 4.310
- Take Profit Zone: 4.000 – 4.075
- Stop Loss Level: 4.415
Should price action for the SP500 Index breakout above 4,355, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 4.415
- Take Profit Zone: 4.515 – 4.540
- Stop Loss Level: 4.355
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