Yesterday, concerning data was released from the U.S. GDP for Q1 contracted by 0.5% compared to the expected -0.2%. Core personal consumption expenditures (PCE) inflation for the same period rose from 2.6% to 3.5% (vs. forecast of 3.4%), real consumer spending increased only 0.5% against a forecast of 1.2%, and corporate profits declined by 3.3%.
The trade balance for May worsened from -$86.97 billion to -$96.59 billion. On the positive side, durable goods orders for May surged by 16.4%, well above the expected 8.6% gain, but the increase was largely skewed toward transportation. Undoubtedly, the Federal Reserve will consider this data when adjusting monetary policy.
As a result, investors have increased the probability of a rate cut at the July meeting to 21% and at the September meeting from 65.6% to 70.2% in a single day. The euro rose by 41 pips, but the S&P 500 also gained 0.80%, reflecting a sustained appetite for risk. This morning, S&P 500 futures hit a new all-time high. Is it time for markets to consider a reversal?
On the weekly chart, the euro is approaching the upper boundary of the price channel (1.1820). The Marlin oscillator now shows that hitting this target will not break the developing bearish divergence. Next week will be crucial in this regard.
On the daily chart, the price is trying to hold above the 1.1692 level, but the Marlin oscillator is slightly turning downward, which does not support this movement. The main support is the MACD line at 1.1590. A firm move below this line would signal a medium-term downward reversal.
On the four-hour chart, support from the MACD line coincides with the support from the higher timeframe (1.1590), which keeps the bulls’ positions relatively firm. The Marlin oscillator is ready to turn upward, and the price is rebounding from the 1.1692 level. However, today is Friday, which may lead to weekly profit-taking, so we do not expect the day to close with a white (bullish) candle.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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