- U.S. stock indexes plunged on Tuesday after Fed Chair Jerome Powell told Congress the central bank will likely need to raise interest rates more than previously expected as it seeks to rein in stubbornly high inflation.
- Powell, who will testify again on Wednesday before the House of Representatives Financial Services Committee, also added that the Fed would not consider changing its 2% inflation target and the job market does not suggest an economic downturn is close. Data of nonfarm payroll additions for February will also be closely watched.
- China saw its exports fall by 6.8% in February, declining less than expectations of a 9.4% drop, according to economists surveyed by Reuters. The drop was also less than the previous month’s fall of 9.9%.
- Asian markets were mixed on Wednesday morning as traders looked ahead to Fed Chair Jerome Powell’s congressional testimony on Tuesday and Wednesday, which will inform the central bank’s next moves on its rate-hiking decision. Hang Seng index slid 535 points while Nikkei 225 index rose 61 points.
- The Reserve Bank of Australia raised its cash rate by 25 basis points to carry the risk of plunging the economy into a recession. Commonwealth Bank of Australia’s Gareth Aird expected one further 25bp rate hike to be delivered at the April Board meeting, for a peak in the cash rate of 3.85%.
Dow Jones Index
(CFD Symbol: US30)
Price plunged below the 20EMA last night with a huge bearish candle after being resisted by the Fibonacci 50% correction point. We could see price testing its support zone at 32,485 again. Stochastic is weak and MACD is bearish.
Wait for better trading idea
(CFD Symbol: GER40)
This index created a new high at 15,706 yesterday before closing with a bearish candle. We could see price moving lower to its support zone at 15,180. Stochastic could be falling soon. MACD is bullish but has been giving divergence warnings.
Wait for better trading idea.
Nasdaq 100 Index
(CFD Symbol: USTec)
Recommendation: Short @ 12,120
Target price: 11,750
Protective stop: 12,300 Triggered
Price fell sharply following a shooting star candlestick pattern last night after being capped by the Fibonacci 62% correction point. Stochastic is weak and MACD is bearish. We could see price testing 11,230 if it violates 11,800.
Sell 12,120 for 11,750 with a stop above 12,300. Entry and stop was triggered on 6 Mar.
FTSE 100 Index
(CFD Symbol: UK100)
This index could have formed a potential head and shoulder reversal chart pattern. It is currently testing its key neckline and once this neckline is broken, we are likely to see price moving lower to 7616. Stochastic is weak and MACD is moving lower.
Sell 7915 for 7835 with a stop above 7970