On the daily chart below, we can see that the ranging price action is still intact as the market in uncertain on the next move given the renewed fears of inflation caused by a blockbuster NFP report and a jump into expansion in the ISM Services PMI. The Fed Chair Powell has also hinted that strong labour market or inflation reports will cause the terminal rate to move higher. So, the market now doesn’t have much conviction on what’s next and the economic data will be key for trading. The best strategy would be to stay away until there’s a clear breakout supported by a fundamental reason.
On the 4 hour chart below, we can see more closely the range defined by the resistance at 34477 and the support at 33528. These will be the levels to watch for a breakout. In between it’s no man’s land and one can only “play the range”, that is buying at support and selling at resistance. The US CPI report tomorrow though is a big one and should give the market the momentum to break on either side. Watch out for that.
In the 1 hour chart below, we can see that right now there’s a possible upward move in the making. After bouncing from the support, the price pulled back to the recent swing at 33776 where we can also find the 38.2% Fibonacci retracement level and the red moving average. If we see a follow up to this upward movement, then we should see a move toward the 34200 price zone.
