S&P index trades near unchanged on the day. The 100 DMA/50% held support this week.

The S&P index is trading nearer the low for the day and currently near unchanged on the day. The high for the day took the index up 33.34 points. The low took the index down -10.57 points. The current price is at 3945.85 that is down -0.70 points or -0.02%.

Looking at the daily chart, the low price reached 3906.54 on Thursday and at the low the index tested the 100 day MA at 3908.80. The 50% of the move down from the August high was also in the area at 3908.40.

Buyers stalled the fall. Holding that MA and midpoint level gives the buyers hope. It also increases the 100 day MA/midpoint levels importance going forward. Stay above is more bullish. Move below and the technical picture deteriorates.

Staying on the day chart, the 61.8% of the move down from the August high is at 4006.81 just above the natural resistance at 4000. The high earlier this week reached above both those levels reaching a high of 4028.84 on Tuesday before rotating back to the downside. Getting above the 4000 area, and stay above would have traders looking toward the 200 day MA which is at 4067.22 and moving lower. Recall back in August, the high stalled near that MA and started the run to the low for the year.

So if there is a theme this week, it is that the selling weathered the storm at the 100 day MA/50% retracement support. That is good news for the index as long as the technical levels can continue to hold.

For the week… the index is trading down -1.25%. At the high, the index was up 35.92 points from last Friday’s close. At the low, the index was down -86.38 points. The current price is down around 50 points.

/inflation
Inflation

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.

Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is measured by the level of the total money supply of a specific currency, for example the US dollar, which is constantly increasing. However, an increase in the money supply does not necessarily mean that there is inflation. What leads to inflation is a faster increase in the money supply in relation to the wealth produced (measured with GDP). As such, this generates pressure of demand on a supply that does not increase at the same rate. The consumer price index then increases, generating inflation.How Does Inflation Affect Forex?The level of inflation has a direct impact on the exchange rate between two currencies on several levels.This includes purchasing power parity, which attempts to compare different purchasing powers of each country according to the general price level. In doing so, this makes it possible to determine the country with the most expensive cost of living.The currency with the higher inflation rate consequently loses value and depreciates, while the currency with the lower inflation rate appreciates on the forex market.Interest rates are also impacted. Inflation rates that are too high push interest rates up, which has the effect of depreciating the currency on foreign exchange. Conversely, inflation that is too low (or deflation) pushes interest rates down, which has the effect of appreciating the currency on the forex market.
Read this Term