Technical Analysis

The relief rally hits pause for now

That is helping to keep the dollar in a firmer spot as we look towards European trading. The mood isn’t helped by a pushback from Fed board member Waller here. And as mentioned at the end of last week, Fedspeak is pretty much the only thing that could dampen this relief rally in markets.

For now, this is keeping a lid on things with broader markets hitting the pause button and taking a break. However, the technicals still suggest that the market moves post-CPI may still have some room to run (or at least there is the potential).

10-year Treasury yields are up 7 bps to 3.898% currently but still keeping below the pivotal 4% mark. I would argue that the bond market will be a key spot to watch amid any Fedspeak as that will play into market pricing on the Fed and in turn, overall sentiment across other asset classes as well.

Meanwhile, equities are keeping in a good spot with the S&P 500 having climbed above its 100-day moving average (red line) last week:

That opens up a pocket of room to play with between that and key resistance closer to the 200-day moving average (blue line), now seen at 4,081 – all before the 12 September high just above 4,100.

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