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US Market Review 12th May 2021

May 12, 2021 (11:18)

by Elina Nikolova

The Dow registered new all-time highs on 10th May 2021 reaching as high as 35000 points. The price action since then failed to reach record highs, following suit with the majority of the global indices. The RSI (Relative Strength Indicator) indicator is trending above the 50 level, still in bullish area, but is pointing downwards which is a signal of weakness. Additionally the RSI registers consecutive lower tops as the price registers consecutive higher tops indicating another potential weakness of the price action. The price is trading above the lower channel line which provided support yesterday and so far in today’s session.
A break and close below the lower channel line may signal a reversal of the bullish trend. Important support levels at 33572 formed from previously consolidated bottoms, at 0.382 Fibonacci retracement level 33290 which coincides with the 50 Day Moving Average, and at 33124 level formed from a previous inside swing support level. Resistance level exists at the recent all-time high and psychological level of 35000.

• The US markets will be busy in terms of announcements today. The news announcements include CPI and Core CPI, followed Crude Inventory levels.

• U.S. stocks closed lower on Tuesday as rising commodity prices and labor shortages fed fears that despite reassurances from the U.S. Federal Reserve, near-term price spikes could translate into longer-term inflation.

• The International Energy Agency (IEA) said that demand for oil will exceed the output of top producers due to progress in vaccinating the world against COVID-19. New waves of infections in Brazil and Thailand and even India - the world's third-largest consumer suffering record-breaking cases - were not enough to derail the trend but could continue to affect the market, it added.

• At 12:30 (GMT) monthly Consumer Price Index (CPI) is expected to be announced. This report measures the change in the price of goods and services purchased by consumers. nflation is important to currency valuation because rising prices lead the central bank to raise interest rates.

• At 12:30 (GMT) monthly Core CPI is expected to be announced. This report measures the change in the price of goods and services purchased by consumers, excluding food and energy.

• At 14:30 (GMT) Crude Oil Inventories will be announced. This measures the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. A drop in held quantities is good for the instrument.

US Indices yesterday:

• Dow Jones -1.36%
• S&P 500 -0.87%
• Nasdaq -0.09%

Sources: Investing.com, Reuters, forexfactory.com

The original content of this Market Update is done in the English language. Any other language translation is provided for the sake of convenience. In case of any inconsistencies between the original English version and any other language, the original English version shall prevail.

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