ATFX: The U.S. stock market is now in a short-term top building structure, and the rise of gold has slowed slightly

11The Dow Jones index has been around34000The point fluctuates up and down, and the breakdown is weak35000Pass, and continue to stick to it33000Support position, and finally form a daily line level short cycle roof building structure.

Previously, due to the inflection point of high inflation in the United States, the expectation of the Federal Reserve's radical interest rate increase cooled down, and the Dow Jones index rose sharply for nearly two months. There is a strong sense of optimism in the market, and the Dow Jones Index is likely to hit a new record high. However, the current roof structure may lead to a certain degree of retracement. It is expected that12month15Support will only be found when the Federal Reserve decides on interest rates next Thursday.

The interest rate resolution of the Bank of Canada can serve as a reference.12month7On the day of, the Bank of Canada decided to raise interest rates50Base point, increase the terminal interest rate to4.25%。 Prior to this, the widely expected rate hike in the market was only25Basis points, lower than the previous interest rate hikes, as Canada'sCPIThe growth rate has shown a significant turning point. The emergence of unexpected interest rate hikes indicates that the market is overly optimistic about the views of central banks in various countries on adjusting monetary policies.

If the Federal Reserve were to12The monthly interest rate hike is not expected by the market50The base point is a continuation75The radical magnitude of the basis point (with a low probability) will greatly boost the US dollar index. The trend of the Dow Jones index well reflects this concern, with a state of high volatility being the best state before the expected landing.

goldThe trend is also worth pondering.11month3Solstice11month15Japan is a period of sharp increase in international gold prices,11month15In the future, although gold prices are still on the rise, the pace of their rise has significantly slowed down. This is similar to the high volatility trend of US stocks.

Gold has a hedging attribute, and without sudden geopolitical issues, this hedging mainly aims to avoid the risks of monetary policy. The Federal Reserve's aggressive interest rate hike will continue to weaken gold, as monetary policy tends to tighten and there is a possibility of a decrease in the circulating US dollar. The Federal Reserve has temporarily postponed the pace of interest rate hikes, and gold will gain upward momentum, as confirmed by the recent trend of gold prices in over a month. At present, the slowdown in the rise of gold indicates that the market's expectations for the Federal Reserve to temporarily postpone aggressive interest rate hikes have weakened. This conclusion is consistent with the issues reflected by the trend of US stocks.

It should be noted that the rise of the Dow Jones and gold was only briefly hindered, and the mid-term upward trend of the two has not changed.11The minutes of the monthly Federal Reserve meeting clearly mentioned that interest rates have been raised four times in a row75After a few basis points, the pace of interest rate hikes should be slowed down. If we continue to75A percentage point increase in interest rates will increase the risk of instability or chaos in the financial system. Based on this statement, the Federal Reserve raised interest rates this month50The probability of a basis point remains very high, and the US dollar index still has strong downward momentum. The Bank of Canada's unexpected interest rate hike has its particularity and may not necessarily repeat itself in the case of the Federal Reserve.

ATFXOverall view of the analyst team: From a technical perspective, there is a short-term pullback demand for the Dow Jones index and gold.

*Risk Tips and Disclaimers*
There are risks in the market and investment should be cautious. The above contents only represent the views of analysts and do not constitute any operational recommendations.
2022-12-09