Fundamental Analysis:
Next week, economic reports will play a key role in governing the move of market.
With a lot of reports is released, the economic picture of US might be more clearer and this will affect FED decision.
I analyse S&P500 index to give evlaluation for FOREX.
This is important economic reports for S&P500 next week:
- ISM Non-manufacturing PMI on Monday
- FED Chairman Nomination Vote on Monday
- ADP report on Wednesday
- FOMC Minutes on Wednesday.
- NFP report on Friday
- Unemployment Change on Friday
I consider each report step by step to give an overall view.
- ISM Non- Manufacturing PMI: I believe this report will be positive cause of good holiday shopping of US citizens.
- FED Chairman Nomination Vote: We knew exactly that Mrs. Yallen will be the new Chairman, so there is no new for this event. I ignore this event. However, I don't exclude market will react with this event.
- There is nothing new in FOMC Minutes on Wednesday. FED taper decision las December is the first step on the QE3 unwind road, and FED need time to evaluate the recovery of US, too early to continue taper , it may next Minutes in March, but I expect some less dovish comment from this Minutes, this will cause sell off SP500 and rally of USD.
- The most difficult forecast report is NFP. Usually, if ADP report is good , NFP report 80% is good.Economy of US is on the recovery road, the prospect is very positive. Most analysts believe NFP report will be very positive, but I don't think so. The Forecast for NFP is 194K, I think NFP will be lower this forecast. It will be higher 180K but lower 194K. If NFP is below 180K, that is the big problem, it proves that the recovery of US economy meets lot of difficulties, but I think It will be above 180K.
- Unemployment Rate unchange : 7%.
If I choose the stance is bullish for USD, the move of S&P500 will be downside: Bearish.
Technical Analysis:
I show on chart, the engulfing candlestick. This is the signal of reversal pattern.
The support level is 1811.90. This is also an old key resistance level,S&P500 fought to extend above this level. I think S&P500 will try to test this suppot this week.
S&P500 is now overvalue, it needs a correction. Now this is the time for its correction.
1811.90 is also 161.8% FIB extension. Thus, this is a strong support. S&P500 will be trade above this level.
In conclusion, SHORT S&P500 to 1811.90 level next week.
Next week, economic reports will play a key role in governing the move of market.
With a lot of reports is released, the economic picture of US might be more clearer and this will affect FED decision.
I analyse S&P500 index to give evlaluation for FOREX.
This is important economic reports for S&P500 next week:
- ISM Non-manufacturing PMI on Monday
- FED Chairman Nomination Vote on Monday
- ADP report on Wednesday
- FOMC Minutes on Wednesday.
- NFP report on Friday
- Unemployment Change on Friday
I consider each report step by step to give an overall view.
- ISM Non- Manufacturing PMI: I believe this report will be positive cause of good holiday shopping of US citizens.
- FED Chairman Nomination Vote: We knew exactly that Mrs. Yallen will be the new Chairman, so there is no new for this event. I ignore this event. However, I don't exclude market will react with this event.
- There is nothing new in FOMC Minutes on Wednesday. FED taper decision las December is the first step on the QE3 unwind road, and FED need time to evaluate the recovery of US, too early to continue taper , it may next Minutes in March, but I expect some less dovish comment from this Minutes, this will cause sell off SP500 and rally of USD.
- The most difficult forecast report is NFP. Usually, if ADP report is good , NFP report 80% is good.Economy of US is on the recovery road, the prospect is very positive. Most analysts believe NFP report will be very positive, but I don't think so. The Forecast for NFP is 194K, I think NFP will be lower this forecast. It will be higher 180K but lower 194K. If NFP is below 180K, that is the big problem, it proves that the recovery of US economy meets lot of difficulties, but I think It will be above 180K.
- Unemployment Rate unchange : 7%.
If I choose the stance is bullish for USD, the move of S&P500 will be downside: Bearish.
Technical Analysis:
I show on chart, the engulfing candlestick. This is the signal of reversal pattern.
The support level is 1811.90. This is also an old key resistance level,S&P500 fought to extend above this level. I think S&P500 will try to test this suppot this week.
S&P500 is now overvalue, it needs a correction. Now this is the time for its correction.
1811.90 is also 161.8% FIB extension. Thus, this is a strong support. S&P500 will be trade above this level.
In conclusion, SHORT S&P500 to 1811.90 level next week.