Four Charts to Watch Pre-Fed: S&P 500, DXY, UST-Bund Spread, Oil

  • U.S. stocks, oil may rise, U.S. dollar index stays bearish
  • Spread between U.S. Treasuries, bunds may tighten further

U.S. stocks may bounce higher, the U.S. dollar index could maintain a bearish trend, the spread between U.S. Treasuries and German bunds may tighten further and oil could bounce, according to four charts showing near-term technical bias ahead of the U.S. Federal Reserve’s policy decision. Here are four charts showing the potential moves.

S&P 500: Short-term Trend Bias Turns Bullish

Sustains a bounce from 50% retracement line at 1994 with recovery in line with bullish seasonal bias from mid-Dec.
Sustains a bounce from 50% retracement line at 1994 with recovery in line with bullish seasonal bias from mid-Dec.

DXY Index: Short-term Trend Bearish

Bullish key day reversal appears on charts; 21-day exponential MA slants downward and MACD positioned below zero line
Bullish key day reversal appears on charts; 21-day exponential MA slants downward and MACD positioned below zero line

UST-Bund Spread: Further Tightening

Spread has been narrowing since late November, pausing near 200-daily moving average and Ichimoku cloud base.

Rising 21-DMA, positive MACD and positive Bloomberg trender favor ongoing spread compression
Rising 21-DMA, positive MACD and positive Bloomberg trender favor ongoing spread compression

WTI Generic Contract: Cautiously Bullish

Sustains bounce from 2015 channel base near $35; daily slow-stochastics turns bullish
Sustains bounce from 2015 channel base near $35; daily slow-stochastics turns bullish

NOTE: Sejul Gokal is a Technical Strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.

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