Wall Street continues to bleed out on the back of hawkish Fed’s Powell.

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• Wall Street continues to bleed out on the back of hawkish Fed’s Powell.
• S&P 500 is making fresh lows for the day.

The pair currently trades last at 4116.19.

The previous day high was 4199.51 while the previous day low was 4145.75. The daily 38.2% Fib levels comes at 4178.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 4166.29, expected to provide resistance.

Stocks on Wall Street are bleeding out into the midday New York trade following Federal Reserve Chief Jerome Powell’s comments made in a speech to the Jackson Hole central banking conference in Wyoming. He suggested the central bank will keep raising interest rates to tame inflation. The US economy will need tight monetary policy “for some time” before inflation is under control, he said.

The Fed is very clearly dependent on data and Powell said that while the US economy is slowing, he argues that it still has strong underlying momentum. For instance, and crucially, Powell explained that while ”July’s lower inflation readings are ‘welcome’,” they are ”short of what will be needed before we are confident inflation is moving down.”

Investors were looking for clues as to whether the Fed was content with the less inflationary results in the data of late, but the speech from Powell shows little concrete evidence of that. In fact, he focused on not loosening policy too early but he didn’t mention going any further on a hawkish side.

He did say that ”as policy tightens further, it will be fitting to halt the pace of rate rises at some time,” however, that is somewhere over the horizon. Instead, he argues that ”restoring price stability will likely require maintaining a restrictive policy stance for ‘some time.”’ As a consequence, the Fed funds futures are showing odds of a 75bps hike in September now 56.5% vs 46.5% before Powell’s speech.

From the moments just before the release of Powell’s remarks at 1000 EDT, until now, the S&P 500 had fallen around 1.5%. It was roughly flat before the chairman’s remarks. The index is now down 1.9% and has printed a fresh low for the day of 4,106.45.

meanwhile, data earlier showed US consumer spending barely rose in July, but inflation eased considerably, which is yet another data input that could give the Fed room to scale back its aggressive interest rate increases.

Technical Levels: Supports and Resistances

EURUSD currently trading at 4116.19 at the time of writing. Pair opened at 4199.51 and is trading with a change of -1.98 % .

The pair is trading below its 20 Daily moving average @ 4185.92, above its 50 Daily moving average @ 3990.67 , above its 100 Daily moving average @ 4057.21 and below its 200 Daily moving average @ 4293.88

The previous day high was 4199.51 while the previous day low was 4145.75. The daily 38.2% Fib levels comes at 4178.97, expected to provide resistance. Similarly, the daily 61.8% fib level is at 4166.29, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 4163.67, 4127.83, 4109.91
• Pivot resistance is noted at 4217.43, 4235.35, 4271.19

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