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US equity indexes are mixed with the E-mini S&P 500 little changed, Nasdaq lower by about 0.1% and the Dow Jones up by about 0.1% as market participants await the non-farm payrolls data on Friday.

Cleveland Fed President Loretta Mester mentioned that interest rates will remain elevated and above 5% despite potential weakness in the economy. This should be a bearish factor to conclude in the equities.

Markets seem to expect an interest rate cut around July with a 46% probability, according to the CME’s FedWatch tool. The projection seems also to suggest a dovish tone with a series of cuts of the rate which let the market rise to this day.

Yesterday’s job opening fell lower than-expected below 10 million which points to some weakness in the economic structure due to the mentioned interest rate hikes. However, equities seemingly were pressured by the data by concerns of economic weakness and a recession.

The daily interval seems to establish a balanced price range after the mentioned outside bar which hints at a change in market context from trending higher to balanced by potential downside rotations back to the Year’s developing VWAP.

The dollar is slightly changed, hinting at a mixed behavior while the current weakness in the greenback might point to a supportive stance for the equities and commodities in the median-term perspective.

2 Months Ago

Technical resistance by long liquidations and possible core selling may emerge around the prior balanced price range and swing highs back from February.

Looking at the intraday perspective we can identify a prior session as a balanced profile structure that found core buying at the lower extreme, targeting the upper extreme. A potential higher dollar may lead to selling into the market around the current swing highs on the intraday perspective while core buyers eventually add to their long positions around the developing VWAP – the current mixed view tends to lead to possible rotational scenarios. 

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