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• US stock futures traded flat on Wednesday, pausing after a decline in the previous session, as the market took a breather from last week’s rally.
• Investors awaited comments from Federal Reserve officials, particularly Fed Chair Jerome Powell’s testimony before Congress, for further insights into the central bank’s future actions.
• Housing starts and building permits exceeded expectations, with a notable surge in May, while the dollar index stabilized around 102.5.
• The market awaited guidance from Fed officials on the rate path, with expectations of a 25 basis point rate hike in July and a pause thereafter.
• The Federal Reserve’s latest report to Congress highlighted that inflation in key sectors of the US services industry remained elevated and showed no signs of easing.

The E-mini S&P 500 is experiencing minimal changes, trading slightly lower by approximately 0.1% for the second consecutive day. The current market bias appears mixed, with negative volatility indicating a potential upside in this session. In the median-term perspective, the outlook remains uncertain, accompanied by negative volatility, which could be interpreted as a bullish sign for the market, potentially leading to a balanced behavior where traders rely on extreme levels to determine rotational scenarios. As investors adjust the risk profile of their core positions through the contracts, the recent rollover from the previous week could contribute to bearish rotations.

The volume profile from the prior day closed with a double distribution structure, indicating the presence of potential supportive buyers around the low volume area. Furthermore, this area aligns with the previous lower value close extreme of the VWAP, increasing the likelihood of absorption around the swing lows. Notably, buyers may find the Point of Control (POC) level within the lower distribution particularly interesting.

From a short-term perspective, the market exhibits an imbalanced condition favoring the downside, with a focus on targeting the swing highs for potential absorption opportunities and potentially adding to core short positions.

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