• US stock futures inched higher ahead of inflation data and the upcoming Federal Reserve policy meeting.

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• Last week, major indexes saw modest gains, with broader sector participation outside of technology stocks.
• Investors anticipate signs of easing inflationary pressures, potentially supporting a pause in interest rate hikes.
• The dollar index stabilized as investors prepared for key economic data and central bank decisions.
• Market sentiment is divided on whether the Federal Reserve will hold rates steady or resume tightening in July.
• European Central Bank and Bank of Japan also set to announce monetary policy decisions.

In the early European trading session, the E-mini S&P 500 has shown a 0.3% increase, with the market testing previous swing highs for potential selling opportunities and targeting higher levels for absorption purposes. However, mixed signs and calculations suggest the possibility of the market establishing a balanced price range during this session.

The presence of a higher dollar adds pressure, combined with positive volatility that may lead to a potential pullback, depending on the overall sentiment of market participants.

In the median-term perspective, indications are mixed, pointing to a potential balanced market behavior for the day, with the negative volatility providing support.

As investors prepare for the upcoming rollover to the September contract, pricing for various contracts reflects a potential bullish sentiment for the front-month contract.

Previous volume profiles indicate a balanced structure, prompting investors to lean on extremes to conclude rotational scenarios until an imbalance potentially drives prices higher.

By analyzing the TPO profile, a low price structure within the lower price range of the prior profile becomes evident, which could be a target. Market participants may choose to await a market ‘shake’ towards extremes to assess potential scenarios with higher probabilities, particularly at the beginning of the week.

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