The Dow Jones Industrial Average slipped during its recent trading at the intraday levels, to record losses for the fourth consecutive day, by -2.79%, to lose the index towards -876.05 points. It settled at the end of trading at the level of 30,516.75, after its decline during Friday’s trading by – 2.73%.

The stock market has now fallen to new lows for the year, which is in bear market territory, with a bear market defined as a drop of more than 20% away from the index’s highest peak.

This comes as markets anticipate more Fed rate hikes in the future, and the Fed was expected to raise rates by half a percentage point at each of its summer meetings. However, it is now expected to raise interest rates in September after the Central Bank’s meeting minutes indicated that slowing economic growth may force the Fed to slow the pace of rate hikes. Barclays economists now expect the Fed to raise the federal funds rate by three-quarters of a point at its next meeting.

The index incurred those losses after Friday’s inflation reading showed that the consumer price index rose 8.6% on an annual basis in May, higher than the previous reading of 8.3%. Contributing to this was the rise in the prices of services such as hotel and airline prices, as well as oil and food. Now it seems that the Fed has no choice but to remain firm in raising interest rates.

Technically, the index faces a number of negative pressures, which led it to deepen its losses at the beginning of the week’s trading. The dominant trend is the short-term bearish corrective trend along a slope line, with the continuation of the negative pressure for its trading below the simple moving average for the previous 50 days. Negative signs on the relative strength indicators, as the index crossed in its last sessions the main support level 31,000.

Therefore, our expectations indicate that the index will continue to decline during its upcoming trading, especially throughout its stability below the 31,000 level, to target the important support level 29,500.

Today’s recommendation on the lira against the dollar

Risk 0.50%.

The sell trade on the recommendation was activated yesterday, and it reached the stop loss point

Best entry points buy

• Entering a long position with a pending order from 16.00 . levels
• Set a stop-loss point to close the lowest support levels 15.85.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the strong resistance levels at 16.85.

Best selling entry points

• Entering a short position with a pending order from levels 15.00
• The best points for setting stop-loss are closing the highest levels of 15.11.
• Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.
• Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the support levels 14.58

The Turkish lira’s trading collapsed against the US dollar after a report issued by the Central Bank of Turkey, which showed poor expectations for inflation and the price of the lira by the end of this year. Updates issued by the Central Bank of Turkey showed a decline in inflation from the current rate of 70 percent, to record levels of 57.92 percent. The bank also revised its previous forecast for the price of the lira against the dollar, as it showed a greater decline for the lira by the end of the year, to record 17.57, compared to previous expectations that showed the lira’s stability at 16.85 levels. The new expectations seem more realistic for what is happening in the market, especially with the Turkish Central Bank’s adherence to a stimulus monetary policy while refusing to raise interest rates. The Turkish Central Bank also faces an obstacle represented in the exhaustion of available solutions to control the falling lira rate, especially with the return of the real cash reserve with the bank.

On the technical front, the Turkish lira continues to decline strongly against the dollar, as the lira prices breached the levels of psychological resistance that is concentrated at 16.00 levels. The pair is also trading above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame. At the same time, the pair is trading above the support levels that are concentrated at 16.00 and 15.85 levels, respectively. On the other hand, the lira is trading below the resistance levels at 16.40 and 17.00. As the pair’s upward momentum continues, the way seems open for the lira to reach 16.63 levels, which it recorded at the end of last year, as it is the first major resistance level before continuing to rise. Please adhere to the numbers in the recommendation with the need to maintain capital management.

Today’s recommendation on the lira against the dollar

– Risk 0.50%.

Yesterday’s sell recommendation was activated and it is still trading

Best entry points buy

Entering a long position with a pending order from 15.29 . levels

– Set a stop loss point to close the lowest support levels 15.15.

– Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.

– Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the strong resistance levels at 15.05.

Best selling entry points

Entering a short position with a pending order from 16.00 . levels

– The best points for setting the stop loss are closing the highest levels of 16.11.

– Move the stop loss to the entry area and continue to profit as the price moves by 50 pips.

Close half of the contracts with a profit equal to 75 pips and leave the rest of the contracts until the support levels 15.58

The Turkish lira continued its free fall against the dollar, as it fell for the third day in a row. Reports issued at the end of last week showed that the lira is declining under the supervision of the Turkish Central Bank, which no longer has many tools to limit the lira’s decline, especially with the continuous rise of the US dollar after reaching its highest level in twenty years during last week’s trading. In the meantime, many of the decisions adopted by Turkish President Recep Tayyip Erdogan did not succeed in stabilizing the price of the lira against the dollar, especially with the Turkish president’s insistence on reducing the interest rate despite the international central banks keeping pace with the Federal Reserve in raising the interest rate. It is noteworthy that a report published via Reuters showed the distress that the Turkish Central Bank is experiencing in the volume of hard currency reserves, which leads to the exclusion of the Central Bank’s direct intervention by pumping more dollars into the markets.

On the technical front, the Turkish lira fell against the dollar during today’s early trading, as the pair continued to rise above the moving averages 50, 100 and 200, respectively, on the four-hour time frame as well as on the 60-minute time frame. At the same time. The pair is also trading the highest support levels, which are concentrated at 16.30 and 15.10 levels, respectively. On the other hand, the lira is trading below the resistance levels at 16.00 and 16.40. At the moment, the pair has crossed 15.29 levels, which represents the 61 Fibonacci level of the descending wave that recorded its top on 12-12-2021 and recorded its bottom on 12-23-2021. If the pound’s current decline continues, the way is open to reach 16.63 levels, which it recorded at the end of last year, as it is the first major resistance level. Please adhere to the numbers in the recommendation with the need to maintain capital management.

Last Friday’s session was harsh for the price performance of the GBP/USD currency pair, as the currency pair fell from the resistance level 1.3034 to the 1.2823 support level. This is its lowest since September 2020, losing more than 200 points in one trading session. The decline came after UK economic data forced financial markets to reconsider the outlook for the Bank of England. The British pound was the biggest long-term loser on Friday after data from the Office for National Statistics (ONS) revealed a sharp decline in the volume and value of UK retail sales for the past month in a strong indication that lower household income is now hampering total income.

UK retail sales fell -1.4%, much more than economists had expected, making it their biggest drop in one month for nearly a year. This is a result that came as a huge blow to the recently pumped pound on the back of very ambitious market expectations for an interest rate from the Bank of England.  Commenting on this, Bethany Beckett, an economist at Capital Economics, said: “The significant drop in retail sales in March marks the second consecutive month of decline and adds to the evidence that real wage pressures are hurting consumer spending.”

“With CPI inflation already at a 30-year high and set to continue rising, there is a real risk of a direct decline in consumer spending in the coming quarters,” Beckett also said in a review of the data.

Stephen Gallo, FX Analyst at BMO Capital Markets says, “The position of the 2-year GBP/USD swap spread for cable suggests that the drop in spot is a bit exaggerated (in the near term), but we believe the trend in sterling based on fundamentals is the right direction.” “We prefer the sell side of the GBPUSD, especially on rallies above 1.30,” he added.

The pound rose in the previous session after financial markets concluded, perhaps incorrectly, that Bank of England policymaker Catherine Mann was suggesting in a speech on Thursday that she might vote for a massive 0.5% increase that would raise the bank rate from 0.75%. to 1.25% in May. MPC member Mann cited “extremely strong sales and price expectations” from large companies participating in the Bank of England surveys and the possibility of higher payrolls for the workforce to anticipate the continuing risks of a prolonged period of above-target inflation on Thursday.

According to the performance of the forex market, warns Kit Juckes, FX analyst at Societe Generale, “It now appears that 1.30 GBP/USD has broken decisively and a realistic 1.25 target. GBP/USD is likely to match any decline in EUR/USD that comes as a result of concerns about gas supplies to Europe and the state of war in Ukraine.”

“Monetary policy needs to keep inflation expectations steady; By doing this now, further tightening will be needed later, when demand is still weak,” he said. Mann suggested that if these sales and price expectations actually come true and “if the impact on aggregate demand of the energy price shock is more modest than currently expected”, the BoE is likely to raise interest rates sharply in the coming months.

However, the retail spending data for March may have ruled that out.

Friday’s IHS Market survey of large service-oriented firms also pointed to growing headwinds in the UK’s largest economic sector. “This really reiterates what we said in the February monetary policy report and the March MPC meeting minutes, you know, we are now walking a very fine line between addressing Inflation and the production effects of the real income shock and risks that may lead to a “recession”.

The pound-dollar exchange rate reached its lowest level since September 2020 in the wake of Friday’s data and was quickly approaching a key level of technical support on the charts. Robert Wood, UK economist at BofA Global Research, says: “We estimate consumer confidence to have a 35% chance of a recession. However, company surveys are stronger.”

The strong dollar added to the pound’s losses after Federal Reserve Chairman Jerome Powell said at the last meeting of the International Monetary Fund and the World Bank Group last Thursday that a higher-than-usual rate hike is now on the table in the US next month.

While financial markets were already pricing in a 0.50% rise in the fed funds rate, from 0.5% to 1%, the dollar was still broadly ahead overnight and into the last session of the week’s trading.

According to the technical analysis of the currency pair: In the near term and according to the performance of the hourly chart, it appears that the GBP/USD currency pair is trading within the formation of a sharp descending channel. This indicates a strong short-term bearish momentum in the market sentiment. Therefore, the bulls – are targeting potential recovery profits at around 1.2863 or higher at 1.2908.