Cleveland Fed President Hammack: Action May Be Taken Soon to Combat Inflation

The Cleveland Fed President's indication that steps could be taken soon to combat inflation may strengthen market expectations of an interest rate hike. This is generally a negative signal for equity markets. Technically, the RSI at 66.5 suggests the index is approaching overbought territory, indicating potential for a short-term correction. The MACD having just crossed below its signal line also points to weakening momentum. Therefore, a downward movement in the index can be expected in the near term.

Hawkish Fed rhetoric could suppress risk appetite in the short term, creating selling pressure on the NDX. The RSI at 71.8, in overbought territory, suggests the current rally is fragile and vulnerable to a potential correction. The MACD's recent crossover below its signal line indicates weakening momentum. However, price action above the SMA20 and SMA50 shows that the medium-term trend remains strong, which could limit the downside. Therefore, a slight decline is expected in the short term.

Hammack's statement that steps could be taken soon to combat inflation has strengthened expectations of an interest rate hike, potentially putting short-term pressure on the DXY. Technically, the RSI is weak at 44, the MACD is below the signal line, and the price is trading below both the 20-day and 50-day moving averages. The 0.28% decline in the last 24 hours also confirms the current weakness. However, while rate hike expectations generally support the dollar, the impact of this news may be limited, as the market may have already priced in this rhetoric.