US 30 analysis: the likelihood of a reversal to a downtrend increased after the inflation data release

The US 30 stock index significantly slowed its growth rate and will likely reverse into a downtrend. The US 30 forecast for next week is moderately negative.

US 30 forecast: key trading points

Fundamental analysis

The report’s inflation data shows that the CPI rose by 2.4% over the past 12 months, while analysts expected it to be 2.3%. The reading is slightly above the 2.0% inflation target set by the Federal Reserve.

Source: https://tradingeconomics.com/united-states/inflation-cpi

With inflation remaining close to the target and the interest rate already reduced by 0.5%, the regulator may slow the pace of further cuts. Despite soft lending conditions, 2.4% inflation combined with higher housing and food costs may raise concerns about consumer activity. If inflation falls without accompanying economic growth, investors may become more cautious.

Market participants will likely need additional clarification from Federal Reserve management about their assessment of inflation and unemployment data. The stock market will remain strong if the regulator does not change its rate-cut plans. Until then, investors will likely be uncertain. The US 30 index forecast is moderately negative.

US 30 technical analysis

The US 30 stock index has been trading below the 42,620.0 resistance level for over a week. According to the US 30 technical analysis, this indicates a decrease in the potential for further growth. The index is highly likely poised for a reversal into a downtrend. A breakout below the 41,840.0 support level will signal its beginning, with a decline target at 41,490.0.

The following scenarios are considered for the US 30 price forecast:

Summary

The report provides inflation data showing that the CPI rose by 2.4% over the past 12 months, while analysts expected it to be 2.3%. The US 30 stock index has been trading below the 42,620.0 resistance level for over a week and will likely reverse to a downtrend in the short term.