The Week Ahead – Fed Disruption, NASDAQ 100 in Focus
NASDAQ 100 retreats as CPI looms
The Nasdaq 100 continues to go from strength to strength as it ignores the Fed’s signals. While Jerome Powell’s moderate rhetoric has given the market the greenlight, a series of hawkish comments from his colleagues threw economists into a bit of panic as the higher for longer stance looks to continue. The next CPI will be a major market mover as a confirmed pause in rate action would fuel risk-taking in equity markets. 18000 is the next hurdle, and 18250 is a fresh resistance.
The Japanese yen remains pressured by the dollar as markets expect a dip in the upcoming GDP results. Buyers are now firmly in the market as prices test this year’s high towards the level as 150.00 becomes the next target. With the BoJ confirming that rate hikes are not in their plans, the dovish tone has sent the Yen into freefall across the board. With Japan’s interest rate still in negative territory, this could lead to a breakout. Consequently, November’s top of 152.00 may come into range.
With the Euro dropping over 300 pips since the start of the year, it’s easy to see why bears remain in the market. However, parity is a long way off for now. Yet another drop could see bulls step in to counteract the fall. This week’s employment rate across the eurozone is the key metric to pay attention to as a decent reading would alleviate fears of recession. 1.0600 is a key support, with 1.0555 as the next target.
The pound bounces as the market focuses on Britain’s CPI. The Bank of England hinted that interest rates have peaked as they look to follow the Fed in reaching their terminal rate. This week’s solid readings in employment and inflation data would tilt the balance in the hawks’ favour. The improved risk environment could boost the pound against the ever increasingly buoyant dollar. Cable is currently testing 1.26 with 1.2665 on the radar.
Test your forex and CFD trading strategy with Orbex