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The Week Ahead – Sentiment Shifts as the Fed Remains Hawkish

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The Nasdaq 100 retraces as AI stocks flourish
 The Nasdaq 100 retracing from record highs as AI stocks flourish, with a potential rebound towards 17700, targeting 18000 resistance.

The Nasdaq 100 saw a slide away from record highs as the Fed remains cautious about its monetary policy. However, with Nvidia jumping over 12% as revenues soar, this strong performance will significantly impact the index. A bullish outlook for the short term seems likely. The index shows signs of a potential rebound, driven by the robust performance of the tech sector. The index is heading to 17700, with 18000 as the closest resistance.

EURUSD begins the fightback
EURUSD chart: EURUSD testing resistance at 1.09 level amid a rebound against the dollar.

The euro regained some composure over the dollar after the multi-month bear rally. With falling energy prices, spring will begin with relief that Europe has dodged the recession bullet, unlike its UK counterpart. The latest PMI showed expansion in the eurozone, seen as a sign of justification. Markets expect that the ECB has confirmed its terminal rate and the Fed in its latest minutes. With more hawkish signals expected, we could see a complete rebound against the dollar. The pair tests the 1.09 level, with 1.08 being a fresh resistance.

AUDUSD looking for consolidation
AUDUSD chart: AUDUSD aiming for consolidation, eyeing resistance at 0.6850 with 0.6720 as the first hurdle.

The Australian dollar is back on the front foot after the greenback weakened across the board. Retail sales look to jump out of negative territory in the next reading, with the next rate decision remaining at 4.35%. The RBA has already signalled that they have hit their peak but did warn that inflation does remain high. Instead, it means that the fight against inflation is far from over, as prices of services were not falling quickly enough. Risk appetite could drive the Aussie higher towards 0.6850 with 0.6720 being the first hurdle.

UKOIL higher demand, higher prices
UKOIL chart: Brent crude testing yearly high at 84.00, with 81.60 serving as the initial support amid higher demand.

Brent crude edges higher as speculation over rising demand enters the conversation. Analysts are predicting Brent prices at $90 by the end of the year. OPEC+ supply cuts should begin in Q2 against tighter balances and higher prices. Meanwhile, the market barely reacted to Russia’s plan to trim exports from its western ports, which tells much about the bearish mood. The price is testing the yearly high at 84.00, with 81.60 being the first support.

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