Mon, Nov 29, 2021 @ 11:45 GMT
HomeContributorsFundamental AnalysisNasdaq Rises Shrugging Off Inflation Worries

Nasdaq Rises Shrugging Off Inflation Worries

Nasdaq and the S&P 500 rose reaching new record highs as the market shrug off inflation worries with the week’s opening, while Dow Jones edged lower as also did the USD against a basket of its counterparts, while gold dropped as US yields inched a bit higher on Monday. On the fundamental side we maintain our worries for the tensions in the US-Sino relationships which seem to have escalated further after the NATO summit at which US President Biden urged NATO to stand up to China, while China stated that it will not remain idle if challenged. On the monetary front, the Fed’s meeting tomorrow monopolises the interest of the markets with the main point of focus being on any clues regarding the possible tapering of the bank’s QE program. Today we highlight the US financial releases, which could move the markets and increase volatility also for US stockmarkets as well as Forex.

Nasdaq rose yesterday breaking the 14080 (S1) resistance line, now turned to support. We maintain our bullish outlook for the index as long as the upward trendline incepted since the 7th of June, continues to guide it. Please note though that the RSI indicator below our 1 hour chart has surpassed the reading of 70 which on the one hand confirms the dominance of the bulls, yet on the other may imply a rather overbought instrument. Please note that the index has reached new all-time high levels which may ease the appetite of the bulls. Should the bulls actually maintain control over the index’s direction, we may see it aiming if not breaching the 14270 (R1) resistance level. Should market decide that a correction lower is in order and the bears take over, we may see Nasdaq breaking the 14080 (S1) support line and aim for the 13915 (S2) level.

Cable remains stable despite UK reopening being postponed

The pound maintained its ground against the USD and the EUR, while had some slight gains against safe havens CHF and JPY yesterday. On the fundamental side, the postponement of the full reopening of the UK economy by four weeks, due to risks posed by the pandemic may weigh on the pound somewhat, yet the markets seem to saw through it, that it does not reverse the improvement of UK’s economic outlook. On the monetary front, we would highlight the speech of BoE Governor Bailey today and should he express some optimism we may see the pound getting some support. As for financial releases we would highlight the UK employment data due out today which could also provide some support for the pound, yet please note that more data are to follow also in the following days.

Cable maintained a tight sideways motion just below the 1.4145 (R1) resistance line yesterday. We tend to maintain our bias for a rangebound movement around the 1.4145 (R1) resistance line, yet we highlight the slight bearish tendencies as the pair’s price action seem to be forming slightly lower peaks and troughs. The RSI indicator below our 4-hour chart remains just below the reading of 50, also providing little help regarding the direction of the pair’s next leg. If a selling interest be displayed by the market for cable, we may see it breaking the 1.3990 (S1) support line and aim for lower grounds. Should buyers be in charge of the pair’s direction we may see it breaking the 1.4145 (R1) resistance line and aim for the 1.4275 (R2) resistance level.

Other economic highlights today and the following Asian session:

Today during the European session, we note the release of Germany’s and France’s final HICP rates for May and we highlight UK’s employment data for April. In the American session, we get from Canada the number of House starts for May and from the US the NY Fed Manufacturing for June, the PPI Final Demand rate for May, the Retail Sales for May, the Industrial Production for May and later the API weekly crude oil stocks figure. During Wednesday’s Asian session, we get New Zealand’s Current account balance for Q1 and from Japan the machinery orders for April and the trade balance for May. Calendar follows

US 100 Cash H4 Chart

Support: 14080 (S1), 13915 (S2), 13745 (S3)
Resistance: 14270 (R1), 14475 (R2), 14650 (R3)

GBP/USD H4 Chart

Support: 1.3990 (S1), 1.3845 (S2), 1.3670 (S3)
Resistance: 1.4145 (R1), 1.4275 (R2), 1.4390 (R3)

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