Sample Category Title

• Nasdaq-100 index reversed from resistance level 18400.00
• Likely to fall to support level 18000.00

Nasdaq-100 index recently reversed down from the key resistance level 18400.00 (strengthened by the upper daily Bollinger Band), which has been reversing the index from the start of March.

The downward reversal from the resistance level 18400.00 started the active minor correction (b).

Given the strength of the resistance level 18400.00 and the bearish divergence on the daily Stochastic, Nasdaq-100 index can be expected to fall further to the next round support level 18000.00.

Markets

The eco calendar in Europe and the US this week is backloaded with the publication of key (national) EMU inflation data starting tomorrow and the Fed’s preferred inflation measure (PCE deflator) scheduled for release on Friday. Some less high profile data and CB comments in the meantime have to guide the day-to-day market dynamics post-Fed. However, data published today, were too close to expectations to provide any clear directional bias. German GFK consumer confidence improved slightly more than expected (-27.4 from -28.8), but this evidently won’t change the ECB’s assessment on (the start of/extent of) policy easing. German yields are ceding less than 1 bp across the curve. Somewhat of a similar wait-and-see narrative in the US. The March Philly Fed non-manufacturing business activity index in dropped more than expected from -8.8 to -18.3. Durable goods statistics were mixed. Headline orders printed slightly stronger than expected (1.4% M/M) as was the case fore core orders ex transportation (0.7%). At the same time, capital goods shipments non-defense ex aircraft delivered a slight miss with a -0.4% monthly decline. US house prices rises (S&P CoreLogic CS 20 city) slowed to 0.14% M/M, but this still resulted in a strong 6.59 Y/Y rise (from 6.15%). There is no one-on-one link with housing related components in the inflation gauges, but it probably won’t translate into a sharp decline in this key factor anytime soon. Last but not least, consumer confidence of the Conference Board, stabilized at 104.8 but last month was downward revised. Consumer remain upbeat in their current situation (151 from 147.8), but are turning more cautions in the future. Again a difficult mix from a market point of view. US yields currently are rising 1- 2 bps across the curve (benchmark change for the 2-y, -1.8 bps). The US 10-y real yield post Fed dropped back from 2%+ levels to 1.85% and last week/early this week and tries to turn north again. However, for now this has only a limited impact on risk assets or on the dollar. US equities  again succeed modest gains (Nasdaq + 0.5%). Eurostoxx 50 also sets a new cycle top. Oil also holds north of $86 p/b.

On FX market, the dollar is again locked in tight ranges, with a tentative negative bias. DXY eases to 104.12, EUR/USD ‘rises’ to 1.085. The yen fails to gain against the US currency despite strong verbal interventions from Japanese authorities of late. At USD/JPY 151.4 the multi-year top (weakest for the yen) remains dangerously close-by. Sterling underperforms, even as BoE’s Mann (admittedly one of the hawkish members within the MPC) says markets are pricing in too many rate cuts. EUR/GBP (0.8585) again nears first resistance (support for sterling) at 0.8600/02.

News & Views

In spite of Glapinski’s olive branch this weekend, Poland’s ruling coalition kicked off a probe into the NBP governor today. The Tusk government accuses the central bank head and PiS appointee of political partisanship with the surprise rate cuts ahead of the October elections and the change of heart shortly thereafter being one of the most contentious decisions. The fall-out on the zloty remains limited for now and EUR/PLN continues to hover near the multiyear lows around 4.30. Even if Glapinski was ousted or resigns himself, it would probably not change a lot to the current higher for longer rates regime. His successor, first deputy Kightley, is known for her Glapinski-alike views.

The Hungarian central bank (MNB) already scaled back the recently increased cutting pace. It lowered the policy rate by 75 bps to 8.25%. Inflation eased more than projected in the December report and could average between 3.5 and 5% this year and 2.5-3.5% in 2025 and 2026. In addition, labour market tightness eased and growth forecasts were lowered compared to December to mostly reflect weak external demand. GDP should expand 2-3% this year before picking up to 3.5-4.5% in 2025. Offsetting these arguments for continuing on the same monetary path of February (ie 100 bps cut), was the volatile international environment. MNB said that raised the risk premium on Hungarian assets recently. It clearly alluded to the latest sell-off of the forint when EUR/HUF came close to the symbolically important 400. But we are looking at the sharper (compared to regional peers) uptick in (swap) yields in recent weeks through a similar lens. With “risks surrounding global disinflation, volatility in international investor sentiment and the temporary rise in domestic inflation expected in the middle of the year”, the MNB said the monetary policy approach needs to be a careful one. This reveals a preference to stick to the current pace (or lower). The forint breathes a sigh of relief but isn’t out of the woods, with EUR/HUF holding north of 395.

WTI oil price is holding within a tight range on Tuesday and consolidating Monday’s 1.40% advance, sidelined by mixed fundamentals.

Supply concerns following recent attacks on Russian oil installation, which may cause longer disruptions from one of world’s top oil producers and exporters, weigh on oil price, while weaker dollar underpins.

Technical studies remain firmly bullish on daily chart and contribute to positive near-term outlook, as positive momentum is strong and daily Tenkan-sen / Kijun-sen are in bullish configuration and steeply ascending Tenkan-sen, which contained the latest pullback from new 2024 high ($83.10) is diverging.

Near-term bias is expected to remain with bulls while the price stays above Tenkan-sen ($81.32), guarding lower pivots at $80.30/$80.00 (March 21 higher low / psychological).

Res: 82.44; 83.10; 83.76; 84.17.
Sup: 81.32; 80.30; 80.00; 79.47.

US Conference Board Consumer Confidence ticked down from downwardly revised 104.8 to 104.7 in March, below expectation of 107.2. Present Situation Index rose from 147.6 to 151.0. Expectations Index fell from 76.3 to 73.8.

Dana M. Peterson, Chief Economist at The Conference Board said: "Consumers remained concerned with elevated price levels, which predominated write-in responses... Indeed, average 12-month inflation expectations came in at 5.3 percent—barely changed from February's four-year low of 5.2 percent."

"Recession fears continued to trend downward... Meanwhile, consumers expressed more concern about the US political environment compared to prior months."

Full US consumer confidence release here.

Market picture

Crypto market capitalisation regained another 5% in 24 hours, peaking earlier in the day at $2.7 trillion against a recent peak of 2.7 in mid-March and around $3 trillion at the end of 2021. The recovery is faster than before the decline, promising prospects for further growth.

Bitcoin has once again surpassed the psychologically important 71K. The main intrigue of the next few days is the ability to overcome the previous highs at $73.7K. Strengthening above $75K will make the growth scenario up to 95.5 workable. But until then, one should be prepared for a re-intensification of selling in the first cryptocurrency.

According to CoinShares, investments in crypto funds fell by a record $942 million last week after two weeks of updating all-time highs in inflows. Investments in Bitcoin were down $904 million; Ethereum was down $34 million, and Solana was down $5.6 million. Investments in funds that allow for bitcoin shorts were down $4 million.

News background

Goldman Sachs said there is growing client interest in cryptocurrencies, fuelled by the approval of spot bitcoin ETFs in the US. Demand is mainly coming from traditional hedge funds. However, the institution intends to reach a “broader paradigm of clients”, including asset managers and banks and select cryptocurrency-focused companies.

Skybridge Capital founder Anthony Scaramucci advised bitcoin investors not to sell the cryptocurrency even if they are spooked by market volatility.

CommEX unexpectedly announced a complete shutdown on 10 May. Binance said the exchange “failed to fulfil its obligations” as part of a deal to sell the exchange’s Russian business to it.

Daily Pivots: (S1) 1.0812; (P) 1.0827; (R1) 1.0852; More...

Intraday bias in EUR/USD stays neutral for the moment, with consolidations from 1.0801 extending. Risk will stay on the downside as long as 55 4H EMA (now at 1.0862) holds. Below 1.0801 will resume the fall from 1.0980 to retest 1.0694 first. Break there will resume the decline from 1.1138 and target 100% projection of 1.1138 to 1.0694 from 1.0980 at 1.0536.

In the bigger picture, price actions from 1.1274 are viewed as a corrective pattern to rise from 0.9534 (2022 low). Rise from 1.0447 is seen as the second leg. While further rally could cannot be ruled out, upside should be limited by 1.1274 to bring the third leg of the pattern. Meanwhile, sustained break of 1.0694 support will argue that the third leg has already started for 1.0447 and possibly below.

Daily Pivots: (S1) 1.2602; (P) 1.2627; (R1) 1.2663; More...

Intraday bias in GBP/USD stays neutral, as consolidations from 1.2574 continues. Risk will stay on the downside as long as 55 4H EMA (now at 1.6905) holds. Below 1.2574 will resume the fall from 1.2892 to 1.2517 structural support first. Decisive break there will suggest that rise from 1.2036 has completed at 1.2892 already, and turn near term outlook bearish.

In the bigger picture, price actions from 1.3141 medium term top are seen as a corrective pattern to up trend from 1.0351 (2022 low). Rise from 1.2036 is seen as the second leg, which might still be in progress. But upside should be limited by 1.3141 to bring the third leg of the pattern. Meanwhile, break of 1.2517 support will argue that the third leg has already started for 38.2% retracement of 1.0351 (2022 low) to 1.3141 at 1.2075 again.

Daily Pivots: (S1) 151.13; (P) 151.35; (R1) 151.64; More...

Outlook in USD/JPY remains unchanged at consolidation from 151.82 is still extending. Intraday bias stays neutral at this point. Further rally is expected as long as 150.25 support holds. On the upside, decisive break of 151.93 key resistance will confirm long term up trend resumption. Next near term target will be 61.8% projection of 140.25 to 150.87 from 146.47 at 153.03. However, firm break of 150.25 will turn bias back to the downside for deeper pullback.

In the bigger picture, correction from 151.87 (2023) high could have completed at 140.25 already. Rise from 127.20 (2023 low), as part of the long term up trend, is probably ready to resume. Decisive break of 151.93 resistance (2022 high) will confirm this bullish case. Next medium term target will be 61.8% projection of 127.20 to 151.89 from 140.25 at 155.20. This will remain the favored case as long as 146.47 support holds, in case of another pullback.

Daily Pivots: (S1) 0.8977; (P) 0.8986; (R1) 0.9004; More....

USD/CHF's rally resumed after brief consolidations and intraday bias is back on the upside. Current rise from 0.8332 should target 100% projection projection of 0.8550 to 0.8884 from 0.8728 at 0.9062. Firm break there will target 0.9243 key medium term resistance next. On the downside, below 0.8964 minor support will turn intraday bias neutral and bring consolidations first. But outlook will stay bullish as long as 0.8884 resistance turned support holds.

In the bigger picture, price actions from 0.8332 medium term bottom as tentatively seen as developing into a corrective pattern to the down trend from 1.0146 (2022 high). Further rise would be seen as long as 0.8728 support holds. But upside should be limited by 0.9243 resistance, at least on first attempt.