Market Crash Incoming?
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
Latest News: ECB, Strong USD, Weak Gold
Latest news
- The Bank of Canada hold a meeting yesterday. Key takeaways: the key interest rate and the pace of bond purchases were left unchanged; the bank was optimistic about the economic recovery in the 2nd half of 2021. USD/CAD is edging higher due to the strong USD.
- China’s tech stocks dropped after officials told Tencent and Netease to stop focusing on profit in gaming, again drawing attention to China’s regulatory crackdown.
- A rally that pushes global stocks to record highs has slowed as investors concern about the delta strain and its impact on the global economic recovery. Thus, the safe-haven US dollar is rising.
- The hawkish comments of the Fed Chief Kaplan added to the USD’s strength. He said that the Fed may start tapering as early as October. This is the reason XAU/USD (gold) has dropped below $1790.
- GBP/USD has been falling for the fourth straight day amid the US dollar’s strength and Brexit concerns.
- ECB is holding a meeting today at 14:45 GMT+3! It’s a crucial event for the euro.
Technical outlook
EUR/USD has reversed up from the 50-day moving average of 1.1800. It has failed to cross the resistance level of 1.1825 so far, but if it manages to do so, it may jump to the 50-period moving average of 1.1840. Support levels are the psychological mark of 1.1800 and the 100-period moving average of 1.1785. Follow the ECB meeting at 14:45 GMT+3.
Gold is weakening these days. It has even broken below the 200-period moving average of $1795. The way down to the 38.2% Fibonacci retracement level of $1775 is open now. The metal should stop at the $1775 support level. Resistance levels are $1795 and $1800.
S&P 500 has started consolidating. Look at the red line, the 50-day moving average. It has supported the index so many times. Thus, we might expect S&P to drop to the moving average at 4430 if it manages to break below the recent low of 4470. Monitor the movement of the S&P 500! When it gets closer to this red line – the 50-day moving average, consider buying!
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The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.
