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USD Rally Hits Nasdaq
Risk sentiment is looking a little shaky ahead of the US open today following a 2.4% drop in the Nasdaq yesterday. A combination of heightened uncertainty over the growing conflict in the Middle East, as well as a fresh uptick in the US Dollar, has knocked tech stocks lower this week. Yesterday, a sharp rise in US retail sales underscored the view that the Fed will likely hold off from hiking rates in June. Indeed, on the back of last week’s hot inflation reading, further US data strength is raising risks that we see a shift in the rates outlook from the Fed, lifting near-term USD forecasts. Against this backdrop, the Nasdaq looks vulnerable to a fresh move lower.
Growing Geopolitical Risks
Heightened geopolitical risk is also taking a toll on stock market sentiment. On the back of Iran’s retaliatory attack against Israel, Israel’s war cabinet has this week announced that it plans to take further action against Iran. The news is increasing the risk of a broader conflict emerging in the Middle East which risks creating much deeper implications worldwide. Looking ahead, the Nasdaq remains vulnerable to a deeper move lower on any fresh headlines regarding a further escalation of violence in the region.
Technical Views
Nasdaq
The rally has stalled for now into the 18400 level with price since turning lower and breaking back down beneath 18112.72. Price is now testing the 17693.37 level which, if broken, opens the way for a test of deeper support at 16982.40, in line with bearish momentum studies readings.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.