Market Meltdown: Nasdaq Plunges 1.2% Amid Inflation Concerns.

Introduction

In the dynamic world of finance, market trends are akin to a roller coaster ride – filled with unpredictable twists and turns. Yesterday, the US markets encountered a bumpy road as investors held their breath in anticipation of crucial inflation statistics. The Nasdaq took a tumble, declining by 1.17%, with Nvidia’s 4.7% dip exacerbating the situation. The Dow and S&P weren’t spared either, seeing a respective decrease of 0.7% and 0.54%. Meanwhile, shorter dates experienced an ascent, with the pivotal 2-year mark observing a notable gain of 6 basis points. In contrast, the longer years faced a decline, particularly with the $38 billion auction for a 10-year paper concluding at 3.999%. Gold and Silver also experienced downward slides, with gold’s price hitting a monthly low below $1,915 per ounce. On the foreign exchange front, the major currencies remained confined within narrow trading ranges.

All Eyes on Today’s Inflation Figures

As the sun rises on the financial horizon, the focus is firmly on the US Consumer Price Index (CPI) figures that are set to be unveiled during the New York session. The market is bracing itself for a potentially tumultuous day, with traders eagerly awaiting various data releases. These include an Australian report on inflation expectations, potential New Loans data from China, and the latest European Central Bank (ECB) Economic Bulletin. While these releases hold importance, the heart of today’s market activity is expected to beat during the US session. Alongside the CPI figures, a weekly update on unemployment claims and a speech by Fed member Patrick Harper are also poised to make waves.

Unveiling the US Session’s Tale

After a remarkable 17 million barrel drop the previous week, the Energy Information Administration’s (EIA) crude oil inventories delivered a twist with a surprising increase of 5.9 million barrels – a notable deviation from the projected 2.1 million barrel gain. This unexpected turn of events is pointing towards diminished demand in the US, in conjunction with an unforeseen spike in American Petroleum Institute (API) stockpiles earlier in the week. Despite Saudi Arabia’s commitment to extend output cutbacks through September, crude oil prices continue to stand tall. WTI oil inches closer to the significant threshold of $84 per barrel.

Implications for the Asia Session

While the dollar index (DXY) clocked in at 102.50 overnight due to hawkish comments made by various Federal Open Market Committee (FOMC) members over the past week, the dawn brings with it a potential uptick in crude oil prices. Market activity in the Asian session might resemble a tranquil pond, as traders await the unveiling of the latest inflation data. The US CPI report, a highly anticipated release, is set to steal the spotlight later in the day.

Navigating the Dollar Index (DXY)

Key News Events Today:

1. CPI
2. Unemployment Claims
3. FOMC Member Harker Speaks

What’s in Store for DXY Today?

The headline CPI, which peaked at 9.1% in June 2022, has embarked on a downward trajectory. The core reading has also begun to follow suit. However, July’s estimated headline CPI increase of 3.3% YoY, compared to June’s 3.0%, has raised eyebrows. Should both the headline and core readings surpass their respective estimates, a substantial DXY surge is almost certain. Conversely, the recent upswing in unemployment claims suggests potential cracks in the labor market, posing a drag on the DXY. Regardless of the outcome, today’s markets are poised for a whirlwind of volatility.

Furthermore, the spotlight falls on Patrick Harker, President of the Federal Reserve Bank of Philadelphia. His insights on employment during a Federal Reserve online session hold the potential to impact future monetary policy moves, potentially impacting the US dollar’s trajectory.

Insights from the Central Bank

• The federal funds rate target range: 5.25% to 5.50%.
• A strong commitment to restoring inflation to a 2.0% target.
• Willingness to adapt monetary policy to mitigate emerging risks.
• Consideration of factors such as labor market conditions, inflation pressures, and international financial developments.
• The upcoming meeting: September 19-20, 2023.

Next 24 Hours Bias: Medium Bearish

The Australian Dollar (AUD)

Key News Events Today:

• MI Inflation Expectations

Prospects for AUD Today

Over the past two months, the Melbourne Institute’s inflation expectations remained steady at 5.2%. However, August’s figures took a slight dip to 4.9%. As the CPI numbers take center stage, the Australian dollar’s demand might mirror the downward trajectory. A potential range between 0.65 and 0.65 could be in the cards.

Insights from the Central Bank

• The cash rate target remains unchanged at 4.10% for the second consecutive meeting.
• Australian inflation has peaked and is on a downward trend, necessitating a return to the target range.
• The possibility of further monetary policy tightening.
• Upcoming meeting: September 5, 2023.

Next 24 Hours Bias: Medium Bullish

The Euro (EUR)

Key News Events Today:

• No major news events.

Expectations for EUR Today

The Euro’s journey may witness another attempt to ascend after failing to breach 1.1100 overnight. Should the US headline and core statistics continue to drop on an annualized basis compared to projections, the Euro might finally conquer the elusive peak.

Insights from the Central Bank

• A 25 basis point increase in the three key interest rates by the ECB.
• Slight adjustments in economic growth projections.
• Commitment to maintaining sufficiently restrictive interest rates to achieve inflation targets.
• Data-driven rate decisions, considering inflation outlook, economic data, and policy transmission strength.
• Upcoming meeting: September 14, 2023.

Next 24 Hours Bias: Medium Bullish

Global Market Snapshot

Asian Stock Markets:

• Nikkei up 0.84%
• Shanghai Composite up 0.31%
• Hang Seng up 0.03%
• ASX up 0.26%

European Equities:

• DAX futures up 0.63%
• CAC 40 up 1.37%
• FTSE up 0.12%

US Stock Market:

• Dow Jones down 0.54%
• S&P 500 down 0.70%
• Nasdaq 100 down 1.17%

Commodities:

• Gold at $1918.27 (+0.17%)
• Silver at $22.79 (+0.74%)
• Brent Oil at $87.92 (+0.42%)
• WTI Oil at $84.70 (+0.38%)

Key News & Data

• (USD) CPI (MoM) (Jul) Forecast 0.3%, Previous 0.2% at 18:00
• (USD) Core CPI (MoM) (Jul) Forecast 0.2%, Previous 0.2% at 18:00
• (USD) CPI (YoY) (Jul) Forecast 3.3%, Previous 3.0% at 18:00
• (USD) Initial Jobless Claims Forecast 230K, Previous 227K at 18:00
• (EUR) Italian CPI (MoM) (Jul) Forecast 0.1%, Previous 0.0% at 13:30

Expert Analysis: Forex and Commodity Market Technical Outlook

In the ever-shifting landscape of financial markets, staying informed is paramount. In this comprehensive analysis, we delve into the technical aspects of various major currency pairs and commodities, shedding light on potential trading opportunities. Let’s explore the recent trends and projections that traders and investors should keep a close eye on.

GBP/USD: Riding the Trends

Exponential Moving Averages (EMA)

• EMA 5: With a value of 1.2733, the 5-day EMA signals a Buy sentiment.
• EMA 20: At 1.2749, the 20-day EMA reinforces the Buy indication.
• EMA 50: Aligned at 1.2791, the 50-day EMA points towards a Sell recommendation.

Simple Moving Averages (SMA)

• SMA 5: Displaying 1.2732, the 5-day SMA indicates a Buy sentiment.
• SMA 20: Recording 1.2746, the 20-day SMA supports a Buy stance.
• SMA 50: Standing at 1.2812, the 50-day SMA signifies a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI exhibits a reading of 48.81, suggesting a positive signal.

Stochastic Oscillator

The Stochastic Oscillator’s %K value suggests a Neutral condition.

Resistance and Support Levels

• Resistance: Noted at 1.2780.
• Support: Identified at 1.2673.

Summary and Trade Suggestions

Considering technical analysis, GBP/USD leans towards a Buy outlook. Traders might find value in entering long positions, factoring in the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 1.2831
• Take Profit: 1.2971
• Stop Loss: 1.2724

EURUSD: Navigating Market Dynamics

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 1.0989, the 5-day EMA signals a Buy signal.
• EMA 20: At 1.0985, the 20-day EMA showcases a Buy sentiment.
• EMA 50: Resting at 1.1007, the 50-day EMA suggests a Buy indication.

Simple Moving Averages (SMA)

• SMA 5: Indicating 1.0983, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: Standing at 1.0971, the 20-day SMA supports a Buy sentiment.
• SMA 50: Registers at 1.1034, affirming a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 56.46, signifying a Positive signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Positive stance.

Resistance and Support Levels

• Resistance: Observed at 1.1028.
• Support: Identified at 1.0977.

Summary and Trade Suggestions

EURUSD’s technical analysis suggests a Buy sentiment. Traders could consider initiating long positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 1.1055
• Take Profit: 1.1119
• Stop Loss: 1.1006

AUDUSD: Riding the Waves

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 0.6542, the 5-day EMA suggests a Buy signal.
• EMA 20: At 0.6568, the 20-day EMA signals a Sell sentiment.
• EMA 50: Resting at 0.6628, the 50-day EMA indicates a Sell indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 0.6541, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: At 0.6551, the 20-day SMA supports a Sell sentiment.
• SMA 50: Registers at 0.6666, affirming a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 43.22, indicating a Neutral signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance and Support Levels

• Resistance: Observed at 0.6581.
• Support: Identified at 0.6525.

Summary and Trade Suggestions

AUDUSD’s technical analysis leans towards a Sell sentiment. Traders might consider short positions, factoring in the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 0.6506
• Take Profit: 0.6454
• Stop Loss: 0.6552

USDJPY: Seizing Opportunities

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 143.61, the 5-day EMA suggests a Buy signal.
• EMA 20: At 142.89, the 20-day EMA signals a Buy sentiment.
• EMA 50: Resting at 142.11, the 50-day EMA indicates a Buy indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 143.60, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: At 142.94, the 20-day SMA supports a Buy sentiment.
• SMA 50: Registers at 141.68, affirming a Buy indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 62.19, indicating a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Positive stance.

Resistance and Support Levels

• Resistance: Observed at 144.08.
• Support: Identified at 143.67.

Summary and Trade Suggestions

USDJPY’s technical analysis leans towards a Buy sentiment. Traders might consider entering long positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 144.26
• Take Profit: 145.07
• Stop Loss: 143.67

FTSE 100: Navigating Indices

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 7572.43, the 5-day EMA suggests a Buy signal.
• EMA 20: At 7565.97, the 20-day EMA signals a Buy sentiment.
• EMA 50: Resting at 7568.09, the 50-day EMA indicates a Buy indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 7572.86, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: At 7545.63, the 20-day SMA supports a Buy sentiment.
• SMA 50: Registers at 7611.45, affirming a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 53.27, signifying a Bullish signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Positive stance.

Resistance and Support Levels

• Resistance: Observed at 7597.9.
• Support: Identified at 7560.8.

Summary and Trade Suggestions

FTSE 100’s technical analysis leans towards a Buy sentiment. Traders might consider entering long positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 7626.1
• Take Profit: 7701.9
• Stop Loss: 7566.1

WTI Crude Oil: Tapping into Energy Markets

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 83.31, the 5-day EMA suggests a Buy signal.
• EMA 20: At 81.95, the 20-day EMA signals a Buy sentiment.
• EMA 50: Resting at 79.96, the 50-day EMA indicates a Buy indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 83.27, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: At 81.72, the 20-day SMA supports a Buy sentiment.
• SMA 50: Registers at 79.92, affirming a Buy indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 68.38, indicating a Buy signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance and Support Levels

• Resistance: Observed at 84.42.
• Support: Identified at 82.97.

Summary and Trade Suggestions

WTI Crude Oil’s technical analysis leans towards a Buy sentiment. Traders might consider entering long positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 85.26
• Take Profit: 87.40
• Stop Loss: 83.81

Silver: Precious Insights

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 22.99, the 5-day EMA suggests a Sell signal.
• EMA 20: At 23.66, the 20-day EMA signals a Sell sentiment.
• EMA 50: Resting at 23.74, the 50-day EMA indicates a Sell indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 22.97, the 5-day SMA reinforces the Sell recommendation.
• SMA 20: At 24.13, the 20-day SMA supports a Sell sentiment.
• SMA 50: Registers at 23.65, affirming a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 37.59, indicating a Negative signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Neutral stance.

Resistance and Support Levels

• Resistance: Observed at 22.90.
• Support: Identified at 22.44.

Summary and Trade Suggestions

Silver’s technical analysis leans towards a Sell sentiment. Traders might consider short positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 22.20
• Take Profit: 21.51
• Stop Loss: 22.74

Ethereum: Unveiling Crypto Insights

Exponential Moving Averages (EMA)

• EMA 5: Positioned at 1845.53, the 5-day EMA suggests a Buy signal.
• EMA 20: At 1860.71, the 20-day EMA signals a Sell sentiment.
• EMA 50: Resting at 1867.53, the 50-day EMA indicates a Sell indication.

Simple Moving Averages (SMA)

• SMA 5: Displaying 1842.02, the 5-day SMA reinforces the Buy recommendation.
• SMA 20: At 1865.08, the 20-day SMA supports a Buy sentiment.
• SMA 50: Registers at 1886.77, affirming a Sell indication.

Relative Strength Index (RSI)

The 14-day RSI stands at 44.11, indicating a Neutral signal.

Stochastic Oscillator

The %K value of the Stochastic Oscillator suggests a Positive stance.

Resistance and Support Levels

• Resistance: Observed at 1866.63.
• Support: Identified at 1836.08.

Summary and Trade Suggestions

Ethereum’s technical analysis leans towards a Sell sentiment. Traders might consider short positions, taking into account the indicators, moving averages, and oscillators.

Trade Suggestion:

• Entry Point: 1820.27
• Take Profit: 1779.19
• Stop Loss: 1851.88

Conclusion

In the realm of finance, every day is a new chapter, and market dynamics shape the narrative. As the sun sets on this trading day, the anticipation for crucial inflation data still hangs in the air. The markets experienced their fair share of ups and downs, with the Nasdaq’s dip and oil’s unexpected turn captivating investor attention. The stage is set for a period of volatility, marked by central bank decisions, economic releases, and a flurry of market activity. In the ever-changing landscape of global finance, staying informed remains the key to riding these waves with confidence.