Markets attempt a bounce
Gold => The commodity rises from 1850
Nasdaq => The index attempts to rebound from its 18-month low
EUR/GBP => The pair rises over 0.8550
Gold looks to Fed speakers
Gold started the week on the back foot, falling 1.5%, as risk aversion drove trade, and the USD was the safe haven of choice.
The US dollar index surged to a 20-year high as fears over the Fed struggling to contain inflation and COVID lockdowns in China. The US is set to release CPI inflation data tomorrow.
Today, the precious metal is rising, paring some of yesterday’s losses as attention turns once again to Fed speakers, who are expected to stick to the hawkish script. Tighter monetary policy is bad news for non-yielding gold.
Where next for the Gold?
Gold has been trending lower after running into resistance at 2000 on April 18.
The price fell through the 50 and 100 sma, before running into resistance sat 1850 at the start o the month. The 50 SMA crossed below the 100 SMA, which, combined with the bearish RSI, suggests that there is more downside to come.
Sellers will need to break below 1850 in order to continue the bearish trend towards 1830. Buyers need to recapture 1890 to stage a recovery toward the 100 sma at 1917.
Nasdaq wipes out 2021 gains
The Nasdaq fell 4.3% yesterday, having shed 10% of its value in just three days.
The Nasdaq and the other indices on Wall Street fell sharply amid rising fears over an inflation-led growth slowdown. The recent lockdowns in Shanghai are expected to slow growth in the world’s second-largest economy at a time when inflation is rampant amid the fallout from the Russian war.
Expectations of a more hawkish Fed are keeping growth stocks out of favor. Today the index is attempting a bounce amid a risk reset, but economic worries remain.
EUR/GBP looks to German economic sentiment data
EUR/GBP rose 0.2% yesterday and was one of the calmer markets to trade after a dismal market mood ripped through asset classes.
Risk-off sentiment sent dragged on the pound while the euro showed surprising resilience. The euro rose across the board despite disappointing investor sentiment data, which showed that investor morale fell for a third consecutive month to a level last seen almost two years ago.
Today the pair is holding steady ahead of German ZEW economic sentiment data, which is expected to fall further.
|EZ investor sentiment
Ger. ZEW economic sentiment
|Actual: -22.6 (4.6)
Expected: -42.5 (1.5)
Support can be found at 0.8510 (March high) and 0.8480 (falling trendline support).
Resistance for the stock can be seen at 0.8590 (2022 high) and 0.86 (December high).