U.S. Dollar Strengthens; Focus Shifts To Retail Sales Data
2022.09.15 06:33
Tuesday and Wednesday saw very different levels of volatility and price traits. Of course, this was expected when considering the high levels of volatility following Tuesday’s (CPI) announcement.
Tuesday saw the highest level of volatility in almost two years, with substantial declines in the US stock market and advances in the . Yesterday, the USD saw a break as traders started to look for further clarity.
The Dollar held onto its gains, except against the . The Yen saw some favorable price movements after indications that the Federal Government and Bank of Japan may consider currency intervention.
Many traders have turned their attention to the US major indices, including the , , and . The main influences will continue to be the monetary policy and the market’s risk profile.
NASDAQ – Technical View
NASDAQ increased in value slightly but has formed nothing more than a retracement. The asset remains over 4% lower than the week’s market open.
The price has not managed to break above the 8-day EMA (Exponential Moving Average) in the shorter term, indicating that the price is still weak and may decline further.
The only point of caution for traders is that the price is close to the recent support level, which ranged from $11,912 to $11,992.
In the longer term, the price seems to have found resistance at the 150 average price movement, as seen on the 4- and 6-hour charts.
Most economists believe the market will continue to remain pressured as the Federal Reserve keeps raising interest rates.
However, some analysts have advised that this is an excellent time to purchase stocks for longer-term portfolios (but not derivatives which are for shorter-term investments).
For example, Ray Dalio from Bridgewater advises the market that the Fed will likely increase interest rates as high as 4.5% – 6% before we see inflation come down.
He believes that this can cause the US indices to decline further. On the other hand, David Rubenstein advises that the market is near its bottom, and consumer demand remains high.
Therefore, CFD traders must continue monitoring the price and the current trend rather than potential movement in the longer term.
EUR/USD – Technical View
{1|EUR/USD}} is again on the decline today, mainly triggered by the rising US Dollar.
The price has managed to break below yesterday’s price lows, forming consecutive bearish candlesticks throughout this morning’s Asian session. The Stochastic Oscillator and crossovers remain in favor of the asset decreasing in value.
Of course, the price continues to be influenced mainly by the latest inflation figures and the hawkish Fed. However, the situation with the supply of gas remains tense and may pressure the Euro further.
The Nord Stream-2 gas pipeline has not reopened, and Nord Stream-1 remains closed due to the only working turbine requiring repair. The latest data shows that gas storage facilities in the EU are filled by 83%, but according to experts, they will last only until February of next year.
Throughout the day, the market will mainly look at the US figures and . This can potentially influence both the US Dollar and the US stocks.
Stock traders are keen to see sales figures remain resilient while interest rates continue to increase. Investors will then turn their attention to tomorrow’s Prelim .
