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Nasdaq 100 rallies as EUR/USD, WTI retrace
Technical analysis of the Nasdaq 100 as it rallies while EUR/USD and WTI hold at support.
Macro update
Asia rebounds after NVIDIA earnings:
Asian equities moved slightly higher after NVIDIA projected first quarter (Q1) revenue above expectations, calming concerns about artificial intelligence (AI) spending, though the stock traded flat after hours as investors, used to outsized beats, were left underwhelmed.
Futures dip despite Wall Street rally:
Nasdaq 100 and S&P 500 futures slipped 0.3% and 0.2% respectively, while Eurostoxx 50 and FTSE futures also edged lower, tempering enthusiasm from Wednesday’s tech-driven surge that lifted the Nasdaq 1.26%.
AI sustainability debate continues:
Investors remain divided over the durability of heavy AI capital expenditure, with valuation, monetisation and disruption risks still in focus even as chipmakers and software names attempt to stabilise after recent volatility.
Yen steadies as BoJ outlook evolves:
The Japanese yen strengthened about 0.3% to 155.88 per US dollar after hitting a two-week low, as comments from Governor Ueda and board member Takata kept the possibility of near-term rate hikes on the table despite dovish-leaning nominations.
Dollar soft with Fed hold priced:
The dollar index was broadly unchanged, with markets assigning a 98% probability that the Federal Reserve (Fed) will leave rates unchanged in March, while the euro ticked up to $1.18 and sterling held near $1.36.
Oil supported by US-Iran tensions:
Brent crude oil traded around $71 a barrel as markets evaluated whether Geneva talks between the US and Iran could prevent escalation, with gains capped by a 16-million-barrel rise in US inventories and expectations that OPEC+ may increase output by 137,000 barrels per day.
Nasdaq 100 in recovery mode
The Nasdaq 100 has risen swiftly ahead of NVIDIA's results and has come close to its 11 February high at 25,382. Now that the earnings have been published the question is whether this level may be exceeded. If so, the 25,700 region may be next in line.
Were the current advance to run out of steam, the 18 to 20 February highs at 25,086 - 25057 may be revisited.
Short-term outlook:
Bullish while above the 23 February 24,618 low.
Medium-term outlook:
Bullish while above the 17 February low at 24,387; failure there would neutralise our outlook.
Nasdaq 100 daily candlestick chart
EUR/USD hovers above support
EUR/USD is seen levelling out above its mid-February $1.1742 low.
A fall through $1.1742 may lead the cross to slide towards the $1.1700 region.
Downside pressure should remain in play while the January-to-February downtrend line at $1.1829 caps.
Short-term outlook:
Bearish while below the 17 February $1.1898 high, targeting the $1.1700 region.
Medium-term outlook:
Bullish while above the $1.1573 January low.
EUR/USD daily candlestick chart
WTI probes support line
West Texas Intermediate's (WTI) advance is seen running out of steam as investors wait to see whether Iran-US talks progress or military action will be seen.
The light crude oil price is weighing on its breached January-to-February resistance line - now because of inverse polarity a support line - at $65.03 which is expected to offer support. If not, the $64.00 region may be revisited.
Minor resistance may be spotted between the 4 to 11 February highs at $65.53 - $65.83.
Short-term outlook:
Bearish while below the 25 February $66.40 high.
Medium-term outlook:
Bullish while above the 3 February low at $61.12.
WTI daily candlestick chart
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