EUR/USD, WTI and Nasdaq 100 Rebound After Weakest Week Since April
The oil price, EUR/USD and Nasdaq 100 staged a modest rebound on Friday after its weakest week since April, supported by a potential bullish “hammer” formation on the daily chart. With investors hoping for an end to the longest US government shutdown in history, sentiment is improving.
Macro update
Global stock markets rose strongly amid growing optimism that the 40-day US government shutdown may soon end, after the Senate advanced legislation to fund the government through late January.
US futures climbed and Treasury yields edged higher - with the 10-year at about 4.14% - as sentiment improved despite weak consumer confidence data.
In Asia, equities rebounded: Japan’s Nikkei 225 rose ~1.3%, South Korea’s KOSPI surged more than 3%, and Indonesia hit a record high as regional shares rallied.
European futures pointed to a strong open: the Euro Stoxx 50 and the DAX 40 futures climbed about 1.5%, and FTSE futures gained 0.85%, reflecting global hopes over a US deal.
China’s inflation data showed signs of stabilising: producer-price deflation eased and consumer prices turned positive in October, offering a glimmer of improvement for Beijing’s industrial over-capacity challenge.
Bank of Japan (BoJ) minutes from the October meeting revealed increasing policy-maker support for near-term rate hikes - conditional on sustained wage growth momentum.
Nasdaq 100 bounces off support
The Nasdaq 100 underperformed and recorded its weakest week since the sharp post–Liberation Day decline in early April amid the longest government shutdown in history.
Friday saw a minor recovery with a 'hammer' forming on the daily candlestick chart. The potentially bullish pattern needs to be confirmed by a daily chart close above Friday's 25,065 high on Monday, though.
Potential upside targets are the 10 October high at 25,195, the 24 October low at 25,288 and Wednesday's low at 25,235.
Minor support sits at the 16 October 24,998 high ahead of the 55-day moving average (SMA) at 24,709, the 22 October low at 24,652 and Friday's trough at 24,604.
Nasdaq 100 daily candlestick chart
EUR/USD looks short-term bid
EUR/USD is heading towards the downtrend channel resistance line at $1.1601, a rise above which would likely target the 11 September and 25 September lows at $1.1646-to-$1.1661 which may act as resistance.
Potential slips may find support between the late August-to-mid-October lows at $1.1574-to-$1.1542.
EUR/USD daily candlestick chart
WTI tries to recover
WTI continues to range trade but whilst doing so is seen bouncing off last week's $58.83 per barrel low whilst aiming for the early October low at $60.40.
Once bettered, the early September low at $61.45 and the early November high at $61.50 may be back in sight.
Minor support sits at the late October $59.64 low.
A bullish reversal and rally above last Monday's $61.50 high is needed for the late October peak at $62.59 to be back in play. Only a rise and daily chart close above this level and the 8 October high at $62.92 would put the bulls back in control.
WTI daily candlestick chart
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