Nasdaq 100 bounces off uptrend line, USD/JPY nears key resistance as Brent crude price rises 

Macro update

Bonds sell off sharply: Rising oil prices fuelled inflation concerns ahead of the Fed and BOJ meetings, pushing the benchmark 10-year US Treasury yield above 5.02%, its highest level since mid-2007, while Japan’s 10-year yield climbed to a fresh 30-year high of 3.025%.

Oil extends gains: Renewed attacks on Saudi energy infrastructure kept the East-West pipeline offline, putting as much as 4% of global supply at risk, with Brent rising 1.6% to $107.37 and US crude gaining 1.82% to $103.24.

Asian equities retreat: Asian shares fell after prominent AI figures called for a slowdown in development, with MSCI’s Asia-Pacific index excluding Japan down 0.8% and South Korea leading regional losses with a 1.18% decline.

Fed set to lift rates: Markets are pricing in a 90% chance of a quarter-point rate hike on Wednesday, which would mark the first US increase since mid-2023, while Morgan Stanley expects another move in December.

Yen rally faces test: The yen’s sharpest rally in 18 months could hinge on the BOJ adopting a more hawkish stance on Friday, although analysts warn of a reversal towards ¥157 per dollar if expectations for quarterly rate hikes prove too aggressive.

Gold holds steady: Gold was little changed at $4,302 an ounce after touching a one-month low, with investors awaiting the Fed decision for clues on how quickly Chair Kevin Warsh plans to tighten monetary policy.

Nasdaq 100 bounces off uptrend line

The Nasdaq 100 managed to bounce off its March-to-September uptrend line at 28,868 and is seen trading back around the 55-day simple moving average (SMA) at 29,236. Slightly further up lies the 11 September high at 29,473 which needs to be exceeded for the late August-to-current September highs at 29,655-to-29,753 to be reached.

Support sits between the late August-to-early September lows at 28,953-to-28,876 and at the 14 September low at 28,868. If this level and the 8 July low at 28,815 were to be slipped through, the June and mid-July lows at 28,231-to-28,197 would be back in sight.

Short-term outlook: bearish while below the 11 September 29,473 high

Medium-term outlook: bullish while above the 14 September low at 28,868

Nasdaq 100 daily candelstick chart

USD/JPY nears resistance

USD/JPY's descent through its key ¥155.23-to-¥155.03 May-to-August lows took it to a near seven month low at ¥152.88 before recovering to the previous support - now because of inverse polarity - resistance zone at ¥155.03-to-¥155.23. This we expect to continue to cap, at least in the short-term. Were it to be overcome, the 11 May low at ¥156.39 may be reached.

Minor support may now be spotted around the 11 September low at  ¥153.24, ahead of last week's ¥152.88 trough. A fall through this low may lead to the January-to-February lows at ¥152.27-to-¥152.10 being reached.

Short-term outlook: bearish while below the 3 Aug low at ¥155.23

Medium-term outlook: bearish while below the 7 September high at ¥156.28

USD/JPY daily candlestick chart

Brent crude remains bid

Brent Crude's rally is losing upside momentum but the trend remains firmly bullish with it having so far risen to $111.45, to levels last traded in early May. If overcome, the March-to-May highs at $113.48-to-$113.73 may be hit. A rise above this key resistance area might lead to the $120 region being reached.

Minor support may be found around the 12 May high at $106.15.

Short-term outlook: bullish while above the 10 September low at $101.86

Medium-term outlook: bullish while above the 4 September $95.16 low

Brent crude daily candlestick chart