Nasdaq 100 capped as EUR/USD recovers and WTI drifts lower

Macro update

​Equities and dollar weaken:

Global stocks came under pressure and the United States (US) dollar retreated after Federal Reserve (Fed) Chair Jerome Powell said the Trump administration had threatened him with criminal indictment, reigniting concerns over central bank independence.

Futures signal caution:

S&P 500 futures fell around 0.5% and European equity futures edged lower, while Asian markets moved higher led by technology shares, with Japan closed for a public holiday.

FX markets react:

The dollar index dropped roughly 0.3%, marking its largest daily decline since mid-December, as the Swiss franc gained 0.4% and the euro strengthened toward $1.17.

​Rates outlook shifts slightly:

Fed funds futures priced in around three basis points of additional easing this year, a modest adjustment that nonetheless reflects growing concern over potential political pressure on the Fed to cut rates more quickly.

​Gold jumps on risk aversion:

Gold climbed to a new record above $4600 an ounce as investors sought safe havens, with the move reinforced by escalating unrest in Iran and elevated geopolitical risks.

​Oil eases, data awaited:

Brent crude oil slipped to around $62.90 a barrel after recent gains, as markets turned their focus to upcoming US inflation data, China trade figures and the start of the US bank earnings season.

​Nasdaq 100 bullish while above 25,400

​The Nasdaq 100 is seen heading towards its 25,835 December high which will remain in sight while the 8 January low at 25,400 holds on a daily chart closing basis.

​If slipped through, the early January low at 25,087 may be retested. Failure there would probably engage the area between the 22 September high and 22 October as well as 7 November lows at 24,782 - 24,604.

​A rise and daily chart close above the 25,835 December peak is needed for the October record high at 26,182 to be back in the frame.

​Short-term outlook:

Bullish while above the 8 January 25,400 low.

​Medium-term outlook:

Bullish while above the 17 December low at 24,468 .

Nasdaq 100 daily candlestick chart

EUR/USD recovers from one-month low

EUR/USD seems to have found support around its early December $1.1615 low and is seen rallying off last week's $1.1618 trough towards its $1.1703 mid-December trough.

​Another potential upside target is the December to January resistance line at $1.1730 and Friday's $1.1738 high. This needs to be overcome for the $1.1800 region to be back in favour.

​Were support at $1.1618 - $1.1615 to give way, though, the 200-day simple moving average (SMA) at $1.1577 may be reached.

​Short-term outlook:

Bullish while above $1.1615, targeting the $1.1750 area.

​Medium-term outlook:

Neutral while above $1.1615, failure there may put the $1.1500 region back. on the map 

EUR/USD daily candlestick chart

WTI rally loses upside momentum

​West Texas Intermediate's (WTI) strong bounce off last week's $55.76 per barrel low seems to be running out of steam below its early December $60.50 peak.

​While no rise and daily chart close above this level is seen, the medium-term downtrend remains intact with the late November low at $57.10 representing a possible short-term downside target.

​Short-term outlook:

Toppish while below $60.50, targeting the  late November low at $57.10.

​Medium-term outlook:

Bearish while below the 5 December $60.50 high.

WTI daily candlestick chart