Nasdaq 100 capped by resistance as Brent crude, USD/JPY grind higher

Macro update

Asian equities extend gains: Regional stocks advanced after US consumer prices rose 0.1% in July as expected, bringing annual inflation down to 3.4% and reducing the market-implied probability of a September Federal Reserve rate hike to 40% from 54% a week earlier.

Chipmakers lead the regional rally: South Korea's KOSPI jumped 4.4% and Japan's Topix reached a record high as semiconductor stocks followed overnight gains in US AI shares, with SK Hynix rising more than 7% and Advantest climbing over 5%.

Yen strengthens as BOJ rate expectations move forward: The dollar eased towards ¥159 as investors brought forward expectations for Bank of Japan tightening to September, supported by Japanese wholesale prices rising 7.2% year-on-year in July.

Oil prices retreat from recent highs: Brent crude slipped towards $90 a barrel and US crude eased to around $82 as weaker demand forecasts from OPEC and the IEA, combined with a surprise 17.4 million-barrel increase in US inventories, outweighed ongoing concerns over Gulf supply disruptions.

Gold consolidates near a two-month high: Bullion held around $4,400 an ounce after rising almost 1% in the previous session to its highest level since 5 June, with investors now awaiting US producer price data for further evidence that inflationary pressures are easing.

US-Iran tensions continue to support oil prices: Washington and Tehran remain at an impasse over efforts to revive June's interim agreement, with no meaningful progress reported and the Strait of Hormuz still closed, keeping a geopolitical risk premium embedded in crude prices.

Nasdaq 100 capped by resistance

The Nasdaq 100 is struggling to overcome its July-to-August highs at 29,857-to-29,947 but while it remains above Tuesday's 29,428 low may have another go at breaking through it. If successful, the late June high at 30,329 may be reached next.

Support below this week's 29,428 low sits at the 6 August low at 29,123.

Short-term outlook: neutral with a bullish bias while capped by the 5 August 29,947 high, a rise above which would turn the forecast bullish

Medium-term outlook: bullish while trading above the 6 August low at 29,123

Nasdaq 100 daily candelstick chart

USD/JPY continues to grind higher 

USD/JPY continues its steady advance, having bounced off its 38.2% Fibonacci retracement at ¥158.58 on Wednesday with the 50% retracement of the July-to-August decline at ¥159.62 about to be tested. If overcome, the area between the mid-June high and early July low at ¥160.48-to-¥160.60 may be reached next.

Potential support below the 38.2% Fibonacci retracement at ¥158.58 may be spotted around the 200-day simple moving average (SMA) at ¥158.15.

Short-term outlook: bullish while above the 12 August low at ¥158.58

Medium-term outlook: bullish while above the 3 August trough at ¥155.23

USD/JPY daily candlestick chart

Brent crude loses upside momentum 

Brent Crude's rally from its early July $70.22 per barrel low has taken it to its July $95.48 six-week high below which it has been trading ever since.

In case of a rise above this week's high at $92.90 being seen, the $94.00-to-$95.00 region may be back in sight.

Potential support below the 4 August high at $90.20 may be found around the late July low at $85.34.

Short-term outlook: bullish while above the 10 August low at $86.14

Medium-term outlook: neutral with a bullish undertone while above the 5 August $81.48 low

Brent crude daily candlestick chart