Nasdaq 100 hits record high as USD/JPY grapples with downtrend line and Brent crude slips   

Macro update

Global stocks hover near record highs: A technology-led rally lifted the Nasdaq 100 to a record close and left the S&P 500 within 0.5% of its all-time high, while MSCI’s Asia Pacific index gained 0.1% and the All Country World Index remained less than 1.5% below its August peak.

Treasury yields continue to rise: The 10-year yield increased one basis point to 5.32%, close to levels last seen in 2002, while the two-year yield added two basis points to 4.83%.

Markets shrug off latest rate increase: Strong corporate earnings, resilient consumer spending and accelerating AI investment outweighed last month’s Federal Reserve rate hike and renewed inflation concerns.

Oil and gold move in opposite directions: Brent crude rose 0.6% to around $100.90 a barrel, recovering some of Monday’s losses, while gold fell 0.4% to approximately $4,120 an ounce.

Dollar stays firm as euro weakens: The US dollar index held Monday’s gains at its highest level since June, while the euro remained close to a 17-month low after the French central bank governor warned of higher borrowing costs, with Marine Le Pen’s alternative budget proposals due on Tuesday.

Asian markets subdued as bonds weaken: Japanese, Australian and New Zealand government bonds fell in line with US Treasuries, while regional equities traded cautiously as investors awaited the next major catalyst ahead of the US earnings season.

Nasdaq 100 trades in record highs

The Nasdaq 100 continues to trade in record highs, having so far risen to 31,117 on strong AI demand. A rise above this level may lead to the 100% Fibonacci extension of the April-to-October 2025 advance -  projected higher from the March 2026 low - at 32,481 being reached.

In case of a retracement lower being seen, the early June and 22 September highs at 30,770-to-30,762 may act as support, ahead of the 22-to-25 September highs at 30,667-to-30,643.

Short-term outlook: bullish while above the 28 September 30,081 low

Medium-term outlook: bullish while above the 16 September low at 28,753

Nasdaq 100 daily candelstick chart

USD/JPY tests downtrend line

USD/JPY's recovery from its ¥152.88 early September low is grappling with the July-to-October downtrend line at ¥158.08, the 200-day simple moving average (SMA) at ¥158.47 and the 1 October high at ¥158.45. If overcome, the late September high ¥159.04 would likely be next in line. A rise above this level may lead to the mid-August-to-early September highs at ¥159.78-to-¥160.39 also being reached.

Were the early October low at ¥156.95 to be slipped through, though, last week's low at ¥156.38 would be expected to be revisited instead. Further down lies good support around the early August ¥155.23 low.

Short-term outlook: bullish while above the 30 September low at ¥156.38

Medium-term outlook: neutral with a bullish undertone while above the 8 September low at ¥152.88

USD/JPY daily candlestick chart

Brent crude comes off resistance zone

Brent Crude is seen coming off its $107.22 per barrel 24 September high which has been acting as resistance since last week. Were it to be exceeded on a daily charet closing basis, the September peak at $111.45 could be retested, though.

As long as the $107.22 level caps the upside, a slip towards the 22-to-30 September lows at $98.86-to-$98.05 is expected to occur. Together with the July-to-October uptrend line at $99.26 this area is expected to act as a support zone. In case of it giving way, another down leg may take Brent crude towards the July-to-August highs at $96.19-to-$95.48.

Short-term outlook: neutral with a slight bearish bias while below the 24 September high at $107.22 and above the 22 September low at $98.05

Medium-term outlook: neutral with a bullish undertone while above the 4 September $95.16 low

Brent crude daily candlestick chart