Nasdaq 100 rallies on rate cut expectations while EUR/USD, WTI stabilise
Technical analysis of the Nasdaq 100 as it rallies on Fed rate cut expectations while EUR/USD, WTI stabilise.
Macro update
Tech stocks drive Asian rebound:
Asian markets advanced as investors rotated back into global tech names, helping the MSCI Asia Pacific ex-Japan claw back some of last week’s 4% decline.
Rate-cut expectations jump:
Dovish remarks from Federal Reserve (Fed) governors Waller and Daly pushed market odds of a December quarter-point cut above 80%, though the impact on Treasury yields and the dollar was limited.
Yen stays under pressure:
The yen remained near a 10-month low, with traders watching for potential intervention as the currency trades close to ¥160.00 per dollar.
Geopolitics back in focus:
Trump briefed Japan’s Prime Minister Takaichi following his call with President Xi, easing tensions after recent comments on Taiwan and signalling further improvement in US-China relations.
Europe set for softer start:
Futures indicate modest declines at the open, with concerns over stretched AI valuations and subdued risk appetite lingering from last week.
Commodities mixed:
Brent crude oil and WTI crude oil edged lower, while gold held steady near $4,138.00 an ounce.
Nasdaq 100 rallies
The Nasdaq 100 rallied on increased Fed rate cut hopes and is about to hit its 55-day simple moving average (SMA) at 24,961.
Further up beckon the November resistance line at 25,108 and last week's high at 25,223. A rise above this level would re-instate a bullish play.
Support can now be found between the 22 October to 7 November lows at 24,652-to-24,604.
Nasdaq 100 daily candlestick chart
EUR/USD is seen stabilising
EUR/USD's slide from its $1.1656 mid-November high seems to be running out of steam above its $1.1649 early November low.
While this level underpins, further range trading seems to be at hand.
Failure at $1.1649 would likely engage the 22 October low at $1.1577, though, and perhaps also the early-to-mid-October lows at $1.1542.
A rise above the 21 November high at $1.1552 may lead to the 22 October low at $1.1577 being revisited.
For the bulls to be back in control, a rise and daily chart close above the $1.1656 high and the late October high at $1.1668 needs to be seen with the mid-October high at $1.1728 being eyed in this scenario.
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 $57.38 per barrel low whilst aiming for the late October low at $59.64.
If overcome, the downtrend line at $60.08 may be revisited.
Minor support sits at the mid-November $58.12 low.
From a longer-term perspective a bullish reversal and rally above the $61.50 early November 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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