Nasdaq 100 keels over while EUR/USD recovers and WTI stays sidelined
Nasdaq 100 keels over while EUR/USD recovers and WTI stays sidelined amid Moody’s US credit rating downgrade.
Nasdaq 100 is expected to slip
The Nasdaq 100 is expected to come off last week's 21,443 high and fall through Thursday's 21,168 low amid Moody's downgrade of the US' long-standing triple-A credit rating to Aa1 on Friday.
Potential downside targets are the 21,073-to-20,975 late January-to-early March daily lows and highs ahead of the April-to-May uptrend line at 20,793.
Were last week's high at 21,443 to be exceeded, the early January high at 21,703 would be next in line.
EUR/USD tries to recover
EUR/USD continues to sideways trade but on Monday is trying to head higher towards its April-to-May downtrend channel resistance line and last week's high at $1.1248-to-$1.1265.
If overcome, the 23 April low at $1.1308 would be next in line.
The above scenario will remain in play while Friday's low at $1.1131 underpins. If not, the 55-day simple moving average (SMA) at $1.1082 and perhaps also the current May low at $1.1066 may be revisited instead.
WTI remains sidelined
The WTI crude oil price's recovery from its early May $55.39 per barrel low, made close to the 4-year April $55.15 low, has taken it to last week's high at $63.86 before giving back some of its gains amid a potential nuclear agreement between the US and Iran. This development lead to the possibility of lifting US sanctions on Iranian oil exports, which could introduce a substantial increase in global oil supply, thus exerting downward pressure on the oil price.
For now, WTI range trades above last week's $60.11 low but below its April-to-May resistance line at $62.73.
A fall through the recent $60.11 and also the mid-April $59.90 lows could lead to the April-to-May lows at $55.39-to-$55.15 being retested.
A break through the resistance line at $62.73 would put last week's high at $63.86 back on the cards.
A rise above this level would probably engage the key $64.13-to-$65.32 resistance area which consists of the 55-day SMA, September 2024 and March 2025 lows as well as the 23 April high. As such it is expected to withstand its first test at the very least.
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