Nasdaq 100 recovers as USD/JPY probes key resistance amid oil price spike
Technical analysis of the Nasdaq 100 as it recovers while USD/JPY probes key resistance amid another oil price spike towards the $100 mark.
Macro update
Oil tops $95 after attacks on Gulf shipping:
Brent crude oil surged about 8% to around $95 a barrel after Iranian strikes on vessels and disruption at Iraqi export terminals heightened fears of a major supply shock.
Asian equities retreat as risk sentiment weakens:
MSCI Asia-Pacific ex-Japan fell roughly 1.6%, with Japan’s Nikkei 225 down 1.5% and Hong Kong’s Hang Seng losing about 1.2%, while US and European futures also signalled further declines.
Strategic reserve release fails to soothe markets:
The International Energy Agency announced a record release of 400 million barrels from strategic reserves, including 172 million from the US, but traders remained focused on escalating conflict and shipping disruptions.
Inflation concerns lift bond yields:
Higher energy prices pushed US 10-year Treasury yields to around 4.25% as investors worried that oil-driven inflation could keep global borrowing costs elevated.
Rate-cut expectations scaled back:
Markets reduced expectations for Federal Reserve easing this year, while traders began factoring in the possibility that the European Central Bank (ECB) could raise rates as early as June.
Dollar firms as energy importers’ currencies weaken:
The US dollar remained near 2026 highs as the euro, Japanese yen and sterling slipped, reflecting concerns that higher oil prices will weigh more heavily on energy-importing economies.
Nasdaq 100 recovers
The Nasdaq 100 is expected to revisit its January to March downtrend line at 25,134, a rise above which and Tuesday's high at 25,189 would put the 11 to 25 February highs at 25,343 - 25,382 on the map.
Minor support may be found at Wednesday's 24,857 low.
Short-term outlook:
Bullish while above the 11 March 24,857 low.
Medium-term outlook:
Neutral while above the 9 March low at 24,289; failure there would turn the forecast bearish.
Nasdaq 100 daily candlestick chart
USD/JPY puts pressure on resistance zone
USD/JPY's advance has taken it to its 23 January ¥159.22 high which, together with the ¥159.45 mid-January peak, is acting as resistance.
Were the resistance zone to be breached, the psychological ¥160.00 region with the ¥160.16 - ¥160.21 April 1990 to April 2024 highs may be reached.
Support may be found between the February, 3 and 6 of March highs and along the February to March uptrend line at ¥158.10 - ¥157.72.
Short-term outlook:
Bullish while above the 10 March ¥157.28 low.
Medium-term outlook:
Neutral with a bullish bias while above the 5 March low at ¥156.46.
USD/JPY daily candlestick chart
Brent gaps higher
Brent crude oil saw another spike, this time by around 8% to $98.49 per barrel, amid fears of prolonged supply disruptions. While no rise above Thursday's high is seen, though, a retracement to Wednesday's high at $91.58 may ensue. Support sits between this level and the 6 and 10 March highs.
Were a rise above $98.49 to be seen, the 11 May 2022 low at $100.68 would be eyed and perhaps also the area between the February 2022 high and the March 2022 low.
Short-term outlook:
Bullish while above the 10 March $79.74 low.
Medium-term outlook:
Bullish while above the 10 March low at $79.74.
Brent crude oil daily candlestick chart
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