Daily Market Report

U.S. stocks marked another positive start to the week ahead of the upcoming FED interest rate decision. All major stock market indexes closed higher on Monday with the DOW registering its longest winning streak in six years. The 30-stock index rose for the 11th consecutive day adding 0.52%. In the meantime, the S&P500 climbed 0.40% and the Nasdaq composite gained 0.19% after last week’s decline. Investors also await a set of corporate earnings from big names like Microsoft, Alphabet, and Meta which are due to release their quarterly financial results today and tomorrow.
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Looking at the FX market, the U.S. Dollar extended its advance following the recent sell-off seen during the past days, however, traders remain cautious about the future of the FED’s monetary policy and are likely to wait for more evidence during the FOMC meeting on Wednesday. In Europe and the UK, we have seen a clear slowdown in the manufacturing sector as both manufacturing and services PMI figures came out below expectations which weighed negatively on both the Euro and the British pound against the U.S. Dollar. EURUSD pair was down 60 pips settling near the 1.1065 level while GBPUSD closed lower testing the 1.2800 psychological support. Technically, the next support zone from the Euro stands between the 1.1000 and 1.0950 levels while an important demand level for the Sterling is located at the 1.2750 and can provide support to prices if reached in the coming hours as per the chart below.
In the commodity market, gold extended its decline as the selling pressure remains intact. As we mentioned in our previous reports, the gold trend has turned sideways in the near term, and we will be waiting for a clear break either below the 1945 support or above the 1987 resistance level in the coming days before confirming the next direction move in the yellow metal. However, when looking at the higher time frames we can see that the main trend is still bullish, therefore, prices are expected to remain supported while above last week’s low. A successful breakout above the resistance mentioned above is likely to clear the path for an extension higher in the direction of the $2000 psychological barrier. On the flip side, a daily close below the 1945 level is needed for a potential correction that can reach the 1935-1925 support zone before another rally begins.
As of today, market participants will be waiting for the release of the CB consumer confidence index from the U.S. which is expected to have risen from 109.7 to 112.1. Moreover, the monthly reading of the House price index (HPI) is due to decline from 0.7% to 0.6%. Later during the day, the Australian Dollar is likely to witness increased volatility at the moment of the release of the consumer price index which measures the latest change in inflation data from Australia.

Economic Analyst
Amine Hiani

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