The US dollar weakened as yields fell after U.S. inflation data came in lower than expected. This led to a surge in EUR/USD and GBP/USD to multi-week highs. Gold and the Nasdaq 100 also saw gains, flirting with critical technical levels. Traders are now pricing in aggressive rate cuts for 2024, with the market moves potentially gaining traction and consolidating in the near term.
The U.S. dollar slumped due to falling yields after weaker-than-expected U.S. consumer price index data. This resulted in the DXY index plummeting over 1.5%, its worst daily performance since November 2022. Against this backdrop, the euro and British pound reached multi-week highs against the dollar. Gold prices also gained, consolidating above the 200-day simple moving average, and the Nasdaq 100 hit its best levels in almost four months.
EUR/USD soared, breaking resistance levels and the 200-day simple moving average. Momentum suggests potential upward movement with a target near 1.0960. Failure to maintain gains could lead to support levels around 1.0840 and 1.0800.
GBP/USD also surged, surpassing the 200-day simple moving average and breaching the 38.2% Fib retracement. If this bullish move is sustained, buyers could push towards the 50% Fib retracement at 1.2591. Conversely, sellers might find initial support around 1.2460 and 1.2450.
The Nasdaq 100 rallied over 2.2% on the back of falling U.S. yields. Resistance levels to watch include the July highs near 16,067. Initial support is located at 15,720, with further support at 15,500/15,400.
Gold executed a bullish reversal after bouncing off support at $1,940/$1,950. Upside clearance towards $1,975/$1,980 could open the door for a rally towards $2,010/$2,015. However, a breakdown could lead to a drop towards $1,920 and $1,900.
This piece focuses on technical analysis for EUR/USD, GBP/USD, the Nasdaq 100, and gold prices. For further insights on market forecasts, trading guides for equities, EUR/USD forecasts, and gold forecasts are available.
