6 Reasons for the NASDAQ Recovery. USD Rally Stalling on Bond Yields. WTI Crude in Symmetrical Pennant.

In today’s GCI Market Outlook, let’s take a look at Forex Trading on EURUSD, WTI Crude Oil, the S&P500, the Dow Jones Industrial Average, and the NASDAQ.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

We can all see the amazing rally of the US stock indices since the end of March, but we saw a minor pull-back starting late last week.

So, why did we get a rebound starting a couple of days ago?

Note that the first index to turn around was the Dow Jones Industrial Average, which consists of larger, more cash-generating companies than the other indices.

This gives us a big clue to the first reason that the investors suddenly developed a risk-on mood.

We mentioned earlier that US bond yields had gone up, which helped USD and hurt share prices.

Now that the surge in yields is slowing down, investors are going back to equities.

Again, when we see one index moving, either up or down, generally, the others will follow.

Secondly, the price of crude oil has retreated slightly this week, which, hopefully, will see a decline in inflation, but don’t hold your breath.

We see price action in a symmetrical pennant and some bearish technical signals.

This is still a fundamental trade, all about the Iran war and the Strait of Hormuz.

Thirdly, back to the indices, AI and tech stocks are back in vogue with lots of hype.

Fourthly, most large companies, including AI and Tech, are continuing to report strong earnings, which, simply put, means growth.

This investment is really noticeable in the NASDAQ and S&P500, which, as we pointed out, lagged behind the Dow Jones.

Also, Wednesday’s FOMC was reasonably neutral to optimistic, so investors and analysts did not get the doom and gloom and panic about inflation.

In other words, they feel that the economy is stabilising and investments are safe.

And finally, the sixth point, many investors had shorted the markets and short covering, buying back the stocks they had sold, helped with the rally.

Looking at the big picture, the Dow Jones Industrial Average is very close to all-time highs, well over 50,000.

The S&P500 is rallying, as mentioned, but has room above to get to the all-time highs.

The same with the NASDAQ.

If we look at price action on EURUSD, we see the rally in USD slowing down along with some bullish technical confluence.

This is typical of most USD pairs, so please take a look at the other major USD charts.

Keep in mind that Monday is a holiday, and most major markets will be closed.

That’s all for now.

CFDs and FX are leveraged products, and your capital may be at risk.