Indices Start with Caution: Nasdaq and DAX Signal Bearish Tendencies

Welcome, traders, to the start of a new week. Although Monday is presenting itself with a barren calendar – absolutely devoid of significant data – the financial markets are nonetheless showing some compelling movements that are worth dissecting.

In the forex arena, the spotlight is shared by the American Dollar and Japanese Yen, both trading as the market’s highfliers just ahead of the European session’s opening bell. At the polar opposite, we have the Australian Dollar, New Zealand Dollar, and British Pound – all lagging with a seemingly subdued performance. The USDJPY currency pair, in particular, has traders on the edge of their seats as it hovers around the pivotal 145 horizontal resistance level. This region had previously dictated the pair’s trajectory – acting as resistance in June, then oscillating as a key support in October, before reverting as a significant resistance in September 2022. Its significance is further amplified by its stature as a psychological threshold, sparking speculations and whispers about potential interventions from the Bank of Japan.

Meanwhile, the EURUSD is experiencing downward pressures, gravitating towards monthly lows. The current technical landscape suggests that we might see a continuation of this bearish momentum. The NZDUSD, after transgressing a pivotal long-term uptrend line, is treading southwards, marking its weakest point since November 2022.

Shifting our gaze to the stock markets, indices seem to be starting the week with caution, if not outright skepticism. Nasdaq futures, for instance, just etched new monthly lows – levels unseen since the early days of July. The DAX too is charting a bearish path and is poised to test a crucial horizontal support at 15,700 points in today’s trading session.

On the commodities front, it’s not sunshine and roses either. Both gold and silver are showing inclinations towards the bearish side, with the possibility of charting new mid-term lows. But perhaps the most intriguing developments are unfolding in the oil markets. Both WTI and Brent are witnessing a pullback from their respective resistance levels at $83 and $88 per barrel. After a stellar July, the middle of August seems to be ushering in a corrective phase for oil, a trend that could potentially sustain over the coming days.

In conclusion, while today’s calendar may be on the lighter side, the markets are anything but quiet. With Tuesday and Wednesday poised to bring in significant data points, traders are advised to remain vigilant and responsive to the evolving technical and fundamental narratives.

Source: https://www.axiory.com/analytics/market-news/indices-start-with-caution-nasdaq-and-dax-signal-b