Stocks reversing losses, USD falls on Tuesday

Volatility continues to be elevated in the stock markets, but the Forex market remains calm as the USD declines slowly this year.

The Nasdaq 100 index posted a massive bullish pin bar yesterday, likely ending the bearish pressure. Therefore, a rebound rally is expected over the following days. The resistance is now near 15,700 USD, with a successful break above possibly pushing the index toward 16,000 USD.

Later in the day, Federal Reserve Chair Jerome Powell will testify on the renomination to chair the Federal Reserve Board of Governors before Senate Banking Committee in Washington DC. His comments regarding monetary policy will be closely watched as the Fed has turned notably more hawkish than previously anticipated.

Recently, Goldman Sachs Goldman Sachs predicted that the Federal Reserve would hike interest rates four times this year after the latest FOMC minutes suggested that governors are considering moving faster to deal with rising inflation.

Additionally, this week’s central focus remains on Wednesday’s US CPI data, expected to jump above the 7% threshold, prompting the Fed to hike rates. In Europe, the CPI has reached a record high above 5%, but the ECB has reiterated market participants that it would not raise rates this year. 

Elsewhere, the USD has been weaker against significant counterparts today, with the GBPUSD pair pushing above 1.36 for the first time since early November, while the EURUSD pair moved to 1.1350. It looks like the USD might have topped out, and a retrace seems likely, considering the unwillingness to move higher recently. 

Weaker USD has boosted precious metals, with gold rising above 1,800 USD and silver trading above 22.60 USD during the London session. 

Source: https://www.axiory.com/analytics/market-news/stocks-reversing-losses-usd-falls-on-tuesday