The Nasdaq 100 index is having one of its worst periods in a long time as it is down six days in a row, losing 0.6% during the London session after dropping more than 2% yesterday.
It is now testing the 50-day exponential moving average at around 13,150 USD, and if this support is taken out, further losses below 13,000 USD could occur.
Later in the day, the Federal Reserve Chair Jerome Powell is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee. Considering the spiking US yields, Powell is expected to sound really dovish (as Lagarde did yesterday) to calm down the markets. If he fails, a steeper correction in indices might be upon us.
It looks like inflation will start going higher over the next months, judging from the recent run in most commodities. Therefore, bonds do not appear as a solid investment in an inflationary environment.
Additionally, the Bank of Canada Governor Tiff Macklem is due to speak at the Edmonton Chamber of Commerce & Calgary Chamber of Commerce, possibly making the USDCAD pair volatile.
Moreover, the Reserve Bank of New Zealand’s monetary policy decision is due later in the evening, which always influences the NZDUSD pair and other NZD crosses.