Dow dances with 34500
29 August 2023
Welcome back to our Tuesday market breakdown. A subdued air has settled over the markets, punctuated only by the mild flutterings on the indices charts. But before we dive deep into the day's trading patterns, let's set the scene with today's macroeconomic agenda.
On the U.S. front, anticipation hangs heavy as we await the CB Consumer Confidence figures, with projections placing it at a somber 116. Additionally, JOLTS job openings, slated to be unveiled later, are forecasted to settle at 9.49 million. Should these figures bear out, they will be a downturn from previous readings, potentially signaling a subtle softening in the American labor market and consumer sentiment.
Transitioning our gaze to indices, Monday's proceedings bore witness to some compelling reversals. The Dow Jones, in particular, emerged as the showstopper, elegantly rebounding off its long-standing uptrend line. Currently, it's embroiled in a tussle with the formidable horizontal resistance at 34,500 points. A successful breach above this line could unleash a fresh bullish wave. Over in the tech-driven NASDAQ, price patterns hint at the formation of a right shoulder in a head and shoulders chart pattern. Yet, its recent northward foray away from the neckline may signal a potential cancellation of this bearish formation. Germany's DAX too seems to be mirroring a similar pattern but with a bullish tint, as it retreats from its key horizontal support.
Venturing into the currency corridors, Monday crowned the Australian dollar, euro, and British pound as the dominant forces. In stark contrast, the Japanese yen and the New Zealand dollar languished in relative inertia. Fast forward to today, and the American dollar, Japanese yen, and Swiss franc are grappling with bearish undercurrents. Meanwhile, the Australian dollar, New Zealand dollar, and the British pound have risen to the occasion, exhibiting notable strength. EURUSD finds itself at a critical juncture, teetering on the neckline of a triple top formation, a decisive moment that could redefine its trajectory. Simultaneously, NZDUSD appears to be in a skirmish to preserve its foothold at the 61.8% Fibonacci level; its failure to do so could beckon sellers.
Shifting the spotlight to commodities, gold is making a spirited bid to ascend as the month draws to a close, looking to neutralize the bearishness that shrouded it last week. Silver, its precious counterpart, is in hot pursuit, aiming to reclaim its monthly zenith.