Dow Jones Hits New Peaks while NASDAQ Faces Hurdles
01 December 2023
Yesterday's trading session was marked by significant movements in the currency and commodity markets, influenced by key economic data releases. The Eurozone's inflation figures were lower than anticipated, with core CPI recorded at 3.6% and CPI at 2.4%, leading to a weakening Euro. This was a critical development, signaling potential adjustments in the European Central Bank's monetary policy approach. Consequently, the Euro experienced a notable decline against major counterparts, particularly noticeable in pairs like EURGBP and EURCHF.
In Canada, GDP figures came out slightly better than expected at 0.1%, providing a modest boost to the Canadian Dollar. This was in contrast to the Australian Dollar, which faced a downturn earlier in the week following Australia's lower-than-expected inflation data.
Thursday also shed light on China's manufacturing sector, where PMI numbers came in red, indicating a contraction. This data added to the growing concerns about the global economic slowdown and its impact on markets worldwide.
As for the American market, the GDP figures released on Wednesday showed a higher than expected growth rate at 5.2%, painting a somewhat positive picture of the US economy amidst global economic uncertainty. However, the market's reaction was mixed, reflecting the complexity of the current economic environment.
Today, the market's attention turns towards the US with the release of ISM manufacturing PMIs. A figure above 50 would indicate expansion, potentially reinforcing the strength of the US economy. Additionally, Federal Reserve Chairman Jerome Powell's speech is highly anticipated, as investors seek clarity on the Fed's future policy direction, particularly in light of the recent GDP data.
On the technical front, indices like the Dow Jones and DAX have shown remarkable strength, with Dow Jones reaching its highest level since January 2022. However, NASDAQ appears to be under pressure, threatening key support levels that could signify a shift in market sentiment if broken.
In the commodities market, silver has been a standout performer, approaching a critical juncture at the upper boundary of a long-term symmetric triangle pattern. A breakout here could trigger a significant bullish move. Conversely, oil's initial positive momentum this week was halted by a sharp reversal on Thursday, reintroducing a bearish sentiment and casting doubt on the sustainability of its recent gains.