How Deep Can the Indices Dive Amidst Emerging New Lows?
04 October 2023
The trading landscape on Wednesday shadows a turbulent and introspective market, particularly as traders grapple with the reality of extended high rates and a discernible downturn that began unspooling in early August. Indices such as the S&P500 and Dow Jones have navigated into the territory of new long-term lows, while NASDAQ edges cautiously towards its September troughs, thereby casting a bearish shadow on market outlooks and allowing doubt to creep into traders’ minds.
Amidst this, commodities have opted for a cautious pause in their recent downswing, with gold continuing its descent, albeit with slightly reserved momentum, while silver's doji candle signals a current standstill in the buying-selling dynamic. Although oil has halted its downward spiral momentarily, it's prudent to avoid mistaking this for a potential reversal just yet, given the overarching market sentiments.
The US dollar, too, has hit a momentary pause, stepping back from its recent robust performance. Interestingly, the NZDUSD and AUDUSD pairs display attempts at minor upswings, hinting at a potential, albeit likely brief, correction for the dollar in the immediate future.
Navigating through a typically busy Wednesday, traders have already digested the unchanged 5.5 interest rate from New Zealand and now cast anticipatory glances towards a forthcoming speech from ECB President Lagarde. Moreover, the day’s latter half, punctuated by key US data releases such as the ADP Non-Farm Employment Exchange and ISM Services PMIs, holds potential to pivot market movements and perhaps offer fresh insights into the current trading conundrum.