Monday's Muted Macro
23 October 2023
Welcome traders to a brand new week. It's Monday, and typically, Mondays are abuzz with anticipation for the week ahead. But today, our macro calendar is surprisingly bare, reminiscent of those quiet streets on a Sunday morning. But let's not be fooled – while the calendar might be taking a breather, there's plenty of buzz elsewhere.
The winds of the Middle East are carrying stories and speculations, ones that traders will likely tune into. But, given the silent calendar, many will also huddle around their charts, deciphering the technical stories they narrate. So, what whispers are the markets sharing today?
As dawn broke over the currency markets, there was an intriguing shuffle. The Swiss Franc, often the stoic figure, was showing signs of weariness during the late Asian hours. Meanwhile, the Australian and New Zealand dollars – the antipodean duo – were strutting around with newfound vigor, which, given their lackluster performance last week, is quite the plot twist.
EURUSD, that age-old saga, is currently playing a waiting game, dancing sideways, teasing both the bulls and the bears. Eyes are glued to the 1.061 mark – will it break in favor of the bulls, or will the mid-term uptrend line coax the bears into action? Then, there's the USDCHF dance, where the weakened Swiss Franc has set the stage for a possible bullish reprise, especially after the bear's three-week-long solo.
Switching the spotlight to indices, it's like watching a thriller. Last week's grand finale was, frankly, tragic. The stage was dominated by three formidable bearish candles, casting shadows on indices across the board. The S&P 500 seems drawn to the 38.2% Fibonacci, like a moth to a flame. The Dow Jones, meanwhile, is in a sharp descent, eyeing the 32,900 horizon. NASDAQ, not to be outdone, is inching closer to the pivotal 14,440 point, and the DAX, too, is making a beeline for its own 38.2% Fibonacci rendezvous. In short, the indices are painting a somber picture.
Yet, every market story has its intermissions. Precious metals, after lighting up October's stage, are taking a modest bow, perhaps catching their breath before the next act. Oil, after its bearish Friday gig, continues to play the same tune today. But, if you're looking long-term, oil seems to be humming a more optimistic melody.