Stocks decline amid tech selling, USD consolidates

On Thursday, the Bank of England surprisingly raised interest rates for the first time since the pandemic started, and the European Central Bank reduced its Pandemic Q.E. but upped its normal Q.E. to 40 billion EUR a month.

"A cautious ECB taper and a surprise BOE hike likely leaves the dollar index heavy near-term, especially given lopsided long dollar positioning into year's end," Westpac analysts said in a note. 

However, the support in the 95.50 - 95.00 zone for the dollar index should be defended as the U.S. Federal Reserve is "streets ahead" of the ECB regarding the tightening cycle. 

On the EURUSD chart, the significant resistance is in the 1.1520 zone, and if the euro jumps above it, the medium-term outlook could change to bearish for the U.S. dollar.

From other news, U.S. stocks dropped sharply yesterday, with Apple falling more than 3% and Tesla was observed 5% lower as Elon Musk continues to sell his shares. Tesla dropped to three-month lows below 930 USD, signaling a bearish trend has started, possibly dragging equity indices lower.

Later in the day, German IFO indices for December are due, expected to decline from November levels amid more COVID restrictions.

Elsewhere, precious metals are enjoying a short squeeze rally as both gold and silver headed into the FOMC decision notably oversold, and metals usually rise after Fed's decisions. However, nothing changed in the long term, and they remain stuck in their consolidation ranges.