Tech Fuels Tuesday Surge in Indices: The Aftermath for the Dollar and Commodities
30 August 2023
Tuesday's market was nothing short of electrifying, with a rally led primarily by the tech sector pushing the indices to notable highs. NASDAQ outperformed, surging by 1.7%, while the S&P 500 wasn't far behind, gaining 1.4%. Dow Jones, too, managed to add a little over 0.8% to its tally. These gains aren't just numbers; they represent significant shifts in the market's technical landscape.
Starting with Dow Jones, the index reclaimed ground above the 34,500 points level, reinforcing this move with a compelling bounce off its long-term uptrend line. This bullish behavior sends a powerful buy signal to the market. NASDAQ is equally noteworthy. It broke a mid-term downtrend line, effectively negating a previously threatening head-and-shoulders formation. Germany's DAX followed suit, scrambling back above its uptrend line in a move that can only be described as positive.
As for the currency landscape, the dollar was the undisputed laggard yesterday. Although it showed some signs of recovery today, the damage has been done. EURUSD, for example, has moved back above the neckline of its triple-top formation, effectively negating any sell signals. USDJPY experienced a sharp reversal, suggesting a bearish correction may be on the horizon. USDCHF, too, is seeing reduced momentum and appears to be on the brink of breaking its wedge pattern to the downside.
Shifting our focus to commodities, silver reclaimed its ground above the key $24.5 resistance level. Oil markets were also vibrant, with WTI aiming for $83 per barrel after completing its falling wedge pattern. Brent crude has likewise broken its downtrend line and is eyeing $88 per barrel.
Despite significant economic data releases, including CB Consumer Confidence and JOLTS job openings from the U.S., markets seemed largely indifferent to less-than-stellar results. With today's calendar packed with indicators like Spanish and German inflation and the U.S. ADP nonfarm employment change and Prelim GDP—expected at 2.4%—it remains to be seen how the market will react.