The Nasdaq 100 index erased the whole decline yesterday and posted what looks like a daily pin bar. In this case, it is a strong bullish formation, possibly leading to higher prices over the next few days. However, no formation is 100% certain.
On the other hand, the Dow Jones index dropped 500 points on Tuesday, marking the worst day since February.
Precious metals followed the Nasdaq index very closely - they managed to erase the huge daily decline to close higher. However, the selling returned today, with silver down 1% and gold losing 0.4% during the London session.
From other news, the UK GDP contracted 1.5% in the first quarter as the country’s government took the first steps to exit the Covid-19 restriction measures only in early March.
Later in the day, the biggest focus will be on the US CPI. The yearly change is expected to soar to 3.6% from 2.6% in March, while the core inflation is seen rising from 1.6% to 2.3%. Both benchmarks will be comfortably above the Fed's 2% target. Volatility will most likely be very high.
Lower inflation readings than expected might be bullish for stocks, precious metals, and bonds, while higher readings will most likely be bearish for the mentioned instruments.