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Reaction so far only partially following the script (Gold up, oil up, USD up but US bond yields up, stocks initially down but then recovered depending on sector) but it is still early in this crisis.
In our blog
Geopolitical Crisis and Market Impact: Oil, Inflation, and Safe-Haven Flows in Focus
US500 (SP500) UPDATE
- A lot of head scratching in equities followinbg the whipsaw turnaround
- For the rebound off a 6760 low to have legs, 6905-15 would need to be taken out.
- Otherwise, it is back to headline watching and the reaction to news.
- In any case, suggest taking it one day at a time.
US500 1 HOUR CHART
NAS100 (NASDAQ) UPDATE
- Tech trying to throw equities a lifesaver with a test of 25050 but during this geopolitical crisis, suggest taking it one day at a time.
- With that said, 25000 is again in the spotlight with a firm move above (specifically 25050+) needed to cool the downside risk, for one day at least should such a move occur…
NAS100 1 HOUR CHART
One Source of Strength in the Markets Today: Tech Stocks
Nvidia, Palantir and long-suffering Intuit were among the biggest gainers Monday as investors set aside tech fears.
While some traders spent the morning trying to digest the fallout of U.S. attacks on Iran over the weekend, others found value in tech. By lunchtime, the tech-heavy Nasdaq was up 0.3%, while the S&P 500 and Dow Jones Industrial Average were more or less flat.
DAX Index
Frankfurt’s DAX 40 closed about 2.6% lower at 24,672 on Monday, the lowest since early February and underperforming its European peers.
Investors continued to assess the economic fallout from the Middle East conflict, particularly the risk of disruptions to energy supply chains and the potential impact on global economic stability.
This could translate into a new inflationary surge, undermining forecasts so far of potential rate cuts by the Federal Reserve and the European Central Bank.
Among the hardest-hit companies were travel and tourism stocks, pressured by flight cancellations to the Middle East and soaring oil prices.
NZDUSD(4HR)
Similar to AUDUSD, the New Zealand dollar initially fell to 0.5948 before trimming its losses to trade just 0.2% lower at 0.5935. The pair is holding near support at $0.5930, though this key level is beginning to look vulnerable as the four-hour candle approaches its close. Price briefly dipped below support earlier, but buyers quickly stepped in to push it higher, although, only for a bit as the price is still bearish
Overall, unlike the Australian dollar, NZDUSD appears to be yielding to mounting downside pressure. The pair remains under negative, dynamic resistance, reflected in its continued trading below the 50-period EMA, which reinforces the bearish bias in the near term.
AUDUSD(4HR)
The Australian dollar began the week with a bearish price gap, falling as much as 1.2%. Although the initial reaction has since eased, volatility remains elevated. Despite the sharp move, the pair continues to trade within its established channel, hovering around 0.7075. The currency has posted gains for seven consecutive weeks, with the February high of 0.7146 acting as near-term resistance.
Attention now turns to a speech by Reserve Bank of Australia Governor Michele Bullock, in approximately three hours, which could provide further direction for the currency.
XTIUSD (WTI)
- Typical of geopolitical crisis markets price in an extreme outcome early and then reassess.
- In this case, it’s too early to say the worst case is factored in so watch $70 (per bbl) as a key pivotal indicator level (keeps a bid while above it).
- Chart shows 69.38, the gap and trendline below it.
- Key resistance is the 75.02 high.
XTIUSD 1 HOUR CHART
XAUUSD (GOLD) Update
- XAUUSD has followed the risk mood with a retreat from its 5419 high as US equities recovered overnight losses and crude oil backed off its highs.
- This has seen XAUUSD fill its opening gap and with next support still a distant away at 5166, use the trendline as key support.
- XAUUSD now needs to stay above the trendline to keep a bid BUT no stops on the upside until above 5419.
XAUUSD 4 HOUR CHART
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