In today’s Market Outlook, let’s take a look at Forex Trading on NZDUSD, GBPUSD, Gold, XAUUSD, Silver, XAGUSD, Brent Crude Oil, WTI, the Nikkei225, the FTSE100, the DAX40, the NASDAQ, and the S&P500.
From a technical point of view, we see all the US indices with inverted hammer and bullish engulfing candles, and we had a strong reversal.
From the fundamental point of view, the Iran ceasefire saw a huge amount of optimism, and investors bought back into the markets.
So, why didn’t the markets fall after the ceasefire fell apart?
Simply put, investors saw the ceasefire as hope that there is an end in sight and that the current administration will not follow through on its threats.
Hence, the TACO trade.
It looks like investors will wait it out…watch this space.
This may save the NASDAQ from its Death Cross status.
This is even better news for the European indices like the FTSE100 and the DAX, which had already reached Death Cross status.
What is interesting about the European indices vs the US is that price action opened with a gap to the upside.
This does not necessarily mean that we have a gap trade, but we will keep an eye on this.
We see the same situation in Asian indices.
Of course, price action on Crude Oil is the key commodity surrounding the Iran war and the proposed ceasefire talks this weekend.
We saw huge drops in price 2 days ago, but there is still a major question about safe passage for tankers through the Strait of Hormuz, affecting supply.
Also, is this a gap trade on Brent?
We may know by Monday.
We see the possibility of a buy trade on WTI with price action at the lower trend line while we wait for reversal signals from the stochastic oscillator and MACD.
Again, the technicals take a back seat to the fundamentals and the ceasefire talks this weekend.
Both Gold and Silver are creeping back up with price action at the lower trend lines.
Technically, the stochastic oscillator is looking bearish, but there are many reasons why gold is looking strong.
USD is weaker on the ceasefire news, with gold as a safe haven.Â
Many still see the situation in the Middle East as dangerous, so gold is being bought.
As I mentioned, USD is weaker against every other pair except JPY, with pairs like NZDUSD and GBPUSD being the big movers.
Let’s see what happens this weekend and how the markets open on Monday.
That’s all for now.
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