Four reasons for market volatility on S&P 500 & Nasdaq – Forex trading EUR/USD on US CPI and PPI [Video]

In today’s Market Outlook, let’s take a look at Forex Trading on the Gold, XAUUSD, Silver, XAGUSD, EURUSD, the S&P500 and the NASDAQ.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

In the first video of the year, I suggested that we would be in for surprises and volatility, and we got that yesterday.

What lessons did we learn?

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Firstly, we pointed out that the Dow Jones Industrial Average and the Russell 2000 were ahead of the NASDAQ and the S&P500.

As expected, the latter 2 caught up, so keep an eye out for discrepancies like this in the future.

So, why did we get such volatility yesterday on all the indices?

Well, bizarrely, the current US Administration is trying to press unfounded, ridiculous charges against Jerome Powell, the chair of the Federal Reserve.

News like this spooks investors and traders, and even algorithmic trading sold off.

Also, bad news causes bond yields to jump, which always causes equities to fall.

When prices hit a key level, investors and traders bought the dip.

A firm statement by Jerome Powell also went a long way to allaying any fears or panic selling.

This V-shaped price action is common for this type of fundamental event.

You will also note that the technicals gave us clues along the way.

Speaking of the US Fed, they and everyone else will be watching American CPI today and PPI tomorrow.

These are key data for inflation, which will guide the next decisions on Interest Rates on 29 January.

This volatility and this week’s news will also affect USD, and we will be watching pairs like EURUSD, where we have clear trend lines.

USDCHF, where USD is the base currency and trending up.

And NZDUSD, where we have a clear downtrend, but mixed technical indicators.

And, we could not leave it here without talking about gold and silver with XAUUSD at record highs…again.

Many analysts believe that gold could hit $5,000 ,but keep an eye on the news.

As we all know, gold is a safe haven during times of global uncertainty and geopolitical events.

That’s all for now.

CFDs and FX are leveraged products, and your capital may be at risk.

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