I don’t necessarily think that this market is ready to take off to the upside, and I do anticipate that it is probably only a matter of time before we see sellers come back in and push this market lower.

• The NASDAQ 100 gapped lower to kick off the week on Monday but turned around to show signs of life.
• By doing so, it looks as if we are going to have a short-term relief rally.
• I don’t necessarily think that this market is ready to take off to the upside, and I do anticipate that it is probably only a matter of time before we see sellers come back in and push this market lower.

The 50 Day EMA sits at roughly 12,780, so I think it could offer a little bit of a technical barrier. Signs of exhaustion near that indicator could get me short because I think it might be a nice opportunity. The NASDAQ 100 is going to be very sensitive to a rate-tightening cycle, as so many of the market movers are high-growth companies. Because of this, the market will probably continue to see a huge correlation between rising rates and falling NASDAQ.

NASDAQ Likely to Bounce Back Despite the Noise

Pay attention to the usual 7 or 8 companies, meaning Tesla, Microsoft, Amazon, etc. Those companies move this market, and the other 93 or so don’t really matter most of the time. The market will continue to be very noisy, though I think it’s probably only a matter of time before the sellers come back in and push this market toward the 12,000 level. The Friday candlestick was massive, and it can 6 like that typically do not happen in a vacuum, and therefore I think it’s probably only a matter of time before those who suffered horrific losses that day will be looking to get out of the market as close to as breakeven as they can.

I continue to fade rallies, and I think we are now looking at the next move lower just waiting to happen. If we break down below the bottom of the candlestick on Monday without any type of retrace, that’s probably even more bearish, sending this market further down. Either way, I do not have any interest in buying this market until we can break above the recent high near 13,750. Until then, I’m very leery of rallies and I look at this as a market that needs to prove itself, especially after the tantrum that we saw on Friday. Position sizing will be crucial as usual, as we continue to see a lot of anxiety.

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This is a market that I am still bearish on, but I need to see a bit of a bounce before putting money to work.

• The West Texas Intermediate Crude Oil market pulled back initially on Wednesday to test the lows yet again.
• That being said, we have turned around to show signs of life, perhaps due to the idea of more risk-taking out there as the CPI numbers came out cooler than anticipated.
• The idea is that the Federal Reserve will not have to slow down the economy as much as one side, and that could lead to more demand for crude oil.

Rough Road Ahead

I’d be remiss if I did not push back on this idea, because quite frankly inflation is over three times what the Federal Reserve is comfortable with. In other words, although the CPI number was cooler than anticipated, the reality is that it is still far too high for the Federal Reserve to pivot. In other words, they are going to engineer a recession, although it doesn’t necessarily seem that they are going to have to try very hard as various indicators showed just how out of sync this economy is in the United States. As long as that’s going to be the case, then oil has a rough road ahead.

The 200-day EMA sits just above the $95 level, and I think that could offer quite a bit of resistance. I would be very interested in shorting this market on a negative candlestick, but we don’t have that set up yet, and I think at this point you need to look at this through the prism of a downtrend that has been in a nice channel for a while. We are simply in the middle of that channel, and I think at this point in time it’s very likely that we will continue to see sellers above. We don’t necessarily have that right now, but I think after a little bit of a bounce, it’s very likely that they will return, especially near the $95 level.

If we break down below the bottom of the candlestick for the trading session on Wednesday, that could open up quite a bit of selling pressure, sending the market down to the $85 level, possibly even the $80 level. Ultimately, this is a market that I am still bearish on, but I need to see a bit of a bounce before putting money to work.

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After trading near highs early this week not seen since the third week of June, the NZD/USD currency pair has started to look technically bearish again.

The NZD/USD is mirroring results seen in many Forex spheres the past two days of trading; suddenly the USD has gotten stronger again.  As of this writing the NZD/USD is trading near 0.62900, which is actually close to interesting resistance up above.

If the 0.63000 mark gets challenged and sustains value above, this could be taken as a sign by some technical traders that additional buying action may ensue. However, traders may want to remain realistic regarding their upwards targets and keep their ambitions rooted with solid risk management, including take profits that cash out winnings before the potential of downturns following.

USD/NZD may have additional territory to Explore Downwards in the Near Term

On the 2^nd of August the NZD/USD was trading fractionally higher compared to today, and the 0.63000 level started to become resistance technically.  Prior to this on Monday the 1^st of August the NZD/USD was traversing near the 0.63540 ratio before losing ground, the last time those highs were seen was on the 21^st of June. However, before traders become convinced the long term bearish trend of the NZD/USD is about to vanish completely, they should understand the global economic climate remains challenging. The sudden downturn of the NZD/USD may prove durable in the near term.

The Move Higher in the NZD/USD has lost Power and Resistance is beginning to Flourish

If the value of the NZD/USD remains under the 0.63000 level for a sustained amount of time today and head’s into tomorrow with tests of support levels, this could spur on further downside momentum. Traders hoping for reversals upwards should be willing to look for quick hitting positions.

From a risk reward scenario near term in the NZD/USD, there appears to be reasons to suspect nervous sentiment is again building, and a risk of more selling pressure could emerge. Traders may become nervous as ‘chirping’ from U.S Federal Reserve officials have been quick to point out this week they believe more interest rate hikes are needed, not only one more in September.

Technically if the 0.62790 mark begins to falter, additional selling may build which could create a quick test of yesterday’s ratios near the 0.62600 to 0.62500 to be exhibited. Traders should expect some volatility for the NZD/USD the next two days of trading as financial houses continue to search for equilibrium in rather unclear Forex conditions fundamentally, which are bound to cause choppy conditions.

NZD/USD Short Term Outlook

Current Resistance: 0.62998

Current Support: 0.62790

High Target: 0.63185

Low Target: 0.61940

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The pair’s outlook is still bearish, with the next key support level to watch being at 1.0400.

Bearish View

• Sell the EUR/USD pair and set a take-profit at 1.0400.
• Add a stop-loss at 1.060.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.0550 and add a take-profit at 1.0650.
• Add a stop-loss at 1.0.480.

The EUR/USD pair dropped sharply as investors reacted to the hawkish interest rate decision by the European Central Bank (ECB) and the strong US inflation data. It dropped to a low of 1.0475, which was the lowest level since May 19^th.

Fed Decision Ahead

The US dollar strengthened while stocks tumbled after data showed that American inflation was still surging. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation rose from 8.3% to 8.6% in May. This figure was higher than the median estimate of 8.1% and it was the highest level in over 40 years.

The strong inflation data happened mostly because of the rising prices of energy and food prices. The price of most food items like eggs, milk, and meat has jumped by more than 10% in the past 12 months. At the same time, the cost of energy has also jumped sharply. During the weekend, Gass Buddy’s average of gasoline prices jumped to $5 for the first time on record.

These numbers came a day a week after the US published strong jobs numbers. The data revealed that the country’s unemployment rate remained at 3.6% in May as the economy added over 390k jobs. The participation rate remains strong.

Therefore, analysts believe that the Federal Reserve will continue tightening its monetary policy as planned in a bid to fight the soaring inflation. The Federal Open Market Committee (FOMC) will start its meeting this week and deliver a 0.50% hike. Some analysts are even pricing in a 0.75% rate hike.

The EUR/USD also declined as investors focused on the interest rate decision by the European Central Bank. The ECB left rates unchanged and signaled that it will start hiking in the coming month.

EUR/USD Forecast

The EUR/USD pair declined to the lowest level since May 19th after the latest consumer inflation data. It fell to a low of 1.0475 and managed to move below the symmetrical triangle pattern shown in black. The pair has also dropped below the 23.6% Fibonacci retracement level. At the same time, it has moved below the 25-day and 50-day moving averages.

Therefore, the pair’s outlook is still bearish, with the next key support level to watch being at 1.0400. A move above the resistance level at 1.0550 will invalidate the bearish view.

AVAX/USD has fallen to fresh lows in early trading, and it is now pressed up against important mid-March support which should be watched.

After moving above 90.55000000 on the 8^th of March and acting like it may challenge a higher price range seen in late March and early April, AVAX/USD has turned downward. The trend being generated in Avalanche is mirroring the results of most other major cryptocurrencies, and the downturn in AVA/USD is approaching important support levels which may make speculators nervous.

Only one week ago, dips in AVAX/USD could have been interpreted as buying opportunities by bullish technical traders.  And some speculators still may feel that way, but the onslaught of lower moves seen the past week have been strong and unfortunately for some traders perhaps going into today’s trading session, price velocity down has quickened. Suddenly, AVAX/USD is near important junctures last sincerely tested on 18^th of March.

Support which is nearby at the 78.7500000 should be watched. If this level begins to look vulnerable this could set off alarm bells among not only bullish traders who may feel the ‘expensive’ heat of a downward trajectory, but could indicate a stronger tide lower.  If current support levels falter and the 76.00000000 mark were to be challenged, this would then bring AVAX/USD into a price realm which would be within sight of crucial mid-term lows.

Any moves lower from the current price range of AVAX/USD will continue to raise nervous sentiment. Since the 14^th of March the broad cryptocurrency market had taken a rather intriguing upwards climb and broken through plenty of rather durable resistance levels with relative ease. On the 14^th of March AVAX/USD was trading near 65.90000000, which had it traversing near important lows seen in February.

If the development of a bearish trend in the past week continues to be demonstrated and current support levels are proven weak, this would be a bad sign. The long term down trend in the broad cryptocurrency market has been easy to define, recent trading since the middle of March did show the capability of a rebound higher. A retest of lower support may make plenty of speculators feel as if they have been tricked by a false breakout, including the AVAX/USD crowd.

Some bullish optimists may believe the recent selloff exhibited within AVAX/USD is merely a temporary burst of headwinds.  However, any trader looking to take a long position of AVAX/USD is advised to use secure stop loss orders, to guard against the potential of another round of nervous selling igniting in the near term. Traders should expect plenty of volatility today as Avalanche swims in dangerous waters.

Avalanche Short-Term Outlook

Current Resistance: 80.21000000

Current Support: 78.75000000

High Target: 84.82000000

Low Target: 75.40000000