Welcome to today’s Market Blast.
Today, we will take a look at Forex Trading on EUR/NZD, AUD/NZD, NZD/USD, the DAX, the FTSE 100, the Russell 2000, the S&P500, and the NASDAQ.
Still, the frenzy to invest in AI and tech stocks continues as we see the NASDAQ at all-time highs.
We see the same enthusiasm in the S&P500 with investors buying the dip a couple of weeks ago, signalled by our stochastic oscillator, which tracked the reversal perfectly.
However, we see the Russell 2000 lagging behind, in fact, turning down.
Is this a dip buying opportunity?
And why is it going in the opposite direction of the other indices?
The Russell 2000 represents small-cap companies in the United States, and these companies are more susceptible to interest rate fluctuations than the larger companies.
Also, with a stronger USD and higher bond yields, this always affects the Russell more than the others, so we will keep an eye on this.
From the technical side, we see a falling wedge, which is usually a bullish signal.
We still have bearish confluence in the stochastic oscillator, but we will keep an eye on both the fundamentals and technicals.
Speaking of indices, we see price action on the DAX forming a descending triangle and giving us a range trading opportunity along the way.
If we move into a lower time frame, we see the potential with a multitude of swing highs and swing lows, many corresponding nicely with reversals on the stochastic oscillator, but I encourage you to experiment with your favourite indicators.
And just like the DAX, the FTSE 100 is showing a downtrend, and the stochastic oscillator is overbought and waiting to turn over to the downside.
I encourage you to investigate all the global indices for similar setups.
In the last couple of videos, we looked at NZD pairs, and we see, as expected, the interest rate frenzy has calmed down, and price action has reversed on NZDUSD.
We were following a range trading opportunity last month, then the RBNZ voted to hold rates by a very narrow margin.
This signalled to the market that we may see a rate rise soon, and NZD flew.
As usual, when the dust settled and our technical indicators gave us a clue, the reversal was a great trade.
Now, we may see price action wanting to continue the uptrend.
Be careful, though, as we have some important US economic news this week and we expect volatility.
We will look at the US Non-Farm payrolls and Canadian employment in our next video on Thursday.
You will find similar price action on almost all NZD pair charts, including AUDNZD.
And EUR/NZD.
