Welcome to today’s Market Blast.
Today we will take a look at Forex Trading on NZD/USD, EUR/CAD, USD/CAD, the Russell 2000, the DJIA, the S&P500, and the NASDAQ.
Just a reminder that these videos are only an observation of current market conditions, and these are not to be considered as trading advice.
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Investors seem to be ignoring the war and the high price of fuel and are pinning hopes on the Iran war ending soon, more stability in the US government in November, and the Fed lowering interest rates this year.
We see all US indices well above the 200-day moving average, and with the NASDAQ and S&P500 at record highs.
The question is, will the Dow Jones Industrial Average and the Russell 2000 catch up?
OK, so why is the DJIA lagging behind?
Technically, the S&P500 is scored by market capitalisation, with big heavyweights like Apple, Nvidia, and Microsoft pushing up the values.
Investors are going into AI services big time.
The Dow Jones, on the other hand, is scored by share price and is driven by only 30 large companies, and many big movers are not in the Dow.
The old-school companies in the Dow are more affected by inflation and geopolitical events, so they may take some time to show success like the S&P and NASDAQ companies.
We see strength in CAD for many reasons, including the elevated price of WTI and increasing Canadian government stability.
We see price action on USDCAD trying to break through a key level of support with several key levels below.
Technicals look bearish.
I encourage you to look at all CAD pairs as we see strength right across the board.
We see similar price action on EURCAD, but there is a fundamental difference between this and USDCAD.
This year, it is possible that the US Federal Reserve will lower interest rates first, then the BoC, but the ECB may actually RAISE rates.
So, be careful shorting pairs like EUR/CAD, based on the price of crude oil.
Speaking of CAD, we have an important CPI reading on Monday.
Also, we will see quarterly CPI from the RBNZ on Monday as well.
With a weaker USD, NZD has been stronger.
We see NZD/USD climbing, but a very overbought stochastic oscillator, so a low CPI number could see the pair falling.
