NASDAQ 100
The Nasdaq 100 ended up with a very ugly candlestick for the week, most of this would have been the bloodbath on Friday in reaction to those jobs numbers. It’s all about the fear that the Federal Reserve will have to keep interest rates higher for longer. That is a killer for technology stocks eventually, although the reality is I believe the technology stocks and of course the artificial intelligence theme will continue to play out, and if that’s going to be the case it’s only a matter of time before the Nasdaq 100 turns around.
I would anticipate maybe a little bit of follow-through based on the way it’s closing for the week, but I’ll be watching the 28,500 level. If we can maintain above there it could be a nice buying opportunity. Anything below there could open up a drop to the 26,000 level.
USD/MXN
The US Dollar has rallied a bit against the Mexican Peso during trading for the week, but we are still seeing the 17.50 level offer resistance. The question now is whether or not that can continue to be the case. We certainly will be testing it almost immediately when the next session opens, but even if we were to break above here, I think about as far as this pair goes is the 18 level because of the massive interest rate differential that favors Mexico.
If we see the US Dollar really start to take off to the upside against the Mexican Peso, I’d actually prefer to buy the Dollar against other currencies because of the fact that you’d be paying a pretty high swap here.
Gold
Gold got crushed, which is not a huge surprise considering interest rates jumped the way they did on Friday, and now we have broken the back of the hammer from the previous week. That is an ugly turn of events. The 50-week EMA currently sits at the $4,270 region. If we lose that and continue to go lower, Gold could correct quite a bit.
This is all about interest rates in America staying higher for longer, and the jobs report on Friday of course only added to that speculation. If rates start to fall, perhaps in the 10-year yield getting below the 4.50% level, then maybe gold recovers.
Silver
Silver finds itself below the $70 level, an area that is important, but now we are testing the 200-day EMA on the daily charts. Breaking below that level could open up a move down to the $65 level based on weekly analysis.
Really at this point in time, Silver desperately needs the interest rates in America to start dropping. When you look at the weekly chart, you can see that we have made three successive highs that have been repudiated. That’s not a good look, so we need some help out of the bond market to make this market turn around.
USD/CHF
The US Dollar jumped for the week, breaking above the crucial 0.79 level against the Swiss Franc. This is a market that I think is going to try to work its way towards the 0.81 level.
The interest rate situation in America was very noisy as rates jumped after the jobs number and that of course makes the interest rate differential between the United States and the Swiss as even wider and that just makes the Dollar more attractive. With that being the case, I think we continue to drive to the upside. Short-term pullbacks probably offer buying opportunities, unless of course the 10-year yield in the United States really starts to break down, perhaps below the 4.50 level.
USD/ZAR
The US Dollar rallied against the South African Rand during the week to break above the 16.50 level as rates in America rallied. It closed the gap between the United States and South Africa, which at this point, South Africa still has higher rates, but I think we have a scenario where traders are probably looking for signs of exhaustion to start selling again.
Ultimately, if we take off to the upside, we could see this market go looking to the 50-week EMA near the 16.91 level.
GBP/USD
The British Pound got crushed against the US Dollar, which is not a huge surprise considering the US Dollar jumped against everything. But now the question is whether or not the 1.33 level will continue to hold as support.
The 1.33 level is an area that’s been important for some time, and I think will continue to be an important level that traders will watch. If we can get a bounce from there, the British Pound may turn around and save itself.
USD/CAD
The US Dollar rallied quite significantly against the Canadian Dollar to test the crucial 1.3950 level. The 1.3950 level is an area that’s been important multiple times, and the fact that we are closing right at that area makes quite a bit of sense that we will continue to see a lot of noise here.
And if rates in America continue to grind to the upside, this pair will do the same, perhaps looking to go to the 1.4150 level. On the other hand, if US rates start to drop, then we could see a return to the 1.38 level.
USD/JPY
The US Dollar finds itself testing the crucial 160-yen level at the end of the week.
This is an area that the Bank of Japan has gotten involved in previously, and we’ll need to pay close attention to it because if we can break above the 160.50 yen level, then we could see a situation where we see a real break to the upside as it would destroy a swing high from 1990. Short-term pullbacks should continue to be buying opportunities.
EUR/USD
The euro fell hard this week, as we are reacting to the interest rates in the US here as well. With this, it will be interesting to see whether or not we are going to see the market test 1.14 below, and I think there will be some kind of bounce that we could act upon, but I am going to be patient, and wait to see the “V” pattern on the chart before buying again.
With this, I am simply waiting to see how Monday plays out.
