2024-06-25 09:58

Nvidia (NVDA) Technical Outlook Nvidia back below $3 trillion market capitalization. A technical chart gap may be a sign of further losses to come. Nvidia has shed nearly 16% of its market value in the last three trading sessions as sellers take control of the world’s largest chipmaker. Nvidia became the world’s largest company last week, with a valuation in excess of $3.34 trillion, surpassing both Microsoft and Apple, but now sits in third place with a market cap of around $2.85 trillion. The recent sell-off coincides with news that Nvidia CEO Jensen Hang has sold around $95 million of stock in the past few days. To keep the recent consolidation in perspective, Nvidia remains on of the S&P 500’s top performers, with year-to-date gains of around 140%. There is a ‘gap’ on the daily Nvidia chart, formed when the last company earnings were released, and this may come into play if the recent bearishness continues. Nvidia is currently testing the 23.6% Fibonacci retracement of this year’s rally and if this fails then a move lower to the 38.2% retracement level of around $105 may be seen. Below here is a gap in the chart between the May 22nd high at $96 and the May 23rd low at $101.50, made on the last earnings release. The 20-day simple moving average, a recently supportive dynamic indicator, is also being tested. This runaway gap may attract traders, especially with the increased selling volume seen in the last three days. Trading the Gap – What are Gaps & How to Trade Them? Nvidia Daily Price Chart Chart via TradingView What’s your view on Nvidia? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/nvidia-nvda-technical-outlook-further-losses-or-short-term-consolidation-20240625.html

2024-06-25 08:15

French Election Polls, Euro Latest Polling data has Marine Le Pen’s party leading the three horse race EUR/USD: Softer USD may limit downside risks for the pair Bond spreads in view in the lead up to Sunday’s first round of elections The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library Polling Data has Marine Le Pen’s Party Leading the Three Horse Race According to a recent Toluna Harris Interactive opinion poll, Marine Le Pen's National Rally party (RN) is leading in France's legislative election, with an estimated 33% of the vote in the first round. This figure remains unchanged from the previous survey. The pollwas published on Monday and surveyed 2,325 adults online between June 21-24. The left-wing coalition NFP has seen a slight increase, rising one point to 27%, while President Emmanuel Macron's party has dropped one point to 20%. Based on these projections, the National Rally could potentially secure between 215 and 245 seats in the National Assembly, with their allies led by Eric Ciotti potentially gaining an additional 15 to 30 seats. The NFP is expected to obtain 150 to 180 seats, while Macron's party may end up with 85 to 130 seats. The Republicans are projected to finish with a total of 30 to 50 seats in the National Assembly. This poll confirms a significant shift seen recently in the French political landscape, with Le Pen's far-right party gaining considerable ground in the legislative elections. In another poll, the Ifop-Fiducial poll of voting intentions, Marine Le Pen’s party is seen as having a 36% share of the vote which would see the (RN) collect between 220-260 seats out of 577. The poll surveyed 1,843 people registered to vote from a sample of 2000 citizens between the 20th and 24th of June. Ifop Poll of 1,834 People Registered to Vote in France shows the Three-Horse Race Source: Ifop.com, prepared by Richard Snow EUR/USD: Softer Dollar May Limit Downside Risks for Now EUR/USD appears to have stabilised above the 1.0700 mark for the time being. Markets have a tendency to get nervous when political uncertainty presents itself, but polls have all been pointing to the same result for some time now – a fractured parliament with Marine Le Pen’s party likely to receive the majority of the vote but falling short of attaining a majority in parliament. Despite the recent consolidation, EUR/USD trades below the 200 SMA with the lower bound of the pair’s broad range coming in at 1.0643 and the April swing low at 1.0600 flat. US GDP data and PCE on Friday are notable events on the calendar, with PCE carrying considerable more weight as it could validate the encouraging CPI data seen recently in the US (potentially bearish for the dollar). EUR/USD Daily Chart Source: TradingView, prepared by Richard Snow Bond Spreads in View Ahead of Sundays First Round of Elections European bond yields will gain attention ahead of Sunday’s first round of votes in France. Riskier, more debt laden nations tend to see their borrowing costs surge higher in times of uncertainty – as has been witnessed in the French-German 10-year spread which rose substantially to around 80 basis points after the snap election was announced. If contagion effects resurface, the euro may come under renewed pressure as the single currency has a tendency of selling off when EU bond spreads widen significantly. French-German 10 Year Spread Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/eur-usd-latest-polling-data-places-marine-le-pen-s-party-in-top-spot-20240625.html

2024-06-24 16:27

S&P 500 Analysis S&P 500 sector performance thins out – major advances seen in handful of sectors Popular measure of market breadth has dropped slightly but raises no alarm bells S&P 500 to retest last week’s Psychological Barrier The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library As we near the end of the quarter it is time to assess how US stocks have fared. AI stocks and chipmakers continue to lead the pack but some of the Magnificent Seven stocks appear to be experiencing a slowdown in performance, on track for low single digit gains for the second quarter. One thing to keep in mind is the PCE data out on Friday as a lower print there may provide one last push higher for the index, particularly when you recall that CPI data appears to be back on track after a period of stubborn inflationary pressures. Notable standouts for the quarter include Nvidia, but more surprisingly Apple made an impressive recovery which may get paired back after news of a possible breach of EU antitrust regulations have surfaced after previous run-ins with the oversight bod Source: Refinitiv, prepared by Richard Snow S&P 500 Sector Performance thins out – Major Advances seen in Handful of Sectors Taking a look at the sectoral breakdown, the rally is now very much focused in three sectors: information technology, communication services and utilities. Other sectors like consumer discretionary and health care have managed low single-digit increases, while industrials, materials and the energy sector have really struggled in Q2. This is in stark contrast to what was experienced in Q1 when all but the real estate sector advanced. Q1 and Q2 S&P 500 Sector Performance has Thinned out Source: LSEG, Refinitiv Workspace, prepared by Richard Snow Despite the drop off in sectoral inclusion, market breadth is still holding up. Admittedly it has fallen, with the percentage of S&P 500 stocks trading above their respective 200-day simple moving averages dropping from 80% at the start of the year to 71.17% as of Friday. While lower, the reading does not provide a cause for concern, especially when the top five stocks now make up more than 25% of the entire index. Outperformance by these select few stocks can pull the rest of the index higher still. A Measure of Market Breadth (% of S&P 500 stocks trading above their 200 DMAs) Source: Barchart, prepared by Richard Snow S&P 500 to Retest Last Week’s Psychological Barrier The S&P 500 respected the 5,500 mark last week, simultaneously printing a new all-time high. On Monday, the index trades up at the end of the London session, appearing on track for a retest of last week’s line in the sand. The final US GDP print for Q1 and US PCE data on Friday could both have an impact on the market. US GDP moderating is actually seen as a positive as long as the data does not capitulate. Weaker growth advances the narrative that restrictive policy is hampering the economy necessitating a lowering of interest rates provided inflation is deemed to be under control. PCE inflation data on Friday is the big one this week and could send the index even higher if PCE data drops encouragingly, confirming the recent drop in CPI data. The next big consideration for US stocks will be the quarterly earnings reports for the second quarter. The overbought status of the market via the RSI indicator suggests bulls may look for a consolidation or minor pullback before contemplating another advance but a lot depends on the data at the end of the week. Support appears at 5,260. Daily S&P 500 Chart Source: TradingView, prepared by Richard Snow https://www.dailyfx.com/news/taking-stock-s-p-500-quarterly-performance-and-market-breadth-observations-20240624.html

2024-06-24 10:17

Japanese Yen (USD/JPY) Analysis BoJ discussed the weaker yen and timely hike but the committee strikes slightly hawkish tone USD/JPY comes perilously close to the significant 160 mark Major risk events for the week: US PCE The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library BoJ Discussed the Weaker Yen and Timely Hike but the Committee Strikes a Slightly Hawkish Tone In the early hours of Monday morning the minutes of the June BoJ meeting were released. Two members appeared in favour of a rate hike in a timely manner with one member mentioning, ‘must raise interest rate in timely fashion without delay in accordance to heightening chance of achieving price target’. The other pointed to the continued yen weakness stating, ‘weak yen could lead to overshoot in inflation, which means appropriate level of policy rate would be pushed up’. However, there was a balance with other members weighing in to highlight sub-optimal consumption levels and the need to wait for incoming data before jumping to the conclusion that inflation is on a definite uptrend. A simple index of Japanese yen performance points to a continued decline as the currency approaches a very dangerous level seen in USD/JPY. Japanese Yen Index (equal weighting of USD/JPY, GBP/JPY, AUD/JPY, EUR/JPY) Source: TradingView, prepared by Richard Snow USD/JPY Comes Perilously Close to the Significant 160 Mark USD/JPY rose in the early hours of Monday morning, falling just shy of the 160 market which is largely seen as a tripwire for FX intervention. At the end of April, Japanese officials spent $62 billion in a massive effort to strengthen the yen and reduce the level of undesirable volatility. Moves above 160.00 may be short-lived. The pair is fraught with risk given how FX intervention typically results in excessive volatility as the pair has previously moved about 500 pips in a day. A natural level of support appears at 155.00 with dynamic support at the 50 day simple moving average appearing before it, around 156.20. USD/JPY Daily Chart Source: TradingView, prepared by Richard Snow Learn the ins and outs of trading USD/JPY - a pair crucial to international trade and a well-known facilitator of the carry trade Major Risk Events for the Week Ahead This week sees notably fewer high impact economic data. There will be final Q1 GDP estimates for the UK and the US with the main event being US PCE inflation data. https://www.dailyfx.com/news/boj-minutes-suggest-a-july-rate-hike-is-not-out-of-the-question-yen-unchanged-20240624.html

2024-06-21 15:00

Market Week Ahead: US Data, Nasdaq 100, US Dollar and Gold A handful of high-importance US data releases may stoke volatility next week. Are the Nasdaq and S&P 500 in the process of topping out? Gold and the US dollar push higher. Financial markets may see renewed volatility next week on the back of some notable US economic data releases. While CB consumer confidence, durable goods, and Michigan consumer confidence are potential market movers, Wednesday’s final US Q1 GDP report and Friday’s US core PCE release are next week’s heavy hitters. The latter has recently stalled around 2.8%, well above the Fed’s 2% target, and another unchanged print will increase pressure on the Federal Reserve to leave rates untouched for longer. The US dollar continues to move higher with the DXY boosted by weakness in the Euro, British Pound, and Japanese Yen. This year’s series of higher lows and higher highs remains in place and the index is closing in the recent double high around 106.60. To break above this multi-month high, the US dollar is going to have to make the running and not rely on weakness in other G7 currencies. British Pound (GBP) Latest – Sterling Continues to Slide After Dovish BoE Turn Japanese CPI Data Mixed as Yen Continues Steady Decline US Dollar Index Daily Chart Gold remains in a multi-week sideways range, pushing back towards resistance despite a stronger US dollar. The precious metal is back above all three simple moving averages and looks set to test $2,400/oz. next week. Gold Respecting a Recent Trading Range but Support Needs to Hold Firm Gold Daily Price Chart The Nasdaq 100 and S&P 500 have been posting fresh highs on a regular basis, powered by tech giants including Nvidia, Apple, and Microsoft. These three companies alone account for roughly 26% of the Nasdaq’s market capitalization and 21% of the S&P 500. Market concentration is not new but buyers should be aware of the risk involved when indices are driven by a very small number of stocks. The Nasdaq 100 and the S&P500 both look heavily overbought (CCI indicator) as the market starts to prepare for the next US earnings season. Nasdaq 100 Daily Chart S&P 500 Daily Chart All Charts using TradingView https://www.dailyfx.com/news/markets-week-ahead-us-data-nasdaq-100-us-dollar-and-gold-20240621.html

2024-06-21 10:30

GBP/USD Analysis and Charts UK PMIs miss forecasts. UK government bond yields post multi-week lows. Cable below 1.2650, CCI indicator suggests GBP/USD is oversold. UK private sector business activity expanded in June at its slowest rate since last November, according to the latest S&P Global Flash UK PMI report. According to Chris Williamson, chief business economist at S&P Global, the slowdown in part ‘reflects uncertainty around the business environment in the lead up to the general election.’ Stubbornly high UK services sector inflation ‘remains evident in the survey, but should at least cool further from the current 5.7% pace in coming months.’ UK government bond yields continue to slip lower, fuelled by yesterday’s dovish nudge by the Bank of England. Financial markets are now pricing in a 50/50 chance of a 25 basis point rate cut at the August BoE monetary policy meeting and a total of just under 50 basis points of cuts this year. Bank of England Leaves Rates Unchanged, Sterling and Gilt Yields Drift Lower UK 2-Year Gilt Yields Cable is back below 1.2650 and at a five-week low. Lower government bond yields and ongoing uncertainty ahead of the July 4th UK general election is weighing on the British Pound and this pressure is unlikely to ease soon. The daily GBP/USD chart does show the pair in oversold territory and this may slow down any further sell-off in the coming days. GBP/USD Daily Price Chart Charts using TradingView Retail trader data shows 55.39% of traders are net-long with the ratio of traders long to short at 1.24 to 1.The number of traders net-long is 25.52% higher than yesterday and 42.91% higher than last week, while the number of traders net-short is 11.36% lower than yesterday and 13.18% lower than last week. We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBP/USD-bearish contrarian trading bias. What is your view on the British Pound – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1. https://www.dailyfx.com/news/british-pound-gbp-latest-sterling-continues-to-slide-after-dovish-boe-turn-20240621.html