Major US indices found room for some relief to start the week. Chinese equities were more mixed, with some paring of ... - IG

Market Recap

Major US indices found room for some relief to start the week, after comments from China and Japan authorities supported their respective currencies and triggered a pullback in the US dollar (-0.5%) – its sharpest single-day drop in two months. Notably, the Nasdaq gained 1.1% despite a subdued showing in US Treasury yields, with the heavy-lifting revolving around a handful of big tech stocks. Individual corporate news seem to account for the uneven performance, with Tesla up 10% on Morgan Stanley’s rating upgrade, while both Meta and Amazon were up more than 3%.

Ahead, sentiment surveys around Australia and Germany, along with UK employment data will be on watch, although any market moves could be short-lived in the lead-up to the US Consumer Price Index (CPI) data release tomorrow. The upcoming US inflation data will be key to determine whether the Federal Reserve (Fed) may leave the door open for additional tightening in November or December, at a time where more Fed policymakers are putting greater emphasis on data-dependence lately and softening their tone around rate hikes.

Upcoming market moves may also depend on whether Apple can convince investors of its new products at its upcoming event, given the company’s heavy weightage in major US indices. Seasonality over the past 20 years has not been in favour however, with average performance generally ranging to slightly lower in the second half of September.

Having fallen below its Ichimoku cloud support on the daily chart, the US$180.00 level is now showing to be a key resistance to overcome, where its 100-day moving average (MA) coincides with a 23.6% Fibonacci retracement (from its January 2023 bottom to July 2023 peak). For now, the bears have rejected a crossover in its moving average convergence/divergence (MACD) above the key zero level on its daily chart. That said, some dip-buying was spotted at the US$173.54 level with the formation of a long-legged candle last week, which will now be a crucial support level to hold.

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2023-09-12 02:10:41Z
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