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The market mood remains positive after the Fed’s minutes pointed to ongoing support and ahead of Chair Powell’s speech. Safety concerns about AstraZeneca’s vaccines are weighing on the euro and the pound. Cryptocurrencies have dropped from their highs. US jobless claims are eyed.
The FOMC Meeting Minutes echoed the bank’s cautious approach to its policy despite acknowledging America’s quick recovery. Tapering bond buys is unlikely to come soon, music to investors’ ears. The S&P 500 extended its gains in response. Federal Reserve Chair Jerome Powell is set to speak later in the day.
Taxes: Treasury Secretary Janet Yellen laid out a detailed program to raise corporate taxes to fund the administration’s infrastructure spending plans. Republicans remain opposed to any hike. President Joe Biden is set to double America’s commitment to lowering carbon emissions, setting it at 50% for 2030.
EUR/USD is off the 1.19 level amid these AZ concerns and awaits the European Central Bank’s meeting minutes, which will likely echo the ECB’s commitment to keeping long-term interest rates low. Phillip Lane, the bank’s chief economists, said that favorable financing conditions must be maintained.
US jobless claims are set to show applications falling back below 700,000 after topping that level last week. Nonfarm Payrolls and the JOLTs job opening figures pointed to a robust labor market.
WTI Crude Oil is around $60 and Gold is hovering around $1,740, both little changed.
Nasdaq 100 is expected to move to new record highs after completing a “head & shoulders” base and as such the Credit Suisse analyst team has raised the core target from 14000/10 to 14380.
Nasdaq 100 has completed a base as expected for a resumption of the core uptrend
“Nasdaq 100 has broken above key resistance at 13315 to mark the completion of a ‘head & shoulders’ base as looked for. This should confirm the consolidation phase is over and we look for a resumption of the core uptrend for a move back to the 13880 high and eventually our long-held 14000/10 target. However, whilst we would look for this latter area to cap at first, we now look for a break above here also in due course for a move to our new raised target at 14380, the ‘measured objective’ from the ‘head & shoulders’ base.”
The USD/CHF pair is correcting lower and Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the slide to reach the mid-March low at 0.9215.
USD/CHF to stay bid above the 200-day ma at 0.9105
“USD/CHF is correcting lower near-term and we would allow for a slide to the mid-March low at 0.9215.”
“The Elliott wave count on the daily chart is implying losses towards 0.9170 and there is scope for the 200-day ma at 0.9105.”
“Key nearby resistance lies at 0.9267/72 (highs from July).”
“Above 0.9472 lies the 50% retracement of the 2019-2021 decline at 0.9499.”
“Above 0.9500 we are unable to rule out a move to the 200-week ma at 0.9661.”
WTI (futures on NYMEX) is snapping two-day bullish momentum on Thursday, as it returns to the red zone despite the upbeat market mood and broad-based US dollar decline.
The sentiment around the black gold remains undermined by an unexpected build in the American gasoline inventories, which overshadowed the drawdown in the crude stockpiles recorded last week.
From a near-term technical perspective, the WTI barrel remains exposed to the downside after it failed to find acceptance above the 50-daily moving average (DMA) at $60.32 for the third day in a row.
Adding credence to a potential move lower, the 14-day Relative Strength Index (RSI) keeps its bearish streak intact, as the indicator remains below the 50.00 level.
The ascending trendline support at $57.85 is expected to guard the downside, below which the March 23 low of $57.27 could be tested.
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