This year has seen a consistent theme of stocks down, and the dollar up. From a fundamental view, the outlook remains extremely uncertain.
Bear Market Rally？
The NASDAQ100 index, which shows a basket of the top 100 companies in the US, has already suffered greatly. The risk of a near-term bear market rally is growing.
A bear market rally occurs when there is a short-term rebound in asset prices as part of a longer-term market decline. In this case, it could see prices test the psychological 13000 level before making a broader move lower to fit the longer-term fundamental view, which does not look good right now. A potential selling target is the market imbalance at around 11500.
The “Dollar” Show Goes on!
One of the biggest winners this year has been the dollar bull trade. It has acted as a safe haven currency against uncertain fundamental shocks such as the war in Ukraine.
EURUSD prices are trading comfortably below 50, 100, and 200-day moving averages, showing a clear downtrend. If prices break above 1.06407, the next wave of downside could come from the blue box which is a key supply zone. Alternatively, the price fails to break above this high and makes a move towards the potential selling targets of 1.03000.
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