This week in the financial markets has been relatively quiet, with most major markets consolidating around last week’s levels. High-yield currencies retraced along with stock indices. The risk appetite remains relatively high, as VIX balances at 13.50 - the lowest level since February 2020, just before Covid fears engulfed the market.
U.S. economic data bolstered hawkish expectations for the country’s interest rate policy and treasury bond yields started to grow, boosting the US dollar but pushing gold lower.
That hawkish outlook was further heightened, after U.S. GDP was revised up to 2% annual performance. But overall activity is muted as markets are in ‘summertime mode’, with dampened volumes and range-bound activity. In this review, we’re watching the performance of gold and the Nasdaq index.
Given a strengthening U.S. dollar and overall hawkish expectations, Gold is about to continue a short-term downtrend. To join this run, waiting until the pullback to the dynamic resistance area above makes sense, to a zone between 20 and 50-day moving averages.
Nasdaq is moving on a rising trend, though driven by a limited number of shares, as market breadth remains relatively low. So, if the price tries to test the 15000 area again, it could reverse to the support area below, as shown on the chart.