Gold rebounds, USDJPY retreats, all eyes on Nvidia
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A thin data calendar saw another day of jostling positions ahead of Wednesday's Nvidia results. Risk-seeking trades won the day as the US dollar retreat sparked rallies in energy, precious metals, and cryptos, while US equities had a mixed session.
On Wall Street, Tesla rallied in hopes of a feast under the Trump administration. That lifted the Nasdaq 0.60% higher, while the S&P 500 gained 0.39%. The Dow Jones lagged, slipping by 0.13%.
The dollar index fell 0.43% on currency markets, slipping through the short-term trendline at 106.68 and closing on support at 106.20. A close under 106.20 this evening suggests a deeper technical correction targeting 104.80.
After slumping on Friday, the USD/JPY rally remains fragile as BOJ officials suggest rate hikes remain on track for December's meeting. USD/JPY rose 0.22% to 154.70 overnight, but it looks in danger of falling through its powerful rising trendline support near 154.45 today. A close below 154.45 suggests a much deeper correction targeting the 151.00 regions.
The rally in risk assets boosted gold by 1.90% overnight to $2,612.00 an ounce, its best performance in a week. The rally has changed the short-term technical picture to bullish, as gold breaks out of resistance between $2,600.00 and $2,610.00. Gold is no longer oversold on the RSI and could initially target the 50-day moving average at $2,6556.00.
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The gyrations across asset classes will likely continue due to a shortage of tier-one data releases this week. Asia and Europe’s data calendars are empty today, with just US Building Permits this evening and no central bank speakers of note.
Markets will remain vulnerable to headline-driven gyrations intraday, but they should revert to the "trend is your friend" mantra at least until the Nvidia release.
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