Following the miss across
the board in the US CPI report, the market is increasingly confident
that we are heading towards a soft landing. Such expectations are also supported
by the strong labour market, as we confirmed again by the US Jobless Claims last Thursday, and the rising
consumer sentiment, as seen in the University of Michigan report last Friday. As long as the
labour market continues to hold, we are likely to see new highs for the Nasdaq
Composite.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the buyers kept
leaning on the red 21 moving average to
position for more upside and eventually succeeded as the US CPI missed
expectations and led to a strong rally. The Nasdaq Composite should now be
eyeing the 14649 level where we should see strong sellers stepping in.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the Nasdaq
Composite broke out of an ascending triangle patter.
Generally, a breakout on either side leads to strong momentum in the direction
of the breakout, so the buyers have also this factor stacked in their favour.
At the moment we are seeing a pullback from overstretched levels as the price
was too far from the blue 8 moving average, and in such instances, we can generally
see some consolidation or a pullback into the moving average before another
strong move.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have two possible levels where the buyers may lean on to:

• The 38.2% Fibonacci
  retracement level near the 14000 level.
• The 61.8% Fibonacci retracement level near
  the previous resistance now
  turned support.

The sellers, on the other hand, should
wait for the price to break below the 13800 level before piling in and extend
the fall into the 13174 support.

Upcoming
Events

This week there are only two notable events: the US
Retail Sales tomorrow and the US Jobless Claims on Thursday. Given the
sentiment in the markets, we are likely to see a big selloff only if the data
misses expectations by a big margin as a little miss should just be an
opportunity to buy the dip. Conversely, higher than expected data should
reinforce the soft-landing narrative and lead to new highs.

This article was written by FL Contributors at www.forexlive.com.

The latest retreat continues to weigh on yields, with bonds still catching a bid today in European morning trade. The drop last week comes after 10-year yields met its March highs near 4.09% before falling back below the key 4% threshold and here we are now, down roughly 30 bps from there to 3.78%.

The fall was validated by the softer US CPI report last week. However, traders are still seeing good odds of a 25 bps rate hike by the Fed next week. Fed funds futures are showing a ~96% probability of such a move. But when you look out to the curve into next year, there has been a climb down in market pricing as compared to two weeks ago:

Put together, that reflects a market perception that is less hawkish/more dovish on the Fed outlook. And that view is so far being vindicated by the data, or at least the most important one – that being the US CPI report.

If that trend continues, it should lead to lower yields and added pressure on the dollar unless we do see economic conditions deteriorate significantly and/or there is a change in the hawkish gears among other major central banks.

This article was written by Justin Low at www.forexlive.com.

I wouldn’t replace my real dog with a robot driven by AI, would you?

Artificial Intelligence (AI) is transforming our world, introducing profound changes in numerous domains, including writing emails, browsing the web, and even stock picking and trading. Yet, as I watched my dog, Mika, the thought occurred to me: how far are we willing to let AI replace the authentic experiences in our lives?

Imagine a future where AI has evolved to such an extent that I could replace Mika with a robotic counterpart, one so perfectly designed that it would be nearly impossible to distinguish from a real dog. This AI-driven robot would be the epitome of a perfect pet, never misbehaving or causing inconveniences.

Impeccable fur is the new black

With her impeccable fur and flawless behavior, this robot dog would never wake me up in the middle of the night with incessant barking, or leave unwanted surprises on the floor. Continuously learning and adapting, she would evolve to meet my needs perfectly, embodying the ideal of a ‘good dog.’

Faced with this futuristic scenario, I asked myself: Would I replace Mika with this flawless robotic dog? To my surprise, the answer was a resounding no.

Why not? Simply put, there’s something irreplaceable about the authenticity of Mika, about her realness. I would choose a real dog over a robot, even if the latter promises superior productivity or performance.

This decision reflects a human preference that I believe will persist as AI continues to disrupt various sectors. While AI might streamline many tasks, it will not completely replace the human desire for authentic experiences.

What about AI taking over investing and stock picking?

The same principle applies to stock picking, but to a much lesser extent than my example with Mika. Some investors may have a favorite stock or company – take Tesla, for instance. They might totally love Elon Musk for various reasons, choosing Tesla not based solely on valuation related P/E multiples or any measurable factor, but for their personal human preference. Even when AI suggests alternatives that may perform better, they still choose Tesla – much like I choose Mika.

But why to a lesser extent? Because people would still thrive to invest to generate a profit and would, thus, be inclined to trust or at least test advanced AI driven investment tools. Still, there will always be people that just love Elon Musk like I love Mika, and would not let AI override that.

In a world increasingly driven by AI, where do we draw the line? How much of our authentic, human experiences are we willing to replace for the sake of productivity?

As for me, I wouldn’t trade Mika for a robot, no matter how perfect. What about you? Would you replace your beloved pet with an AI-driven robot? And what do you think about Elon and Tesla stock, anyway? Please comment below.

This article was written by Itai Levitan at www.forexlive.com.

Alongside a hold at key resistance in AUD/USD here, USD/JPY is the other major pair that might act as a saving grace for the dollar. The greenback looked to be in dire straits after last week’s rout but there is still one key technical level to watch despite the several breakdowns in EUR/USD, GBP/USD, and USD/CHF.

USD/JPY may have already fallen by roughly more than 700 pips at the lows this month but part of that owes to a sharper correction in the yen itself alongside BOJ speculation here.

Add that to the dollar suffering last week and we came close to testing the confluence of the 100 (red line) and 200-day (blue line) moving averages on Friday. That saw buyers step in to defend the level with the dollar also taking a bit of a breather, rebounding to back above 138.00 as seen currently.

The key support region is seen at 137.01-03 and that pretty much holds the key in unlocking the next potential leg lower for the dollar. A break below that sets the pair up for a potentially quick drop towards 135.00 next.

On the flip side, buyers could also reflect the strength of their conviction by holding at the key support region above. That will be a good baseline to work with in order to try and work out a rebound at least. Things are certainly heating up and the technicals are coming into extreme focus as we look towards the Fed and BOJ policy decisions next week.

The overall mood today is not as inviting as we saw in the past week or so but it is still early and we also got US retail sales data as a potential trigger coming up tomorrow.

This article was written by Justin Low at www.forexlive.com.