The Nasdaq has been stuck
in a big range since the last FOMC decision as the market perceived it as more
hawkish than expected.

The Fed continues to place
a great deal on inflation progress to proceed with further rate cuts as
highlighted by Fed’s Waller this week. Therefore, the market is
waiting for more data to decide what the Fed is going to do next.

A soft CPI report next week
will likely trigger a strong dovish reaction in the markets, especially
considering the quick rise in Treasury yields in the last couple of months.
That should support the stock market and lead to more gains. Conversely, another
hot CPI isn’t going to help and could trigger another selloff.

Today, we have the US NFP
report and although the CPI is going to have a bigger influence on interest
rate expectations, it’s still going to be a market moving event, especially if
we get big deviations from the expected numbers.

Right now, the market would
want to see soft but not too soft data. A very bad or very hot report could add
more pressure on the market. Watch also wage growth, as Fed’s Bowman highlighted recently that it’s
still above the pace consistent with their inflation target.

Nasdaq
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Nasdaq has been in consolidation mode since the last FOMC decision
with the 21000 level acting as a key support. From a risk management perspective, the buyers
will have a better risk to reward setup around the support to position for a
rally into new all-time highs. The sellers, on the other hand, will want to see
the price breaking lower to increase the bearish bets into new lows with the
20380 level as the first target.

Nasdaq Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that the price action has formed what looks like a descending
triangle. The price can break on either side of the pattern but follows
next is generally a strong move in the direction of the breakout, so the market
participants will wait for that to enter or add more to their positions.

Nasdaq Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price action has been compressing as we await the US NFP release.
If the price stays above the 21350 level, that would be more bullish and will
likely take us to the 21700 level. Conversely, if the price stays below the 21180
level, the sellers will likely push the price into the support and target a
break below it. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Last month’s decision to cut rates was a „close call“
• The economic outlook now is much different from when the Fed started cutting rates last year
• The risk that inflation might get stuck between 2.5% and 3% has increased

This matches up with their current policy stance as they are set to pause on cutting rates, arguably all through Q1 this year. As things stand, market players are pricing in the first full 25 bps rate cut to be in June next with ~42 bps of rate cuts priced in for the year. We’ll see how that changes up after the US jobs report later today.

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

The S&P 500 has been stuck
in a big range since the last FOMC decision as the market perceived it as more
hawkish than expected.

The Fed continues to place
a great deal on inflation progress to proceed with further rate cuts as
highlighted by Fed’s Waller this week. Therefore, the market is
waiting for more data to decide what the Fed is going to do next.

A soft CPI report next week
will likely trigger a strong dovish reaction in the markets, especially
considering the quick rise in Treasury yields in the last couple of months.
That should support the stock market and lead to more gains. Conversely,
another hot CPI isn’t going to help and could trigger another selloff.

Today, we have the US NFP
report and although the CPI is going to have a bigger influence on interest
rate expectations, it’s still going to be a market moving event, especially if
we get big deviations from the expected numbers.

Right now, the market would
want to see soft but not too soft data. A very bad or very hot report could add
more pressure on the market. Watch also wage growth, as Fed’s Bowman highlighted recently that it’s
still above the pace consistent with their inflation target.

S&P 500
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the S&P 500 continues to range between the 5855 support
and the 6050 resistance as the market awaits the key US data. From a risk
management perspective, the buyers will have a better risk to reward setup
around the support to position for a rally into a new all-time high. The
sellers, on the other hand, will want to see the price breaking lower to extend
the drop into the major trendline
around the 5720 level.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, there’s
not much else we can add here as the price action remains rangebound between the
5855 support and the 6050 resistance. It really all hinges on the upcoming US
NFP and CPI reports.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that the price action has been compressing as we await the US NFP release.
If the price stays above the 5960 level, that would be more bullish and will
likely take us back to the 6050 resistance. Conversely, if the price stays
below the 5920 level, the sellers will likely push the price into the support
and target a break below it. The red lines define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

The precious metal is keeping a solid bounce off its 100-day moving average (red line) to start the new year, now trading up to $2,680 this week. A test of the $2,700 level beckons, before potentially revisiting the end-November and December highs around $2,725-26 next.

A major positive for gold to start the year is that the gains we’re seeing is coming despite rising yields and a stronger dollar. That really points to the strength in the animal spirits surrounding gold at the moment. That being said, one can argue that gold is also benefiting from its typical January seasonal tailwind. So, there’s that.

It is still early days and there will be a big test for gold coming up as soon as later today. The upcoming US jobs report could possibly be key in dictating trading sentiment for the month, so keep a watchful eye on that.

But considering the optimism as seen above, I reckon the risks for the next reaction in gold might be fairly asymmetric. If the US jobs report turns out to be softer and that weakens the dollar and Treasury yields, I reckon that will send gold soaring going into the week ahead.

As for the opposite outcome on the data, it might not necessarily put too much of a dent in gold. That considering the stronger resolve of dip buyers to start the year. But it will certainly be interesting to see how such a test of that will play out this early on.

For now, the backdrop is set as such. Gold is eyeing a fourth straight day of gains and things could get even hotter if US labour market conditions underwhelm expectations later today.

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

The Russell 2000 has been
consolidating around the lows after the quick drop following the FOMC decision in December as the market perceived
it as more hawkish than expected.

The Fed continues to place
a great deal on inflation progress to proceed with further rate cuts as
highlighted by Fed’s
Waller this week. Therefore, the market is waiting for more data to decide
what the Fed is going to do next.

A soft CPI report next week
will likely trigger a strong dovish reaction in the markets, especially
considering the quick rise in Treasury yields in the last couple of months. That
should support the stock market and lead to more gains. Conversely, another hot
CPI isn’t going to help and could trigger another selloff.

Today, we have the US NFP
report and although the CPI is going to have a bigger influence on interest
rate expectations, it’s still going to be a market moving event, especially if
we get big deviations from the expected numbers.

Right now, the market would
want to see soft but not too soft data. A very bad or very hot report could add
more pressure on the market. Watch also wage growth, as Fed’s
Bowman highlighted recently that it’s still above the pace consistent with
their inflation target.

Russell 2000
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that the Russell 2000 is consolidating below the key 2300 level with the price
now approaching the major trendline. If the price gets there, we can
expect the buyers to step in with a defined risk below the trendline to
position for a rally into a new all-time high. The sellers, on the other hand,
will want to see the price breaking lower to increase the bearish bets into the
1993 level next.

Russell 2000 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see more clearly the rangebound price action between the 2300 resistance
and the 2220 support. The market is clearly waiting for a catalyst to push into
either direction. The US NFP and CPI reports will be key events for market participants.

Russell 2000 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have some minor support and resistance levels on this timeframe. The
buyers will want to see the price breaking above the 2255 level to start
targeting the 2300 resistance, while the sellers will look for a break below
the 2235 level to extend the drop into the major trendline. The red lines
define the average daily range for today.

Upcoming
Catalysts

Today we conclude the week with the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.