Market Comment: Nasdaq tests yearly low

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Risk aversion is increasing on the financial markets.

At the start of the week, the futures on the three most important US indices continued their losses from the previous week. The tech-heavy Nasdaq lost more than 3% and tested the year’s low. According to data from the University of Michigan, investors fear US consumer sentiment fell to a record low in June and the Fed’s tightening process could trigger a recession. Other asset classes such as commodities and cryptocurrencies are also under pressure. Oil Brent is down nearly 2% below $120 a barrel, while bitcoin is down 8% to $25,000, its lowest in 18 months.

EURUSD falls for a third straight session on Monday, finding short-term support at 1.0460, the session’s low since May 18. The pair is down 3% from Thursday’s intraday highs, set after the announcement of the ECB’s interest rate decision. The dollar is gaining strength against the euro as traders anticipate further rate hikes from the Fed and view the US currency as a safe haven. If Wall Street stock indices fail to defend their lows for the year, this would suggest further appreciation of the dollar. On the downside, the next major EURUSD target hits a 5-year low of 1.0349 in May.

The DE30 fell over 300 points on Monday to hit a May low of 13,272 points. The index falls for the fourth straight day of trading – since the last significant high on June 6, the DE30 has lost more than 1,200 points. If the above mark at 13,272 points is not used as support, the yearly low on March 7th at 12,423 points could be targeted. There is no sign of a bullish reversal on the H4 chart.

Maximilian Wiencke, CFTE
Market Analyst at XTB
[email protected]

Disclosure according to § 80 WpHG for the purpose of possible conflicts of interest

The author does not currently invest in the securities discussed or in the underlying.

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