Trading Central--MORNING MARKET UPDATE

Market Wrap: Stocks, Bonds, Commodities

On Monday, U.S. stocks closed slightly higher after a volatile session. The Dow Jones Industrial Average edged up 6 points (+0.02%) to 34,624, the S&P 500 added 3 points (+0.07%) to 4,453, and the Nasdaq 100 was up 22 points (+0.15%) to 15,225.

Investors were concerned that rallying oil prices would push up inflation and cause the central bank to keep interest rates higher for longer. U.S. WTI crude futures advanced $1.40 to $92.17 a barrel.

Meanwhile, U.S. Treasury Secretary Janet Yellen said she saw no signs the U.S. economy is entering a downturn.

Technology hardware & equipment (+1.43%), insurance (+1.01%), and energy (+0.68%) stock sectors gained the most, while automobiles (-3.07%), real estate (-0.91%), and telecom services (-0.83%) came under pressure.

Pfizer (PFE) declined 1.26%, as the pharmaceutical giant gave a disappointing forecast regarding the expected adoption of the newly-approved Covid-19 booster vaccine in the U.S.

Moderna (MRNA) sank 9.12%.

Nikola Corp (NKLA) surged 33.61%. The maker of hydrogen-electric vehicles appointed Mary Chan, formerly president of General Motors, as its new chief operating officer.

Meanwhile, Tesla (TSLA) dropped 3.32%. Goldman Sachs lowered its forecast of the company's earnings for 2023 and 2024.

Arm Holdings (ARM) slid 4.53% after it was rated "underperform" by wealth management advisor Bernstein.

The U.S. 10-year Treasury yield retreated 3.2 basis points to 4.301%.

Regarding U.S. economic data, the National Association of Home Builders (NAHB) housing market index dropped to 45 in September (vs 51 expected).

European stocks closed lower. The DAX 40 slid 1.05%, the CAC 40 declined 1.39%, and the FTSE 100 was down 0.76%.

Gold price rose $10 to $1,934 an ounce.

Market Wrap: Forex

The U.S. dollar softened a bit against other major currencies. The dollar index declined to 105.09.

EUR/USD gained 34 pips to 1.0691.

USD/JPY retreated 27 pips to 147.58.

GBP/USD edged up 3 pips to 1.2386, and AUD/USD added 7 pips to 0.6439.

USD/CHF edged up 3 pips to 0.8972.

USD/CAD fell 38 pips to 1.3487. Canada's data showed that producer prices grew 1.3% on month in August (vs +0.5% expected), and the number of housing starts amounted to 252,800 in August (vs 250,000 expected).

Bitcoin showed upward momentum, exceeding the $27,000 level before retreating to $26,860.

EUR/USD Intraday: bullish bias above 1.0670. 

Pivot:

1.0670

Our preference:

Long positions above 1.0670 with targets at 1.0710 & 1.0725 in extension.

Alternative scenario:

Below 1.0670 look for further downside with 1.0655 & 1.0640 as targets.

Comment:

The RSI calls for a bounce.

GBP/USD Intraday: key resistance at 1.2405.

Pivot:

1.2405

Our preference:

Short positions below 1.2405 with targets at 1.2370 & 1.2350 in extension.

Alternative scenario:

Above 1.2405 look for further upside with 1.2425 & 1.2445 as targets.

Comment:

As long as 1.2405 is resistance, look for choppy price action with a bearish bias.

USD/JPY Intraday: consolidation.

Pivot:

147.80

Our preference:

Short positions below 147.80 with targets at 147.50 & 147.35 in extension.

Alternative scenario:

Above 147.80 look for further upside with 147.95 & 148.10 as targets.

Comment:

The RSI is mixed with a bearish bias.

Gold Intraday: towards 1945.00. 

Pivot:

1926.00

Our preference:

Long positions above 1926.00 with targets at 1939.00 & 1945.00 in extension.

Alternative scenario:

Below 1926.00 look for further downside with 1921.00 & 1916.00 as targets.

Comment:

The RSI is bullish and calls for further upside.

Crude Oil (WTI)‎ (V3)‎ Intraday: further upside. 

Pivot:

91.40

Our preference:

Long positions above 91.40 with targets at 93.00 & 93.80 in extension.

Alternative scenario:

Below 91.40 look for further downside with 90.75 & 90.20 as targets.

Comment:

The RSI shows upside momentum.