The market awaits news of Jerome Powell and the OPEC+ meeting

March 04, 2021 14:30

For yet another week, the markets are still awaiting the evolution of the yields on US bonds and the problems it may bring to the markets, as we see falls in US indices namely the falls in the Nasdaq, due to the fact that the increase in the cost of financing hurts technology companies due to their structure and growth profile, affecting corporate profits.

A few days ago, Fed chairman Powell spoke in front of Congress in an attempt to lessen the fears of inflation, and today, the market will once again be waiting for his statements regarding the possible measures taken in response to the yield curve. 

The OPEC+ meeting is another catalyst for today since the market is awaiting the possibility of a decision on whether to reduce production or maintain the current measures until next April.

An increase in oil production could lower the price in the short term, but if it is decided to maintain the current production rate, the price could be supported.

Analysis of the NQ100

The short-term falls on the Nasdaq have confirmed a breakdown of the bullish channel that it had been following in recent months, after breaking its average of 200 (in red) and the bearish cross of its short and medium-term moving averages (black and orange)

In addition, this movement was supported by strong growth in the negative territory of the MACD after the break of the channel, despite the accumulated overselling in the stochastic indicator, which led to the price to look for its 100% fibonacci retracement level of the last bullish momentum in the lower band of the channel.

In recent days, the price has bounced twice at the 100% fibonacci level, but finally, after a last bearish rebound in its 200-session average in the zone coinciding with the 61.8% fibonacci level, the price has achieved breaking down this important level, thus heading to its current support level that previously acted as resistance in the lower red band.

It is very important to see if the price is able to maintain this level of support, as a break down from this could increase the dips to the 161.8% fibonacci level.

Source: Admiral Markets MetaTrader 5. H4 chart of the NQ100. Data range: from September 29, 2020 to March 4, 2021. Prepared on March 4, 2021 at 1:00 p.m. CET. Keep in mind that past returns do not guarantee future returns.

Price evolution in the last 5 years:

  • 2020: 43.64%
  • 2019: 35.23%
  • 2018: -3.88%
  • 2017: 28.24%
  • 2016: 7.50%

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