The US dollar rally has room to develop further!
Stocks rebounded on Monday, in a move that looked more like a correction than a reaction to fresh news, as there was no fresh news that went against the slowing China rhetoric, nor against the fear that we will hear something sufficiently hawkish this Friday from Jerome Powell’s Jackson Hole speech.
Tech stocks fueled the rally in the US, as Nvidia jumped 8.5% yesterday, a day before the release of its Q2 results. Nvidia would better meet its $11bn sales forecast for last quarter, otherwise, there is a chance that we will see a sizeable downside correction.
In Europe, oil stocks shouldered yesterday’s rally, as the barrel of US crude made an attempt above the $82pb, on lower OPEC+ exports and on the back of a golden cross formation on a daily chart where the 50-DMA crossed above the 200-DMA. But yesterday, that wasn’t the case. Oil’s positive attempt remained short-lived, on the contrary, and the barrel of crude is preparing to test the $80pb support to the downside again this morning.
In the FX, the US dollar broadly weakened across the board, helping majors to take some breather. But the rising real US yields will likely continue giving support to further USD appreciation.
Watch the full episode to find out more!