Bearish Patterns Emerge as Indices Hit New Highs
21 May 2024
Welcome to Tuesday, traders. Today, the market is buzzing with several key events and interesting movements. The calendar is packed, starting with speeches from ECB President Christine Lagarde and Treasury Secretary Janet Yellen at the Frankfurt School of Finance. Their comments on the current state of the economy and monetary policy will be closely watched. Later, we anticipate the Canadian inflation report, with CPI expected to come in at 0.5% on a monthly basis. The day wraps up with a speech from Bank of England Governor Andrew Bailey, scheduled for the middle of the American session, post-European close.
In market headlines, there's potential cooperation news between NVIDIA and Dell, setting the stage for NVIDIA's earnings report on Wednesday. Indices are pushing higher, reaching new long-term highs yesterday, though they did not hold these levels, creating potential bearish setups. For instance, the Dow Jones has formed a bearish engulfing pattern at local highs, which often signals a sell opportunity.
In the forex market, the British Pound shows strength, alongside gains in the American Dollar. Conversely, the weakest currencies today are the Australian Dollar, New Zealand Dollar, Japanese Yen, and Canadian Dollar. The most affected pairs include AUD/USD and NZD/USD, while the strongest movements are seen in GBP/JPY and USD/JPY.
Commodities experienced higher volatility yesterday. Oil attempted to break key resistance but failed and is now trading lower. Silver and gold flirted with long-term highs but ended the day with a reversal, indicating a potential bearish correction ahead. We also observed weakness in the Swiss Franc yesterday, and although we might see a correction today, the long-term outlook suggests continued weakness for the Franc, with pairs involving the Swiss Franc poised for gains.