GLOBAL STOCKS RECOVERY ACCELERATES AS VOLATILITY INDEX FALLS

Global stocks continued their recovery as investors shrugged the rising inflation and the ongoing fear of higher interest rates. In the United States, futures tied to the Dow Jones rose by 113 points while those linked to the S&P 500 and Nasdaq 100 rose by more than 0.63%. The same trend happened in Europe, where the DAX, FTSE 100, and CAC 40 rose by over 0.50%. The rebound comes at a time when the closely watched fear and greed index has moved from the extreme fear zone to the current 28. The VIX index, which is a good measure of volatility, has dropped by more than 20% in the past seven days. The key earnings to watch this week will be Nike, General Mills, and McCormic.

The price of crude oil rose slightly as investors priced in more demand and limited supplies in the near term. The main catalyst for the jump was the latest Iran satellite launcher test that happened days before talks. The ongoing talks are about the country’s nuclear ambitions, and they come a few years after Trump exited the nuclear deal. The recovery also comes a few days before the upcoming talks between President Joe Biden and Saudi Arabia’s Salman. Biden hopes that he will persuade the kingdom to increase production as inflation in the US keeps rising. The average gasoline price has jumped to $5 in the country.

The US dollar index retreated slightly as investors waited for the upcoming economic data from the United States. The country will publish the closely watched durable goods orders today. Analysts expect the data to show that orders declined in May as inflation rose. The country will also release the latest pending home sales data. The most important numbers will be the upcoming consumer confidence numbers that are scheduled for Tuesday. With inflation soaring, analysts expect that confidence dropped to 100 from the previous 106. Consumer confidence is an important gauge of the state of the American economy.

EURUSD

The EURUSD pair has been in a slow bullish trend in the past few days. It is trading at 1.0570, which was the highest point since Tuesday last week. The pair has formed an ascending triangle pattern that is shown in green. In price action analysis, this pattern is usually a bullish sign. The price is also slightly above the 25-day and 50-day moving averages while the RSI has been rising. Therefore, the pair will likely keep rising as bulls target the key resistance at 1.0600.

ETHUSD

The ETHUSD pair moved sideways even as American stocks rose. It is trading at 1,220, which is slightly below last week’s high of 1,225. It is slightly above the 25-day moving average on the four-hour chart. The MACD and the RSI are moving sideways. It has also formed a small ascending triangle pattern. Therefore, the pair will likely have a bullish breakout if American stocks continue rising.

NAS100 

The Nasdaq 100 futures continued rising as the tech rebound gained steam. It is trading at $12,180, which is higher than the important support at $11,780. It is also above the 25-day moving average and the Relative Strength Index has moved above the overbought level. Therefore, the index will likely keep rising as market volatility falls. The next key resistance level to watch will be at $12,400.