Nasdaq 100, S&P 500, Gold, US Dollar, NZD/USD, RBNZ, Thanksgiving

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Global market sentiment has been a mixed bag this past week. It was a relatively disappointing 5 days for Wall Street, as the tech-heavy Nasdaq 100 fell 1.57% while the S&P 500 fell 0.69%. Things looked relatively bright in Europe. The DAX 40 and FTSE 100 rose 1.46% and 0.92% respectively. In the Asia-Pacific region, the Nikkei 225 weakened by 1.29% while the Hang Seng rose by 3.85%.

Wall Street’s relatively disappointing performance relative to the rest of the world was likely due to a combination of Fedspeak and economic data. While Fed officials alluded to a slower pace of tightening, they also stressed the need for continued rate hikes. Meanwhile, US retail sales surprised to the upside, highlighting the economy’s resilience to rising interest rates.

Following increased bets on the Fed’s rate hike last week, the US dollar has found some momentum against its major counterparts – see chart below. The British pound was mostly unscathed despite a UK budget announcement that included elements of fiscal tightening to help fight rising inflation. Gold and crude oil prices have weakened.

The markets are heading for a restrained trading week due to the US Thanksgiving holiday. While Wall Street will only be closed on Thursday, expect lower levels of activity and liquidity in the days before and after. That doesn’t necessarily mean volatility will be contained, but the economic record is light.

The most notable risk event is the FOMC meeting minutes, which could continue to underline the opportunity for tightening, albeit at a slower pace. The equivalent of the European Central Bank will also cross the wires for the euro. The Reserve Bank of New Zealand is expected to lift rates to 4.25% from 3.50%, paving the way for volatility in the NZD/USD pair. What else is in store for the markets in the coming week?

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How the Markets Have Behaved – Week of 11/21

Key predictions:

British Pound Weekly Forecast: GBP/USD Repairs Recent Damage

GBP/USD is targeting 1.2000 again as a resilient pound and weaker US dollar lift the pair.

Aussie Dollar Outlook: Trapped in US Dollar Maelstrom

The Australian dollar was disrupted by US dollar gyrations last week as data and geopolitics had markets racing from pillar to pillar, guessing where the Fed is headed.

Euro Price Forecast: ECB Reflects on QT vs. Rate Hikes, EUR/USD Didn’t Move

A gloomy week ahead for the euro as EUR/USD looks for a key catalyst as the ECB’s tug of war continues between dovish and hawkish.

New Zealand Dollar Forecast: RBNZ Weighs Inflation Against Global Headwinds

The RBNZ decides to hike by 50 or 75 basis points next week, where forward guidance remains key. Stubborn inflation and a worsening global outlook complicate the decision.

Dow Jones, Nasdaq 100, S&P 500 forecast: Thanksgiving means illiquidity, but volatility?

The Dow Jones, Nasdaq 100 and S&P 500 took a step back last week as Fedspeak and retail sales underlined a hawkish central bank. Thanksgiving brings illiquidity, but what about volatility?

Technical forecasts:

Gold and Silver Technical Forecast: Recent gains at risk as price action suggests further downside

Gold and silver have both enjoyed significant rallies to the upside of late. Both remain at risk of deep retracements next week, with the dollar index likely to be key.

Bitcoin (BTC), Ethereum (ETH) prices stable – FTX contagion spread

Bitcoin and Ethereum managed to cushion the steep price drop as technicals helped drive the weekly move. FTX contagion spreads to Genesis and Blockfi.

S&P 500 and Dow Jones Industrial Average Technical Outlook: Rally to Pause?

The recent rally in the S&P 500 and the Dow Jones Industrial Average may be about to stall as they test crucial hurdles. What are the levels to watch?

GBP/USD Technical Outlook: Encouraging signs for bulls

GBP/USD’s rally above the key resistance at its September high increases the odds that the worst may be over. What are the key levels to watch?

USDJPY Bearish Reversal Stalls, Are Japanese Policymakers Still Struggling?

The Japanese yen’s recovery all but stalled last week. Without USDJPY leading the way with the brute force of its liquidity and other yen crosses never really joining the turn, Japanese officials’ fears of a return to 150 could start to mount rapidly.

US Dollar Technical Forecast: EUR/USD, GBP/USD, USD/CAD, USD/JPY

The US dollar made a fresh low on Tuesday, but the bears were unable to take control after that, with a string of higher lows shown in USD on the daily chart till the end of the week.

— Article Body Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

— Individual articles composed by DailyFX team members

To contact Daniel, follow him on Twitter:@ddubrovskyFX

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