The trend of the US dollar first suppressed and then rose last week verified the effectiveness of its previous upward breakthrough.
Although there are not many surprises in the news, the market sentiment is quietly changing. The U.S. stock index stagnated before the historical high, and crude oil will soon reach the real test area. On the premise of relatively low volatility, there is little chance of rapid market reversal, but the action of changing rhythm and direction seems to have started slowly.
The expectation of oil price has been repeatedly mentioned in previous contents. As an important leading reference index, our observation of crude oil is continuous. After standing at the high point of last year's interval, the momentum of bulls looks fairly good. However, the real challenge of 93/94 pressure area will come soon. This time, the risk of rising, falling and reversing downward can not be ignored.
The strong rebound of crude oil this year is largely driven by the production reduction actions that are more United with oil-producing countries, and the demand side has not performed very well. Moreover, mainstream crude oil research institutions also expect that the overall demand may continue to decline due to the impact of Chinese demand next year. In this environment, it is impossible to effectively break through the strong resistance level only by controlling the supply side. Moreover, in the recent news, we also saw signs of loosening within oil-producing countries, which is not conducive to the continued upward movement of oil prices.
At the same time, the US stock index has taken the lead in showing signs of being blocked before the high level, and the high correlation between oil and stocks is self-evident. On the last trading day of last week, S&P reversed its daily level, engulfing all the intervals of the first four trading days, leaving an obvious overhead line on the weekly chart, and the hanging line of the previous week all suggested that the market might reverse downward.
At present, it is still too early to confirm that the rebound of US stocks has ended, but it is still necessary to make such preparations. The follow-up progress can pay attention to NVIDIA, the leading stock of AI concept which is popular this year. A further 10% or so drop would break through the $400 key level and lead to a breakdown in the weekly line since last August. The end of the conceptual bull market will also mean the arrival of a comprehensive pullback/retracement of the US stock index.
On the whole, the trend of foreign exchange market is relatively leading,If the directivity of the US dollar continues, it basically means that the risk-off model will dominate the rest of this year. For core risk assets such as US stock index and crude oil, although it is not yet time to short next time, potential variables can be prepared in advance. In the future, if there is synchronous matching on the news surface or fundamentals, you can choose to take advantage of the trend more actively.
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