Weekly Market Recap: April 8 – 12, 2024

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Inflation fears and shifting expectations around the Federal Reserve dominated the markets this week. Stubbornly high consumer price data dashed hopes for near-term rate cuts, sending stocks tumbling and strengthening the US dollar. Investors are bracing for a potentially extended period of high-interest rates. On a brighter note, Apple shares surged on optimism surrounding its potential in the AI space, with market anticipation high ahead of the company’s WWDC event in June. Debate continues over the impact of Bitcoin’s halving on price action, even as the crypto climbs to new heights. Regulatory scrutiny remains a concern for the cryptocurrency market. Oil prices eased as ceasefire discussions progressed in the Middle East, though ongoing uncertainty surrounding Iran could limit further decline. Gold continued its historic rise, reaching another all-time high as investors seek a haven amid inflation concerns.

 

Stock Market Performance

The S&P 500 shed gains as inflation concerns weighed on investor sentiment. The index remains consolidating, with analysts wary of further headwinds. Tech stocks were hit especially hard, with the Nasdaq Composite feeling the pain from rising interest rates. Bucking the trend, Apple shares soared on AI optimism ahead of significant announcements expected at WWDC.

The index has been trading around 5,200 in a consolidation phase that has lasted about seven consecutive sessions. Volatility has decreased significantly, as shown by the Bollinger Bands. In addition, the RSI oscillator shows there is no significant trend in the market at the moment, so the sideways movement could persist in the future.

 

Forex Market

With the expectations of higher rates for longer, and after the ECB signalled rate cuts sooner than the Fed’s cuts, the EURUSD has been significantly affected. The dollar has gained significant strength in the last two days, trading closer to the $1.0720 weekly support, which continues to limit lower lows for the pair. The 200-day moving average is now the most significant resistance for the price at $1.0828, and the RSI oscillator shows bearish momentum for the EURUSD. However, there is still room for lower lows before the markets enter an oversold condition.

 

Commodity Markets

Oil prices experienced volatility but ultimately found support thanks to a pause in the Israel-Gaza conflict, offsetting fears of rising US crude stockpiles. Gold extended its historic bullish rally, undeterred by high interest rates and showcasing its safe-haven appeal. On March 28, the price of gold broke the bullish channel it had been in since October 2023. Gold is getting closer to the upper boundary by projecting a second bullish channel above, which is the next significant dynamic resistance for the price. The Bollinger Bands show that volatility has increased significantly.

For Oil, the price has been consolidating around $90 per barrel. The market has gotten out of an overbought condition recently, which limited it to reach higher highs. With the current levels of uncertainty, the price could hover around $90 and $87.61, which is the closest support for Brent.

 

Cryptocurrency Corner

Bitcoin’s price surge sparked questions about the impact of the halving and the role of narratives in driving volatile rallies. Regulatory scrutiny of the cryptocurrency market remains a key concern. Bitcoin remains above $70,000, and its 20-day moving average remains the most significant support for the price. The all-time high at $73,862.16 is the next resistance that Bitcoin should break to reach higher highs. The RSI oscillator shows no signs of significant bullish or bearish momentum for the price.

 

The Week Ahead

Apple’s quarterly results in early May will shed light on investor sentiment and the company’s AI progress. The next major Fed meeting will be closely watched for any signals about interest rate trajectories. Ongoing geopolitical tensions in the Middle East and Eastern Europe remain a potential market wildcard.