Weekly Market Recap May 10

An Unforgettable Event Elevating Trading Education 

Investors face a challenge in interpreting the current market landscape. Optimism in the stock market, driven by expectations of interest rate cuts, contrasts with a weakening oil sector and a stumbling cryptocurrency market. To make informed decisions, investors need to closely monitor both economic indicators and statements from key decision-makers at central banks.

Forex: EUR/USD in Holding Pattern

The EUR/USD currency pair continues trading within a tight range below 1.0800. Market indecision is evident amid a lack of major economic data releases. Investors are closely monitoring both the US Federal Reserve and the European Central Bank (ECB) for possible interest rate shifts. Weakening confidence in the US economy suggests the Fed could cut rates starting in September. In contrast, easing price pressures in the Eurozone have bolstered the ECB’s plans to lower rates starting in June.

The 100-day moving average sits at 1.0831 and is the most significant resistance above the 1.0800 level. The ADX indicator shows there is not a significant trend in the market during the week, but compared to mid-April, there has been a bullish movement in the price of the currency.

Oil Prices Weaken as Iran Ramps Up Production

Oil prices have declined significantly, with WTI crude reaching its lowest levels in nearly two months earlier in the week. Markets are reacting negatively to Iran’s plans to increase oil production this year. Rising US Dollar strength has also contributed to the decline in oil prices. While ongoing tensions in the Middle East remain a concern, some analysts believe OPEC nations will balance out any supply disruptions.

Despite the price decline, WTI has remained above its 100-day moving average but is still below $80. The market got close to an oversold condition earlier in the week but has more room for lower lows, something the WTI can only achieve if it breaks the moving average and aims for a second support at around $75.66.

Stocks Rally on Rate Cut Expectations

Stock markets have enjoyed their strongest three-day rally since November, fueled by growing expectations of Federal Reserve interest rate cuts later this year. The S&P 500 topped its 50-day moving average, a positive technical indicator. While a strong earnings season has bolstered investor optimism, this week’s relatively light economic calendar has left Fed policy as the primary focus. Comments from Fed officials will be carefully scrutinized for additional clues about the central bank’s direction.

The S&P 500 now trades above 5,200. Volatility has increased on the index as shown by the Bollinger Bands, and the RSI oscillator is getting closer to 70, showing growing interest in investors on the Index and a “positive” feeling on the market about future rate cuts on the US that could boost the rally and take the index to its next resistance at 5,300.

Cryptocurrency Market Slides as Bitcoin Falters

Bitcoin and the broader cryptocurrency market continue to face downward pressure. Bitcoin’s recent struggles, combined with slowing inflows into US spot-bitcoin exchange-traded funds and the prospect of higher interest rates, are dampening the crypto market. However, some analysts remain optimistic about Bitcoin’s long-term prospects.

Bitcoin has been consistently trading below its 20-day moving average but remains above 60,000. Additionally, the resistance at 63,562.40 keeps limiting BTC from reaching higher highs, and now the 20-day moving average is also below this level. The RSI oscillator shows a sideways market sentiment.