U.S. Treasury yields plummeted on Tuesday after weaker-than-expected U.S. consumer price index data reduced the likelihood of additional central bank tightening and weakened the case for keeping interest rates at elevated levels for an extended period.
The move in the fixed-income space sent the broader U.S. dollar reeling, with the DXY index plunging more than 1.5%, its worst daily performance since November 2022. Against this backdrop, the euro and British pound broke out to the topside, hitting multi-week highs against the greenback.
Gold prices also posted solid gains and managed to consolidate decisively above the 200-day simple moving average, a bullish technical signal. For its part, the Nasdaq 100 catapulted to its best levels in almost four months, coming within a hair’s breadth of reclaiming its 2023 peak.
With traders declaring victory in the fight against inflation and already pricing in aggressive rate cuts for 2024, recent market moves may gain traction and consolidate in the near term. This could mean more downside for yields and the U.S. dollar, along with additional gains for precious metals and stocks.
This piece scrutinizes EUR/USD, GBP/USD, the Nasdaq 100, and gold prices from a technical perspective. We delve into significant price levels that require attention following Tuesday’s noteworthy moves across key assets.
For a comprehensive assessment of the euro’s medium-term prospects, make sure to download our Q4 outlook!
