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Chart of the day - Nasdaq sank, gold popped ahead of the US March CPI


The Asia equity markets extend losses in the early session on Tuesday, and the US stocks’ futures sank further ahead of the US March CPI data due tonight. Since Monday, risky assets have been slashed on concerns of another hyperinflation that would further convince the US Federal Reserve for a half-percentage rate hike in May. The consensus calls for an 8.4% YoY increase in the headline CPI and a 6.5% YoY increase in the core CPI in March, with an unusual wide divide between headline and core CPI, thanks to the war-induced supply shocks. Price spikes in energy and foods are expected to be the biggest contributors to the price increase, which will bring the headline inflation to the highest level since 1981.

The US stocks, typically in the growth sector, are facing ongoing pressure amid the Fed’s accelerating tightening pace on the monetary policy. The tech-heavy index, Nasdaq, fell 6% Month to Date, heading to the March low at 13,000. At the same time, the safe-haven asset, gold, build on the momentum to test the key resistance.

Nasdaq (Cash) – Daily (an ongoing medium-term downside pressure with an imminent rebounding opportunity)

Click to see the enlarged chart

Key technical elements:

  • The one-hour chart forms a descending wedge pattern, indicating a potential imminent rebounding at the key support at 23.60% of the Fibonacci retracement at 13,867, with key resistance at 14,400 (Fib. 38.20%).
  • Stochastic falls into the oversold territory but no clear signs of a bottom reversal just yet. The bulls need to take time to confirm for rebounding.
  • MACD formed a dead cross, suggesting the ongoing medium-term price pressure, in which the zero line is a critical gauge to divide uptrend and downtrend. If MACD crossed down the zero line, the downside momentum may build further and bring the price down to the March low at 13,000.

Key price levels:

Supports: 13,867, 13,000

Resistances: 14,400, 14,771


Gold (cash) - Daily

Click to see the enlarged chart

Key technical elements:

  • The 4-hourly chart indicates the gold price is most likely to continue moving in the ascending channel, with the key near-term support at 1,949, and the key resistance at 1,970.
  • MACD tilts up, with downside momentum fading, hinting the gold may keep gaining upside momentum in a medium-term. However, the trend needs to coordinate with other indicators, such as Stochastic, which is heading into the overbought territory.
  • Stochastic rises into the overbought territory but no clear signs of top, suggesting the bullish momentum may continue to build and test the key resistance at 1,981 (Fib. 50.00%). But sell pressure may near if overbought territory is reached but price lagged on gains.

Key price levels:

Supports: 1,914, 1,890

Resistances: 1,970, 1,980




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