Are the Markets Pricing in Max-Hawkishness？

Author – Connor Woods, Senior Market Analyst

Date: October 6th

The start of Q4 has proven fruitful for the traders who believe max-hawkishness is here. Indices like the S&P500, NASDAQ100, and Dow Jones are all up this week and performing extremely well. Furthermore, the dollar is down. Is this the start of a U-turn in the markets？

Bear Market Rally？

It is widely accepted that in a bear market, short and sharp pullbacks are found. This could be exactly what investors are witnessing in U.S indices right now. Over the next coming days, critical levels are to be tested in these markets.

If the market is to continue higher from here, a key level of resistance to mark is the imbalance area marked on the chart. For added confluence, the price could test the 50% of the expansive move to the downside which began in August. This is still very much a bear market.

OPEC+ Cuts Oil Production

The worlds top oil-producing countries, including Russia, agreed yesterday to cut oil production by two million barrels per day. This is a decision that angered the Biden administration, and will likely cause petrol prices to rise globally once more. OPEC+ claims this is a move to stabilise prices which have fallen in recent months due to demand fears driven by a recession.

Congratulations if you managed to trade the recent move up in oil! The price is now reaching key resistance zones, so make sure trades are always risk-managed. The first resistance level is the order block the price currently trades in, although the move from OPEC+ could now propel prices to exceed this level and test the mid 90s.

Everyone at Zenfinex hopes you are having a great trading week. If you would like to know more about the products we offer, feel free to visit www.zenfinex.com.

Disclaimer:  Trading Foreign Exchange is highly speculative and may not be suitable for all investors. The leverage created by trading on margin can work against you and losses can exceed your entire investment. Only invest with money you can afford to lose and ensure that you fully understand the risks involved.