Risk Assets Show Some Fight, But For How Long？

Author – Connor Woods, Senior Market Analyst

Date: September 9th

With Europe set to tighten monetary policy dramatically today along with the Federal Reserve Chairman Jerome Powells press conference, risk assets are showing some fight. The question is how long can this last？

How far can NASDAQ go？

The NASDAQ has developed the label of being the worst performing U.S index of the year so far. From a trading perspective, this makes the NASDAQ the most attractive index to sell.

Yesterdays candlestick will have encouraged the bulls that stocks can begin some sort of turnaround. From a fundamental standpoint, this rally is likely to be faded after numerous key banks gave a grim view of the economy in the short term. The ideal supply zone can be found at the imbalance marked on the chart. This may offer up a premium level for traders to sell this index if the price reaction from that zone is sufficient.

The ‘take profit’ levels marked on the chart indicate the key support levels. The lowest level is at 11040 and if the price breaks below here, this would be a new 2022 low for NASDAQ100.

Russia and China Alliance Grows Stronger

Russia's energy giant Gazprom said that China will start paying for Russian gas in rouble and yuan instead of US dollars. Putin said “Trust in dollar, euro, pound has been undermined, we have cut the usage of these currencies.”

When countries receive dollars for the oil they sell, this then benefits the U.S as they then recycle those dollars back into U.S investments - providing liquidity to financial markets and keeping rates low.

Countries like China and Saudi Arabia are transitioning away from the dollar. The war has pushed the west towards NATO and the east towards a new, potential geopolitical superpower that significantly shifts the balance of world order and economic systems. The transition will be painful for markets.

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.