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Weekly Outlook | Volatile stock markets amid weak NFP data
Updated Updated Mon, 2025 February 10 06:23
Important events this week:
Last week, stock markets ended on a shaky note. In general, the upside trend seems intact but most indices offered slight bearish momentum during late trading on Friday. Markets finished the day in the red with the biggest losers once more being the big tech companies from the US. This week is mainly offering insights for the US economy. Furthermore, Donald Trump’s political bombshell in regards to the Gaza strip might still cause volatility in markets. Especially the Arabic World will be on alert, potentially causing oil prices to remain volatile. Upcoming news events might also stir up the Greenback so caution while trading the Dollar should be applied.
– US Consumer Price Index – The consumer price index might offer further insights into the US economy. After disappointing employment data last week, the Greenback might act volatile during this release. The data from January shows a slight increase in prices on a monthly basis. The yearly figure also rose from 2.7% to 2.9%. Reason enough for the Fed not to cut interest rates in the near future. We will now take a look at the Nasdaq100 stock index.
Last week the market fell after disappointing NFP data. Rising volatility caused the index to break to lower levels off the technical resistance line. Should now also the 50- moving average at around the 21,300 level give way, the tech index might fall further. The next strong support zone might only be found at the level of 21,800. Falling consumer prices would hint to the Fed rather cutting interest rates soon, which would be positive for the stock index. Yet, the current potentially stagnating trend in consumer prices might be a reason for the index to fall further. Markets currently seem prone for further profit taking ahead. The data will be published on Wednesday, 12th February at 14:30 CET.
– UK – gross domestic product – The gross domestic product is a lagging indicator but in light of the Pound currently being volatile might offer further insights into the UK economy. In this case we like to focus on the GBPJPY currency pair, which we haven’t analyzed in a while. The weakening Pound currently meets the Japanese Yen, which keeps gearing up steam.
The daily chart above shows a clear break of the important support zone at 189.00. Prices could now move toward the next support level at 185.00. Recent data was rather disappointing; however, a better-than-expected result might lead to rising prices. Any retracement higher towards the aforementioned resistance area could then be taken as a selling opportunity. Only a break above the psychological 190.00 area might unleash fresh upside potential. The data will be published on Thursday, the 13th of February at 08:00 CET.
