Financial markets continue to remain in stress following the attack on Iran. Stocks have already started moving lower before that event as general market conditions are stretched. Initially, high expenses in regards to the financing of tech companies within the AI sector seem so weigh on markets and recent news in regards to private credit risks also make the situation worse. In general, the negative sentiment in equities might continue to push stock markets down. The S&P 500 has broken below the important level of 6,500 points, which now makes the market vulnerable for further losses. Based on the weekly chart also the 50- moving average zone has been broken. This is considered negative well and can be observed in all major US indices as well.

The early signs of bearish sentiment are also being seen in other markets: Gold prices have dropped last week and silver looking equally negative. If the demand from the economy weakens, prices might fall further as well. Traders continue to offload assets, which had been previously in high demand.

The price of oil, on the other hand, remains well bid. Geopolitical tensions in regards to the Strait of Hormuz continue to escalate. If Iran is indeed trying to keep the strait closed and only allows certain ships across the global supply is likely being disrupted for months to come.

Important events this week:

– US – ADP employment change report– The ADP report will offer fresh insights into the US economy this week. The recent reading came in better than expected and showed that 69,000 jobs had been added to the economy instead of the expected 50,000. The Dollar was able to rally after the news release and rising following the recent trend of a stronger Greenback.

AUDUSD daily chart

Based on the charting pattern of the AUDUSD above, the currency pair has broken below the major support level of 0.6950 last week. This might indicate that the price could slide further. The fundamental news we outlined above would also qualify for this observation. Any retracements to the upside might be used to sell the currency pair at higher levels again within the current bearish trend. A weaker reading of the report might push the pair higher. However, negative data might as well cause the opposite. Renewed strength of the Dollar could as well occur as this might boost the Greenback as safe- haven. The report will be released on Wednesday, April 01 at 14:15 CET.

– US – Nonfarm payrolls report– The NFP report is important as well, as it is offering different insights into the US economy as compared with the ADP report. Different data sources are being used for both reports with the ADP report using real payroll payments. The NFP report uses survey data as well as statistical modelling, which oftentimes causes both reports to differ.

USDJPY, weekly chart

A currency pair, which has traditionally been reactive to the NFP report is the USDJPY. The market recently broke a technical resistance level and might now be open to rise further. A potential intervention by the Bank of Japan, who pointed out that they “watch the weakness of the JPY closely” should be kept in mind, here. The bullish trend has been cemented by the strength of the Dollar and might continue further. An initial target could be the recent high from July 2024 at about 161.75. Should the pair fall the next important support zone should be at 158.00, where fresh buyers might step back in again. The data will be released on Friday, April 03 at 14:30 CET.