Home > Market Recap: Higher Yields and Nasdaq 100 Weakness to Start the Trading Week

Market Recap: Higher Yields and Nasdaq 100 Weakness to Start the Trading Week

Nasdaq 100 triggers some weakness in the US equity markets. The tech index declined after a double-top formation above 14,000 points.

The story of the new trading week comes from the Nasdaq 100 index. The index, representative of the tech sector in the United States, had a rough start of the trading week. It dropped sharply in the North American session, triggering corrections on other indices too.

So far, it has found support at the 13,200 area, but only a few days ago the Nasdaq 100 traded above 14,000. The move lower weighed on the AUD/USD pair, which religiously followed the stock market higher during the pandemic.

The US dollar gained some ground on the back of the stock market weakness. Also, the move higher in the US 10-year yields supported the dollar as well.

Commodities had a mixed day, with the WTI crude oil price falling below $65 and natural gas correcting as well. Gold did not react to the weakness in the tech sector, and remains bid while above $1,830. The focus this week is on the US inflation data, so the chances are that the precious metals will consolidate until the release later in the trading week.

Daily Analysis

Bank of England Governor Bailey is due to hold a speech about term rates and loan market developments. The British pound strengthened in the last trading sessions, especially against the euro and the US dollar. An entire “army” of FOMC members will hold speeches in the North American session, making sure the market understands the Fed’s forward guidance.

Markets to Watch

Nasdaq 100, AUD/USD, USD/CAD  – markets in focus today.

Nasdaq 100

The Nasdaq 100 index formed a double top above 14,000 and has corrected ever since. A double-top formation, as the name suggests, forms at the top of a rising trend, and the rejection is characterised by a series of lower lows and lower highs. Also, the price action remains below the dominant bearish trendline.


The AUD/USD daily timeframe shows the Aussie pair’s resilience. Despite opening the week higher, it still struggles at resistance. A move below the horizontal line should trigger more weakness. 0.70 looms large on any further Nasdaq 100 weakness.


The Canadian dollar’s strength remains a mystery to many traders. During the COVID-19 pandemic, the price of oil recovered from its April 2020 lows. It has moved back to above $60, but has consolidated in this area for some months now. Nevertheless, the USD/CAD pair continued its decline, decoupling from the oil price. Also, despite the worse-than-expected Canadian jobs data last week, buyers keep bidding for the Canadian dollar.

The technical picture shows a possible inverse head and shoulders pattern, but only if the market breaks the series or lower lows and lower highs. Until then, bears are in control.

Winners and Losers

Nasdaq 100 is the loser of the week so far, while the British pound trades with a bid tone.

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