Nasdaq 100, S&P 500, US Dollar, Volatility, ECB, BoC

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Market volatility accelerated last week, with the Dow Jones and S&P 500 posting their worst performance since June. Meanwhile, the highly technological Nasdaq 100 fell the most since March. The VIX’s “fear gauge” has climbed the most since June. In FX, the safe haven US dollar outperformed most of its G10 counterparts. Crude oil linked to growth faltered.

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Historically speakingSeptember generally brings volatility back to financial markets as traders slowly come back from the summer lull. This time around, there are concerns about the high valuations of information technology stocks. An optimistic US employment report for August appears to have helped offset Thursday’s dismal ISM services.

The new week is cut short by the Labor Day holiday in the United States on Monday, draining liquidity and increasing the risk of volatility. As such, the breaking news of the weekend could make the market mood worse. Since the stock bottom in late March, prolonged stock sell-offs have been scarce, with most of the world’s central banks accommodative monetary policy parameters.

This could be tested again, not just this week, but this month, as the 2020 US presidential election approaches. On tap, the European Central Bank (ECB) and the Bank of Canada (BoC) for traders in euros and Canadian dollars, respectively. What else do financial markets face in the short term?

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Fundamental forecasts:

Euro forecast: Major resistance now for EUR / USD at 1.20 as ECB meets

Thursday’s European Central Bank meeting will likely end with confirmation that the ECB will do everything in its power to prevent EUR / USD from strengthening above 1.20.

Canadian dollar considers Bank of Canada rate decision as Covid-19 cases rise

The Canadian dollar could fall if the Bank of Canada’s rate decision increases the selling pressure alongside gloomy economic data in the United States.

Gold Price Forecast: US Dollar, Treasury Yields Diverge and Boost Trend

Gold prices can trade within the range as XAU / USD echoes the divergence between Treasury yields and the US dollar. What could be a downside risk for the yellow metal?

Sterling (GBP) remains under pressure as EU / UK trade talks stall

The latest comment from the EU / UK trade talk suggests that talks are going nowhere, with both sides refusing to budge from their initial positions.

Nasdaq 100, DAX 30, CAC 40 and Nikkei 225 forecasts for the coming week

Equity markets suffered a sharp turnaround last week despite encouraging economic data from the United States. Now, investors will keep a close eye on the performance of tech stocks for further clues.

Technical forecasts:

USD / MXN Week ahead: bearish pressure looks set to continue

Dollar continues to lose ground against peso despite better than expected NFP figures

US Dollar Outlook: DXY Holds Key Support As Bearish Flag Emerges

The US dollar’s attempt to recover to start September may prove short-lived as the greenback’s fall through long-term support suggests prolonged losses.

AUD / USD Forecast: Breaking Trendline Support Opens 50-Day SMA

AUD / USD appears to have established an uptrend in H2 2020, but a breakout of trendline support could open the 50-day SMA (0.7120).

Dow Jones, S&P 500, Nasdaq 100 Forecast: Are the bears taking back control?

Sellers made a rough reappearance this week after a solid string of trends developed since March. The big question now is how long could bears hang out?

WEEKLY PERFORMANCE OF THE US DOLLAR AGAINST CURRENCY AND GOLD

Currency vs USD, Yen, Pound, Gold, Aud, NZD Chart

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