Forex Today: Tech Selloff Leads Global Stocks Lower

Adam Lemon

| Created on July 18, 2024

In what is widely seen as a rotation away from the tech sector, the NASDAQ 100 Index falls sharply, leading tech shares and major equity indices lower globally.

Technology shares sold off very strongly yesterday, led lower by the NASDAQ 100 Index which saw its largest 1-day drop since 2022. This is driven partly by concerns over new restrictions on US chip sales to China. The TOPIX Index fell by more than 1.5% today.
The European Central Bank will be holding a policy meeting today, at which it is expected to hold its Main Refinancing Rate at 4.25%.
Gold is one of the standout assets in the market today, after it rose at the start of this week. The price action suggests we will likely see another attempt at the record high today above $2,480. Trend traders will be interested in being long of the precious metal.
The 10-Year US Treasury Yield fell further yesterday to a new 4-month low. Some analysts see this as partly driven by the increasing belief that former President Trump will be re-elected to the Presidency in November.
In the Forex market, the US Dollar Index reached a new 3-month low price yesterday before finding some support. Since today’s Tokyo open, the Australian Dollar has been the strongest major currency in the Forex market since today’s Tokyo open, while the Swiss Franc has been the weakest. The US Dollar has failed to break above nearby resistance so is now looking weak and likely to trade lower after failing to rise. The EUR/USD currency pair made a new 3-month high yesterday and will be interesting to trend traders on the long side.
There will be a release today of UK Claimant Count Change data.
Yesterday’s release of UK CPI data came in slightly higher than expected, showing annualized inflation of 2.0%. The British Pound reacted by rising strongly for a while, with the GBP/USD currency pair trading at a new 1-year high above $1.3000.
Yesterday’s release of New Zealand CPI data came in slightly lower than expected at a new 3-year low, with annualized inflation falling to 3.3% when a rate of 3.4% was widely anticipated.