✅ Daily Market Analysis - TUESDAY AUGUST 22, 2023

Key events:

USA - Existing Home Sales (Jul)

US Treasury yields scaled their highest point in a decade, while European equities rebounded from a six-week low. Simultaneously, the Nasdaq exhibited robust growth, surging over 1% on Monday. These market movements were all underpinned by the anticipation of the forthcoming Federal Reserve meeting scheduled in Jackson Hole, Wyoming, slated for Friday.

The trading session on Wall Street unveiled a mixed bag of results. The Dow Jones Industrial Average and the S&P 500 initially gained ground but eventually relinquished those early gains. In contrast, the Nasdaq Composite, with its focus on technology, experienced a notable ascent. This surge was driven by the prevailing optimism surrounding upcoming earnings reports.

NASDAQ indices daily chart

DJI indices daily chart

Initially surging by over $1 per barrel, benchmark oil futures eventually closed lower due to dwindling expectations for Chinese demand.

In the stock market realm, Tesla Inc (NASDAQ: TSLA) witnessed a notable upswing of more than 7%. This surge was propelled by investors capitalizing on a recent dip in the electric vehicle manufacturer's stock price, a movement fueled by the encouraging sentiments emanating from Wall Street.

Baird, in particular, placed Tesla on its 'best ideas' list, underlining several favorable factors. These include the eagerly awaited launch of the Cybertruck, an increasing adoption of self-driving software, and a consistent growth trajectory within the energy sector. These potential positive forces hold the capacity to overshadow any concerns stemming from slightly softer margins as a result of recent price reductions.

Tesla stock daily chart

In the realm of currencies, the European single currency marked a 0.2% ascent, reaching a value of $1.0892. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of key trading partner currencies, exhibited a slight decline, settling at 103.35.

EUR/USD daily chart

Furthermore, the British pound ventured towards the upper edge of its established range, which spans from $1.26 to $1.28. However, the overall strength of the dollar thwarted a breakthrough. As a result, the pound retraced its steps to hover around $1.2690, engaging in a period of consolidation leading up to the weekend.

As the new trading week commenced, the pound's movement found itself confined within a narrow scope, fluctuating between $1.2710 and $1.2750. This trading range closely aligns with the parameters set during the preceding Friday's trading. Notably, if the pound manages to conclude a session above the 20-day moving average, positioned at $1.2760—a feat not achieved since July 26—it might signify the potential for another endeavor to breach the upper threshold of the established range.

GBP/USD daily chart

Gold prices saw a modest increase on Tuesday, benefiting from a softened dollar that pulled back from its two-month highs. Nonetheless, concerns regarding the potential for higher US interest rates persisted, casting a lingering shadow over the outlook for the metal markets.

XAU/USD daily chart

Following a decline to a five-month low earlier this month, the price of gold exhibited indications of a rebound. However, despite these efforts, spot prices have encountered difficulties in reclaiming the significant threshold of $2,000 per ounce. As of now, a decisive breakthrough remains elusive, leaving the market in a state of anticipation.