The Nasdaq 100 index sell-off persisted on Monday as US bond yields continued rallying. The tech-heavy index declined by over 300 points, pushing it to a correction territory. Other indices like the Dow Jones and S&P 500 declined as investors worried about the tightening by the Federal Reserve. Analysts believe that the Fed will start winding down its pandemic-era actions like low interest rates this quarter. Some of the worst performing tech companies were SoFi Technologies, Robinhood Markets, Bumble, Etsy, and PagerDuty among others.
The biggest announcement in corporate America came from Take Two Interactive, the company behind games like Grand Theft Auto and Midnight Suns. The firm announced that it would acquire Zynga, the company known for Farmville and Zynga Poker in a $12 billion deal. The purchase price is a 64% premium for the company. Activity in the game industry has been high recently. Microsoft acquired Doom in a $7.5 billion deal while Electronic Arts bought Glu Mobile. Later this week, focus will be on corporate earnings.
The US dollar index rose by 0.30% in the overnight session as investors continue assessing the recent economic data from the United States. Data showed that the labor market is still going strong in the country as the unemployment rate declined to 3.9%. Later today, the currency will react to a testimony by Jerome Powell, who will likely provide more guidance on the state of the economy and potential actions. Other Fed members who will speak include Loretta Mester and Esther George.
NAS100
The four-hour chart shows that the Nasdaq 100 index has been in a strong bearish trend in the past few weeks. Any attempts to buy the dips have all failed. The index also managed to move below the key support at $15,505, which was the lowest level on December 20th. It also slumped below the 25-day and 50-day moving averages. Also, the index moved to the lower side of the Bollinger Bands while the Average True Range (ATR) jumped to the highest level since December. Therefore, the index will likely keep falling this week.
EURUSD
The EURUSD pair declined to a low of 1.1285 as the US dollar index rose. That price was slightly below the lower side of the ascending trendline. It is along the 25-day moving average while the Relative Strength Index (RSI) is at a neutral level. The pair is also slightly above the green dots of the Parabolic SAR. Therefore, the pair will likely remain in this range today.
EURCHF
The EURCHF pair jumped to the highest level since November 26th after strong jobs numbers from the European Union. The pair rose to 1.0480, which was substantially higher than last month’s low of 1.0325. On the four-hour chart, it has moved above the 25-day moving average while the average true range has tilted higher. Therefore, the pair will likely keep rising today although a brief pullback cannot be ruled out.
