Equity markets extended gains overnight as risk appetite continues to improve. The technology sector was the best performing one at the start of the new trading week, as investors are turning again to riskier stocks.
The USTECH index hit new record highs on Monday and further gains appear likely as inflation concerns continue to ease. Bulls are likely to eye the 14,320/26 support area for buying opportunities, followed by the 14,237 support level. The RSI on the Hourly chart is hinting at slightly overbought conditions, but the Daily RSI remains below 70, hinting that there might be further room to the upside.
Meanwhile, Cocoa managed to bounce off the major $2332 support level once again. This is giving bulls hope of a recovery in the near-term. However, the commodity is facing strong resistance in form of the falling trendline from the May 21 high. A clear break above this line could pave the way for a short squeeze that might push Cocoa prices towards $2470 resistance.
Things are looking better for Coffee, which managed to gain significant momentum in the past few days. This is due a smaller output in Brazil and disruptions to the supply chain. The break above the falling trendline from the early June high and $155.10 resistance level may signal a continuation of the rally towards $166.54. Considering that the broad uptrend remains intact, and bulls clearly have the upper hand, traders see the probability of another test of $166.54 resistance as reasonably high.
While the FX market might remain quiet ahead of Friday´s NFP release, cryptocurrencies will not lack volatility. Ethereum managed to regain some ground following another sharp sell-off that saw the cryptocurrency tumbling below $1700. The next major resistance level lies now at $2300, and a clear break above this level could pave the way for a recovery towards $3000. However, whether cryptocurrencies will see a sustainable recovery will depend on whether investors can accept that further regulation is inevitable. With the crypto market growing rapidly, governments are likely to take a more active role in regulating it.
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With equity markets rising to fresh record highs in the United States and Europe, risk appetite is rising again