US30 Hurts from Renewed Covid Fears

  • US30


The index posted its worst day of the year on Friday, wiping out more than a thousand pips, as news of the Omicron variant wreaked havoc in the markets. Sentiment normalized on Monday, allowing US30 to register a rebound, but today it takes another nosedive.

The catalyst that fuels today's new risk-off waves, seems to be comments by Moderna's CEO Stéphane Bancel on Financial Times about lower efficacy of vaccines against the new Covid-19 variant.

US30 erases most of its "October Low/November Record High" advance, breaching the lower part of the Daily Ichimoku Cloud and posting new November Lows. It is now exposed to the broader 34,251-34,080 area, which includes the 76.4% Fibonacci of the aforementioned advance and the 200Day EMA. A break below this level will open the door for a larger decline towards 33,534.

On the other hand, the index reacts around 34,700 and from a technical prospective, a return back above 35,000-52 is likely, although a significant improvement in sentiment will be required for moves towards and past 35,304.

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Volatility has increased significantly in the course of the last few days and has led to outsized moves, as fear and uncertainty around the Omicron variant has rattled markets. As such, caution is warranted and the technical approach is in the background.

Past Performance: Past Performance is not an indicator of future results.

Past Performance: Past Performance is not an indicator of future results.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.


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