AUD/USD and NZD/USD Fundamental Daily Forecast – Aussie Dollar Boosted by Strong Recovery in Jobs Market

The Australian and New Zealand Dollars are trading higher on Thursday with both commodity-linked currencies seemingly poised to resume their uptrends after a nearly three week pause. Helping to boost the Aussie and Kiwi is a weaker U.S. Dollar which is declining across the board against major peers as plans for a massive U.S. stimulus package fueled market optimism and sapped demand for safe-have currencies.

At 11:09 GMT, the AUD/USD is trading .7771, up 0.0025 or +0.32% and the NZD/USD is at .7212, up 0.0041 or +0.57%.

Many analysts expect the dollar to continue its downtrend, which saw it lose nearly 7% in 2020 amid ultra-loose U.S. monetary policy and hopes for a post-pandemic global recovery.

In economic news, the Aussie Dollar rose after a report released on Thursday showed Australia boasted another solid rise in employment in December.

Australia Unemployment Falls to 6.6% as Recovery Strengthens

On Thursday, Bloomberg reported that Australian unemployment fell in December as a big-spending government budget and a second round of central bank stimulus spurred the economy’s recovery and encouraged firms to keep hiring.

The jobless rate declined to 6.6% from 6.8% in November, beating economists’ median estimate of 6.7%, data from the statistics bureau showed Thursday in Sydney. Employment advanced by 50,000 in December, matching estimates, as did the participation rate at 66.2%.

Australia’s recovery is bolstered by the authorities’ ability to contain the virus – even accounting for recent isolated outbreaks – boosting confidence and encouraging cashed-up households to spend. That’s prompted firms to resume hiring and Australian’s to return to the labor force, tempering the impact on unemployment as participation swells, according to Bloomberg.

Among other details in today’s jobs report:

  • Monthly hours worked increased by 0.1% in December, while declining by 1.5% over the year.
  • Under-employment fell by 0.8 percentage points to 8.5% and under-utilization decreased by 1.1 percentage points to 15.1%.
  • Full-time jobs advanced 35,700 and part-time roles gained 14,300

What Bloomberg Economics Says…

“Australia’s unemployment rate may have peaked as the labor market continues to heal from the damages wrought by the pandemic. Labor force participation hit a record high in December, as employment and hours worked recovered further,” said James McIntyre, economist.

Daily Forecast

Australia’s employment data was solid news. Its economy has now recovered 90% of the number of jobs lost during the pandemic.

The focus for traders now shifts to New Zealand’s consumer inflation report, due to be released at 21:45 GMT. The report is expected to show an increase of 0.2%, down from the previously reported 0.7%.

Overall, the resumption of the rally is being driven by increased demand for risky assets, a dip in U.S. Treasury yields and a weaker U.S. Dollar.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Fundamental Daily Forecast – Traders Shrug Off BOJ, Focus Remains on Treasury Yields, Risk Sentiment

The Dollar/Yen is edging lower on Thursday amid positive risk sentiment as Asian stocks followed U.S. equities in rising to new record after Joe Biden, who has laid out plans for a $1.9 trillion pandemic relief package, was sworn in as president. The Japanese Yen traded 103.335 per dollar, stronger than levels above 104.086 against the greenback seen earlier in the trading week.

In other news, the Bank of Japan kept monetary policy unchanged on Thursday while revising up its economic forecast for next fiscal year.

At 09:40 GMT, the USD/JPY is trading 103.430, down 0.117 or -0.11%.

Bank of Japan Leaves Interest Rates Unchanged Amid Gloomy Outlook

The Bank of Japan (BOJ) left its main policy unchanged after forecasting the economy will regain more lost growth than previously thought once it starts to recover from the current state of emergency.

The BOJ held its interest rate and asset buying setting intact, according to a statement from the central bank on Thursday. All economists surveyed by Bloomberg predicted no change in the bank’s main policy levers ahead of a policy review in March.

While the bank took a gloomier view of the current state of the economy as record cases of COVID-19 keep a state of emergency in place, the BOJ concluded that weaker growth at the end of the current fiscal year and a government stimulus package announced last month will result in a stronger rebound in the year starting April.

“The growth outlook, especially for fiscal 2021, has been lifted somewhat considering the impact of the government’s economic policy,” BOJ Governor Haruhiko Kuroda said at a briefing after the board met. “There is a high degree of uncertainty, though, because the outlook can change with the trajectory of the pandemic.”

Ahead of the meeting, economists had taken the view that the bank would likely hold off on any action until it completes a review of policy at its next gathering in March. By then the economic landscape and the trajectory for the pandemic should be much clearer.

Daily Forecast

Japanese Yen traders showed little reaction to the largely in-line outcome of the meeting. There primary focus is on risk demand and Treasury yields.

In this current turned around trading environment, increased demand for riskier assets tends to drive investors into the Japanese Yen and away from the safe-haven U.S. Dollar.

However, another spike higher in U.S. Treasury yields would help boost the USD/JPY.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Track Wall Street Higher on Hopes of Massive New US Stimulus

The major Asia-Pacific stock indexes were mixed but mostly higher on Thursday with Hong Kong giving back a portion of this week’s stellar gains. Shares in the region rose after stocks on Wall Street soared to record highs as U.S. President Joe Biden was sworn into office.

Investors are hopeful the incoming Biden administration will be able to secure passage of a massive new stimulus package to cushion the economic damage of the COVID-19 pandemic.

Republicans in the U.S. Congress have indicated they are willing to work with President Joe Biden on his administration’s top priority, a $1.9 trillion U.S. fiscal stimulus plan, but some are opposed to the price tag. Democrats took control of the U.S. Senate on Wednesday, though they will still need Republican support to pass the program.

But after record high closes on Wall Street Wednesday, markets in Asia reflected relief over an orderly transition of power and strong expectations that U.S. stimulus will provide continued support for global assets.

Cash Market Performances

In the cash market on Thursday, Japan’s Nikkei 225 Index settled at 28756.86, up 233.60 or +0.82%. Hong Kong’s Hang Seng Index finished at 29927.76, down 34.71 or -0.12% and South Korean’s KOSPI Index closed at 3160.84, up 46.29 or +1.49%.

China’s Shanghai Index settled at 3621.26, up 38.17 or +1.07% and Australia’s S&P/ASX 200 Index finished at 6823.70, up 53.30 or +0.79%.

Hong Kong Stocks Snap 5-Day Winning Streak on Profit-Taking

Hong Kong stocks ended lower on Thursday, snapping a five-day winning streak, as investors locked in profits following sharp gains helped by strong demand from mainland investors.

Bank of Japan Leaves Interest Rates Unchanged Amid Gloomy Outlook

The Bank of Japan (BOJ) left its main policy unchanged after forecasting the economy will regain more lost growth than previously thought once it starts to recover from the current state of emergency.

The BOJ held its interest rate and asset buying setting intact, according to a statement from the central bank on Thursday. All 44 economists surveyed by Bloomberg predicted no change in the bank’s main policy levers ahead of a policy review in March.

Market participants showed scant reaction to the largely in-line outcome of the meeting, with stocks and the Japanese Yen little changed from levels before the decision.

Australia’s Unemployment Rate Drops to 6.6 Percent as 30,000 More People Find Work

Australia’s unemployment rate has dropped to 6.6 percent as 30,000 more Australians found work in the wake of the COVID-19 pandemic.

New data from the Australian Bureau of Statistics (ABS) showed that for December 2020, the number of employed people in the country was a figure 784,000 higher than it was in May.

Despite the dramatic recovery, the total number of employed people was still down year-on-year because of mass COVID-19 layoffs.

For a look at all of today’s economic events, check out our economic calendar.

US Stock Index Futures Testing Record Highs as Earnings Season Continues

U.S. stock futures are edging higher in overnight trading on Wednesday following a flat opening after the major cash market averages hit record highs on inauguration day.

At 07:21 GMT, benchmark S&P 500 Index futures are up 0.27%. The blue chip Dow Jones Industrial Average is trading higher by 0.16% and the tech-based NASDAQ Composite is up by 0.49%.

The early price action indicates investors have moved on from the bearish earnings report released by United Airlines after the close on Wednesday.

Major airline United dipped more than 2% in extended trading on Wednesday after missing on the top and bottom lines of its quarterly earnings. The airline warned sales would continue to suffer in the early part of 2021 as the coronavirus pandemic drags on.

Earnings season continues on Thursday with Baker Hughes, Union Pacific and Citrix reporting before the bell. Intel, IBM and CSX report after the closing bell on Thursday.

In economic news, the Labor Department will release last week’s jobless claims data at 13:30 GMT on Thursday. Economists polled by Dow Jones expect 925,000 Americans filed for unemployment last week, down from the previous week’s 965,000.

Wednesday Recap

U.S. equities rose to record highs on Wednesday as the latest batch of strong corporate earnings rolled in, as Joe Biden was sworn in as commander in chief.

The S&P 500 Index climbed 1.4%, notching an all-time high. The Dow Jones Industrial Average rose more than 250 points to close at a record and the NASDAQ Composite surged nearly 2%, closing at a record. The technology heavy index was helped by a 16% jump in Netflix’s stock on the back of the streaming giant’s strong earnings and subscriber results.

The rest of the FAANG group, due to report results in the coming weeks, jumped with Facebook Inc, Amazon.com Inc, Apple and Google-parent Alphabet Inc rising between 2% and 5%.

Eight of the 11 S&P sectors advanced in afternoon trading, with technology, communication services and consumer discretionary among the biggest gainers.

The broader banks index, however, shed about 1.6%, declining for the third day.

Earnings Results

Morgan Stanley edged higher after its quarterly profit blew past estimates driven by strength in its trading business.

Procter & Gamble Co raised its full-year sales forecast for a second time as it benefited from sustained coronavirus-driven demand for cleaning products. Its shares, however, slipped about 1.4% after it warned that the pace of sales might slow as vaccines roll out.

UnitedHealth Group Inc slid 0.3% after the health insurer’s quarterly profit slumped nearly 38%, weighed down by costs related to its programs to make COVID-19 testing and treatment more accessible for its customers.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD Forex Technical Analysis – Trend Changes to Down on Trade Through 1.2054

The Euro moved lower against the U.S. Dollar on Wednesday as the risk of extended lockdowns in Europe to combat the spread of COVID-19 and worries about the pace the rollout of vaccines weighed on the common currency.

European countries are struggling to contain the contagion of the coronavirus amid worries that a new variant of the virus could lead to more stringent lockdowns and more economic pain.

At 21:30 GMT, the EUR/USD is trading 1.2107, down 0.0022 or -0.18%.

The move is taking place ahead of Thursday’s European Central Bank meeting, which, after the broad easing of monetary policy last month, is unlikely to produce any major change.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.2054 will change the main trend to down. A move through 1.2349 will signal a resumption of the uptrend.

The main range is 1.1800 to 1.2349. Its 50% level at 1.2074 provided support on Tuesday and Wednesday. It is controlling the near-term direction of the EUR/USD.

The short-term range is 1.2349 to 1.2054. Its retracement zone at 1.2202 to 1.2236 is the primary upside target. Sellers could come in on a test of this level. They will be trying to form a secondary lower top.

Short-Term Outlook

The price action on Monday through Wednesday indicates the direction of the EUR/USD the rest of the week will likely be determined by trader reaction to 1.2074.

Bullish Scenario

A sustained move over 1.2074 will indicate the presence of buyers. If this move creates enough upside momentum then look for a possible surge into 1.2202 to 1.2236 over the short-run.

Bearish Scenario

A sustained move under 1.2074 will signal the presence of sellers. Taking out 1.2054 will change the main trend to down. This move could trigger a further break into 1.2025. This price is a potential trigger point for an acceleration to the downside with the next major target the November 23 main bottom at 1.1800.

For a look at all of today’s economic events, check out our economic calendar.

Price of Gold Fundamental Daily Forecast – Start of a Rally or Knee-jerk Reaction to Biden’s Inauguration?

Gold futures are trading higher shortly after the mid-session on Wednesday as traders continued to react positively to comments from U.S. Treasury Secretary nominee Janet Yellen the previous day. Yellen essentially bolstered bets for another stimulus package under President Joe Biden that could pressure the U.S. Dollar, while driving up foreign demand for the dollar-denominated asset.

At 18:35 GMT, April Comex gold is trading $1872.30, up $28.30 or +1.53%.

Focus Shifts Toward Biden Administration

Gold traders started to form a support base last week with the release of President Joe Biden’s stimulus package proposal. Biden outlined a $1.9 trillion coronavirus relief package, saying bold investment was needed to jump-start the economy and accelerate the distribution of vaccines to bring the coronavirus under control.

Biden campaigned last year on a promise to take the pandemic more seriously than President Donald Trump, and the package aims to put that pledge into action with an influx of resources for the COVID-19 response and economic recovery.

The aid package includes $415 billion to bolster the response to the virus and the rollout of COVID-19 vaccines, some $1 trillion in direct relief to households, and roughly $440 billion for small businesses and communities particularly hard hit by the pandemic.

Biden’s plan is meant to kick off his time in office with a large bill that sets his short-term agenda into motion quickly.

Transition officials said Biden’s plan will be a rescue package that will be followed up with another recovery package in the coming weeks.

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, sparked an even bigger response from the market than Biden when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Short-Term Outlook

The huge rally on Wednesday is impressive, but it may be just a reaction to the inauguration of President Biden.

Biden’s relief package looks bullish on paper, but it still has to be paid for and that could mean higher Treasury yields, which ultimately dictate the direction of gold prices.

The gold rally could be short-lived if Treasury yields continue rise.

For a look at all of today’s economic events, check out our economic calendar.

Oil Price Fundamental Daily Forecast – Steady to Higher Ahead of API Report

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher at the mid-session on Wednesday, underpinned by expectations that the new U.S. administration will deliver massive stimulus spending that would lift demand, as well as by OPEC output curbs, additional voluntary production cuts by Saudi Arabia in February and forecasts calling for a drop in U.S. crude inventories in this week’s government report.

At 16:07 GMT, March WTI crude oil is trading $53.46, up $0.48 or +0.91% and March Brent crude oil is at $56.37, up $0.47 or +0.84%.

Yellen Sets the Bullish Tone

Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, set a bullish tone for crude oil traders when she urged lawmakers on Tuesday to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency. This is important because crude oil is a dollar-denominated commodity. So when the dollar weakens, crude oil becomes cheaper to foreign buyers.

Yellen also made comments that suggest demand for gasoline could face some headwinds during the Biden administration. Yellen called climate change an “existential threat” to the U.S. economy and said she would appoint a senior official at Treasury to oversee the issue and assess systemic risks it poses to the financial system.

She added investment in clean technologies and electric vehicles was needed to cut carbon emissions, keep the U.S. economy competitive and provide good jobs for American workers.

American Petroleum Institute Weekly Inventories Report

At 21:30 GMT, the API will release its weekly inventories report. It is expected to show crude stocks fell by 300,000 barrels in the week to January 15.

Short-Term Outlook

Sentiment is being supported by Yellen’s declaration for the government to “act big” on stimulus. Traders believe a surge in debt-funded spending would be a positive for the global economy, demand for crude oil and commodity prices in general. Meanwhile, it would put pressure on the U.S. Dollar that would boost foreign demand for dollar-based crude oil.

For a look at all of today’s economic events, check out our economic calendar.

NZD/USD Forex Technical Analysis – Strengthens Over .7160, Weakens Under .7122

The New Zealand Dollar edged higher on Wednesday as the prospects of aggressive fiscal stimulus in the United States bolstered the global outlook, while economic data out of Australia remained mostly positive, helping to underpin the Kiwi.

At 09:53 GMT, the NZD/USD is trading .7160, up 0.0043 or +0.60%.

Sentiment was supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on stimulus.

According to Reuters, a surge in debt-funded spending would be positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.

Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.

Daily NZD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through .7096 will signal a resumption of the downtrend. The main trend will change to up on a move through .7240.

The short-term range is .7003 to .7316. The NZD/USD is currently straddling its retracement zone at .7122 to .7160.

The minor range is .7316 to .7096. Its retracement zone at .7206 to .7232 is a potential upside target and resistance zone.

The main range is .6589 to .7316. If the downtrend resumes then its retracement zone at .6952 to .6867 will become the primary downside target area.

Daily Swing Chart Technical Forecast

The early price action suggests the Fibonacci level at .7122 is controlling the direction of the NZD/USD.

Bullish Scenario

A sustained move over .7123 will indicate the presence of buyers. This could trigger a quick move into .7160. Taking out this level could trigger an acceleration to the upside with the next target clustered at .7206, .7232 and .7240.

Bearish Scenario

A sustained move under .7122 will signal the presence of sellers. This could trigger a break into .7096.

Taking out .7096 will reaffirm the downtrend. If this move generates enough downside momentum then look for a possible acceleration into the next main bottom at .7003.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD and NZD/USD Fundamental Daily Forecast – ‘Risk On’ Sentiment Chasing Out Weak Short-Sellers

The Australian and New Zealand Dollars are trading higher on Wednesday helped by a weaker U.S. Dollar and the hope of huge fiscal stimulus from the Biden administration to combat the effects of coronavirus on the economy. Meanwhile, the economic news in Australia remained mostly positive.

At 10:53 GMT, the AUD/USD is trading .7733, up 0.0035 or +0.45% and the NZD/USD is at .7137, up 0.0020 or +0.28%.

Traders are now looking forward to the inauguration of President Joe Biden at 17:01 GMT and a speech that follows. Early Thursday, Australia will release its latest data on Employment Change and the Unemployment Rate. Early Friday, New Zealand will release its latest report on consumer inflation.

More US Fiscal Stimulus to Come

Demand for riskier currencies is being supported by a declaration from Janet Yellen, U.S. President-elect Joe Biden’s nominee for Treasury Secretary, that the government had to “act big” on coronavirus relief spending, arguing that the economic benefits far outweigh the risks of a higher debt burden.

Yellen also said that the value of the dollar should be determined by markets, a break from departing President Donald Trump’s desire for a weaker U.S. currency.

“The United States does not seek a weaker currency to gain competitive advantage and we should oppose attempts by other countries to do so,” she said.

Australian Consumer Confidence Clouded by COVID-19 in January Survey

A measure of Australian consumer sentiment slipped from a decade high in January as new outbreaks of COVID-19 in Sydney and Brisbane spooked people, though the spread has now been contained with relatively few cases and no deaths, Reuters Reported.

The Westpac-Melbourne Institute Index of Consumer Sentiment released on Wednesday fell 4.5% in January, from December, when it rose 4.1%.

The index is still 41% above a nadir hit back in April when COVID-19 lockdowns were at their height, and 14.6% up on January last year. At 107.0, the index implies optimists clearly outnumber pessimists.

“A pullback in the index was to be expected,” said Westpac’s chief economist, Bill Evans. “Since the last survey we have seen domestic border closures; the emergence of COVID clusters in some states; and the sharp upswing in COVID cases overseas, notably the U.S. and the U.K.”

Daily Forecast

A surge in debt-funded spending would be a positive for the global economy and commodity prices, while more money-printing could put pressure on the U.S. Dollar.

Commodities saw the benefit with oil prices climbing anew, while an auction of dairy, New Zealand’s biggest export earner, produced a sharp 4.8% rise in prices.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Bulls May Be Close to Throwing in the Towel on Winter Cold

Natural gas futures are trading lower at the midsession on Wednesday as hopes for an extreme cold snap fade with every new weather forecast calling for milder trends over the near-term.

The early pressure was fueled by the European model, which trended milder, putting it about 10-12 heating degree days warmer compared to previous runs over the past 24 hours, NatGasWeather said on Wednesday.

At 14:54 GMT, March natural gas futures are trading $2.477, down $0.052 or -2.06%.

NatGasWeather also said the American model added demand overnight, “but the European had been colder, and the natural gas markets were likely hoping the frostier scenario would come through,” the firm said. “Not to be the case, as the weather data disappoints yet again, as it’s done in almost all instances the past two winters.”

There’s still a “decent” amount of national demand expected starting this weekend through January 29, NatGasWeather said.

“However, the natural gas markets were clearly hoping for frigid air over Western Canada to push more aggressively across the Midwest and Northeast instead of only modest cold shots arriving,” according to the firm. “Also at issue, the pattern is now quite bearish for February 1-3 as warm upper high pressure builds over most of the U.S. besides the West Coast and far East for light national demand.”

Short-Term Weather Outlook

According to NatGasWeather for January 20 to January 26, “A cold shot will track across the Great Lakes and interior Northeast today with chilly highs of 20s & 30s. Most of the rest of the U.S. will be mild with highs of 40s to 60s for light national demand. Colder weather systems will push into the West and Northern Plains with rain and snow late this week with lows of -10s to 30s, then spreading across the rest of the northern U.S. this weekend for a swing to strong national demand.”

Daily March Natural Gas

Short-Term Outlook

Thursday’s U.S. Energy Information Administration (EIA) Weekly Storage report is likely to be a non-event because the data represents conditions for the week-ending January 15 and traders are focusing on next week’s heating demand and the possibility of bearish weather for February 1 – 3.

There’s still a shot at some decent demand next week, but it’s only supposed to be a spike lower in temperatures rather than a lingering cold spell. That’s not enough to wake up the bull.

The daily chart pattern suggests the bearish tone is likely to continue on a sustained move under $2.485, but we could see a short-covering surge if buyers can recover $2.552 with conviction.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Stocks Finish Mostly Higher as Alibaba Shares Soar in Hong Kong

Most of the focus was on Hong Kong where listed shares of Chinese tech juggernaut Alibaba surged following the reappearance of founder Jack Ma.

Asian shares were supported early as U.S. Treasury Secretary nominee Janet Yellen advocated for a hefty fiscal relief package to help the world’s largest economy ride out a pandemic-driven slump. At her confirmation hearing on Tuesday, she said the benefits of a big stimulus package to help the world’s largest economy ride out a pandemic-driven slump.

Cash Market Performance

In the cash market on Wednesday, Japan’s Nikkei 225 Index settled at 28523.26, down 110.20 or -0.38%. Hong Kong’s Hang Seng Index finished at 29962.47, up 320.19 or +1.08% and South Korea’s KOSPI Index closed at 3114.55, up 21.89 or +0.71%.

China’s Shanghai Index settled at 3583.09, up 16.71 or +0.47% and Australia’s S&P/ASX 200 Index finished at 6770.40, up 27.80 or +0.41%.

Hong Kong Shares End at Over 20-Month High on Tech Boost

Hong Kong shares ended at their highest level in more than 20 months on Wednesday, extending gains for the fifth straight session boosted by gains in tech stocks. The IT sector sub-index led the gains by rising 5.47%, with the heavyweight Alibaba Group recorded the best intraday gain in more than six months.

Alibaba’s founder Jack Ma made his first public appearance since October, as he spoke to a group of teachers by video, easing concerns about his unusual absence from public life and boosting shares in the e-commerce giant.

South Korea’s Kia Says Looking at Electric Car Projects with Multiple Firms after Apple Report

In corporate developments, shares of South Korean automaker Kia Motors surged 5.04% after the firm said it is looking at electric car projects with multiple firms, Reuters reported citing a regulatory filing.

That development came after a local online publication reported that Kia’s parent Hyundai Motor Group had decided Kia would be in charge of the proposed cooperation with Cupertino-based tech giant Apple on electric cars, according to Reuters.

Australian Shares at Near 11-Month High as Yellen Backs More US Stimulus

Australian shares ended firmer on Wednesday, taking cues from overnight gains in Wall Street, on expectations that a $1.9 trillion U.S. stimulus package would come through, while optimism over domestic corporate earnings also lent support.

Auto parts seller RPM Automotive Group, not an index constituent, advanced as much as 35.9% after raising its 2021 revenue forecast by 44%, while Ansell also rose after the glove maker forecast exceeding its earlier sales outlook.

Morgan Stanley recently said the upgrade cycle for ASX200 stocks in calendar year 2021 was underway and saw some signs of an earnings revival to come through in the upcoming February earnings season, estimating high-single-digit earnings growth in fiscal 2021.

USD/JPY Technical Analysis – Rangebound as US Treasury Yields Flatten After Recent Volatility

The Dollar/Yen is trading lower on Wednesday, reversing yesterday’s rally as the choppy trade continues for a fifth straight session. The price action suggests traders are trying to decide if the risk is on or risk is off.

The five-day counter-trend rally in March 10-year U.S. Treasury notes could also be confusing traders after the recent steep rise in interest rates. Traders seem to wait for yields to make their next move before committing to a direction in the Dollar/Yen. Higher yields will widen the spread between U.S. Treasuries and Japanese Government bonds, making the U.S. Dollar a more attractive investment.

At 07:32 GMT, the USD/JPY is trading 103.745, down 0.160 or -0.15%.

In other news, on Tuesday, U.S. Treasury Secretary nominee Janet Yellen, appearing before the Senate Finance Committee, urged lawmakers to “act big” on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden. This news gave risk appetite better support, helping to boost the U.S. Dollar.

Daily Swing Chart Technical Analysis

Daily USDJPY

The main trend is up according to the daily swing chart. A trade through 104.398 will signal a resumption of the uptrend. The main trend changes to down on a trade through 102.593.

The minor trend is also up. A trade through 104.198 will indicate the buying is getting stronger. The minor trend will change to down on a move through 103.524.

On the upside, resistance is a series of retracement levels at 104.135, 104.499 and 104.821.

The minor range is 102.593 to 104.398. Its 50% level at 103.496 is potential support and a trigger point for an acceleration to the downside.

Daily Swing Chart Technical Forecast

The price action the last seven sessions suggests the direction of the USD/JPY will be determined by trader reaction to a pair of 50% levels at 103.496 and 104.135.

Bearish Scenario

A sustained move under 103.496 will indicate the presence of sellers. If this move generates enough downside momentum then look for a potential acceleration with 102.593 the next major downside target.

Bullish Scenario

A sustained move over 104.135 will signal the presence of buyers. This could lead to a labored rally with initial targets coming in at 104.198, 104.398 and 104.499.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Dollar Index (DX) Futures Technical Analysis – Bulls Still Respecting Uptrend, 90.340 Pivot

The greenback has been helped since the start of the new year by rising U.S. Treasury yields and some investor caution about the strength of the global economic recovery from the coronavirus pandemic. However, the short-term move hasn’t been strong enough to sway longer-term traders from changing their bearish outlook.

At 07:00 GMT, March U.S. Dollar Index futures are trading 90.335, down 0.141 or -0.16%.

In other news, Yellen, appearing before the Senate Finance Committee on Tuesday, urged lawmakers to “act big” on the next coronavirus relief package, adding that the benefits outweigh the costs of a higher debt burden.

Yellen also said the dollar’s value should be determined by market forces, adding that the United States should oppose attempts by other countries to artificially manipulate currency values to gain trade advantage.

Daily Swing Chart Technical Analysis

The main trend ticked higher on the daily chart last Friday when buyers took out 90.720. However, the lack of follow-through to the upside following the surge to 90.790 suggests the move may have been fueled by short-covering and buy stops rather than new buyers. A trade through 89.890 will change the main trend to down.

The main range is 92.730 to 89.165. Its retracement zone at 90.950 to 91.370 is new resistance.

The minor range is 89.890 to 90.790. The index is currently straddling its 50% level at 90.340.

The short-term range is 89.165 to 90.790. Its 50% level at 89.980 is the last potential support before the 89.890 main bottom.

Daily Swing Chart Technical Forecast

The early price action suggests the direction of the March U.S. Dollar Index on Wednesday will be determined by trader reaction to the pivot at 90.340.

Bearish Scenario

A sustained move under 90.340 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into 89.980 and 89.890. The latter is a potential trigger point for an acceleration to the downside.

Bullish Scenario

A sustained move over 90.340 will signal the presence of buyers. If this move can attract enough buyers then look for the rally to possibly extend into 90.790, followed by a resistance cluster at 90.950.

For a look at all of today’s economic events, check out our economic calendar.

AUD/USD Forex Technical Analysis – Sellers Could Try to Form Secondary Lower Top at .7740

The Australian Dollar is edging higher on Wednesday despite weaker than expected consumer confidence in January. A measure of Australian consumer sentiment slipped from a decade high in January as new as new outbreaks of COVID-19 in Sydney and Brisbane spooked people, though the spread has now been contained with relatively few cases and no deaths, according to Reuters.

At 06:39 GMT, the AUD/USD is trading .7736, up 0.0038 or +0.49%.

The Westpac-Melbourne Institute Index of Consumer Sentiment released on Wednesday fell 4.5% in January, from December, when it rose 4.1%.

Daily AUD/USD

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend changed to down when sellers took out .7666 on Monday. A trade through .7805 will change the main trend to up.

The minor range is .7820 to .7659. Its 50% level at .7740 is a potential upside target. Since the main trend is down, sellers could come in on a test of this level.

The short-term range is .7339 to .7820. If the selling pressure continues then look for the move to possibly extend into its 50% level at .7579.

The major retracement zone support comes in at .7405 to .7308.

Daily Swing Chart Technical Forecast

The direction of the AUD/USD into the close on Wednesday will be determined by trader reaction to .7740. Sellers are going to try to form a secondary lower top following a test of this level.

Bearish Scenario

A sustained move under .7740 will indicate the presence of sellers. If this move creates enough downside momentum then look for a breakdown under .7659 and a possible test of the main bottom at .7643. Taking out this level will reaffirm the downtrend.

Bullish Scenario

A sustained move over .7740 will signal the presence of buyers. If this move generates enough upside momentum then look for the rally to possibly extend into .7805. Taking out this main top will change the main trend to up with .7820 the next upside target.

For a look at all of today’s economic events, check out our economic calendar.

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Needs Follow-Through Rally to Confirm Uptrend

March E-mini NASDAQ-100 Index futures closed higher on Tuesday as U.S. Treasury Secretary Janet Yellen advocated for a hefty fiscal relief package before lawmakers to help the world’s largest economy ride out a pandemic-driven slump.

On Tuesday, March E-mini NASDAQ-100 Index futures settled at 12985.50, up 183.25 or +1.41%.

In other news, Netflix shares rose more than 11% following the closing bell on Tuesday after the streaming television provider reported paid subscriber additions for the fourth quarter topped Wall Street expectations.

Daily March E-mini NASDAQ-100 Index

 

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The trend turned back up when buyers took out the previous main top at 13028.75 late in the session. The new main bottom is 12727.00. A trade through this level will change the trend to down.

The minor range is 12491.25 to 13125.00. Its 50% level at 12808.00 is new support.

The short-term range is 12217.00 to 13125.00. Its 50% level at 12671.00 is additional support.

The main range is 10936.25 to 13125.00. Its retracement zone at 12030.50 to 11772.25 is the major support area controlling the near-term direction of the index.

Short-Term Outlook

With two changes in trend in as many sessions, conditions are very choppy, but this is the daily chart, so you have to expect two sided price action before the next major move. Professionals have to shake the trees a little to rattle the weaker traders.

Now that the trend has turned back up, the follow-through move becomes the key as to whether the change in trend was fueled by buy stops or aggressive new buyers.

The longer the index spends under the record high at 13125.00 set on January 8, the more the chart pattern will look distributive, which tends to indicate lower prices are coming.

The real key to the next move is whether the next catalyst encourages investors to chase the market higher and buy strength, or pushes them to look for value at much lower levels. It comes down to determining how much bang for the buck can they get buying a new contract higher versus buying a near-term correction into support.

For a look at all of today’s economic events, check out our economic calendar.

E-mini Dow Jones Industrial Average (YM) Futures Technical Analysis – Trade Through 31116 Changes Trend to Up

March E-mini Dow Jones Industrial Average futures finished higher on Tuesday. The blue chip average was supported by a surge in shares of component Goldman Sachs Group, which rose 2.5% as its fourth-quarter profit more than doubled, dwarfing estimates after another blowout performance at its trading and underwriting business.

On Tuesday,  March E-mini Dow Jones Industrial Average futures settled at 30828, up 108 or +0.35%.

Goldman Sachs on Tuesday beat analysts’ expectations for fourth-quarter profit and revenue on strong performance from the firm’s equities traders and investment bankers. The bank posted earnings of $12.08 a share, crushing the $7.47 estimate of analysts surveyed by Refinitiv. Revenue of $11.74 billion exceeded expectations by about $1.75 billion.

Daily March E-mini Dow Jones Industrial Average

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 31116 will change the main trend to up. A move through 30506 will signal a resumption of the downtrend.

The minor range is 31148 to 30506. The market is currently straddling its 50% level at 30827.

The second minor range is 29760 to 31148. Its 50% level at 30454 is potential support.

The short-term range is 29318 to 31148. Its 50% level is another potential support level.

Daily Swing Chart Technical Forecast

Tuesday’s price action suggests the direction of the March E-mini Dow Jones Industrial Average futures contract over the short-run will be determined by trader reaction to 30827.

Bullish Scenario

A sustained move over 30827 will indicate the presence of buyers. If this generates enough upside momentum then look for a test of 31116. Taking out this level will change the main trend to up. This could trigger an extension of the rally into the next main top at 31148.

Bearish Scenario

A sustained move under 30827 will signal the presence of sellers. This could lead to a retest of Friday’s minor bottom at 30506, followed by 30454. If this fails then look for an extension of the selling into 30233. This level is a potential trigger point for an acceleration to the downside.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Futures (GC) Technical Analysis – Reversal Bottom Could Trigger Start of Counter-Trend Rally

Gold futures are trading higher late Tuesday as the U.S. Dollar remained under pressure, with prospects for more stimulus buoying bullion’s appeal as an inflation hedge.

Comments from Janet Yellen, U.S. President Joe Biden’s nominee for Treasury Secretary, kept the gold market well supported throughout the session. Yellen told Senate lawmakers at her confirmation hearing on Tuesday that the value of the U.S. Dollar should be determined by markets.

Yellen also reaffirmed her commitment to relief measures and underlined the depth of the economic crisis.

At 20:11 GMT, February Comex gold is trading $1838.70, up $8.80 or +0.48%.

In other news, the U.S. Dollar slipped against a basket of currencies from a four-week high hit in the last session, making dollar-denominated gold cheaper for foreign investors.

Daily February Comex Gold

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, but momentum may be getting ready to shift to the upside with the formation of a closing price reversal bottom on Tuesday.

A trade through $1962.50 will change the main trend to up. This is highly unlikely, but a change in the minor trend is possible. A move through $1800.80 will signal a resumption of the downtrend.

The minor trend is down. A trade through $1864.00 will change the minor trend to up. This will also shift momentum to the upside.

The main support is a long-term retracement zone at $1780.50 to $1705.20. This area stopped the selling on November 30 at $1767.20.

The short-term range is $1767.20 to $1962.50. Its 50% level at $1864.90 is the first upside target.

The minor range is $1962.50 to $1800.80. Its 50% level at $1881.70 is another potential upside target. Since the main trend is down, sellers could come in on a test of this level.

Short-Term Outlook

The direction of the February Comex gold market into the close is likely to be determined by trader reaction to Friday’s close at $1829.90.

Bullish Scenario

A sustained move over $1829.90 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into a resistance cluster at $1864.00 to $1864.90, followed by $1881.70.

Look for sellers on the first test of $1881.70, but be prepared for an acceleration to the upside if this level is taken out with conviction.

Bearish Scenario

A sustained move under $1829.90 will signal the presence of sellers. This could trigger a break into the intraday low at $1800.80, followed by the major 50% level at $1780.50.

Side Notes

A close over $1829.90 will form a potentially bullish closing price reversal bottom. If confirmed, this could trigger the start of a 2 to 3 day counter-trend rally.

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Update – Short-Term Strength Over $52.88, Weakens Under $51.81 with $50.63 Next Target

U.S. West Texas Intermediate crude oil futures are edging higher on Tuesday shortly after the regular session opening as a weaker U.S. Dollar drove up demand for the dollar-denominated asset. The market was also boosted by optimism that government stimulus will eventually lift global economic growth and oil demand, somewhat offsetting concerns that renewed COVID-19 pandemic lockdowns would weaken fuel consumption.

At 15:34 GMT, March WTI crude oil futures are trading $52.96, up $0.54 or +1.03%.

In other news, the International Energy Agency (IEA) cut its outlook for oil demand in 2021, but pointed to a recovery in demand in the second half of the year to an annual average of 96.6 million barrels per day.

Daily March WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on January 13.

A trade through $53.94 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a move through $47.31.

The minor trend is down. This confirmed the shift in momentum. A trade through $53.86 will change the minor trend to up.

The minor range is $53.94 to $51.81. Its 50% level at $52.88 is currently being tested.

The short-term range is $47.31 to $53.94. Its 50% level at $50.63 is the next downside target.

Daily Swing Chart Technical Forecast

The early price action indicates the direction of the market into the close will be determined by trader reaction to $52.88.

Bullish Scenario

A sustained move over $52.88 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of $53.94. Taking out this level will put the market back on track for an eventual test of the January 8, 2020 main top at $57.41.

Bearish Scenario

A sustained move under $52.88 will signal the presence of sellers. This could trigger a break into the intraday low at $51.81. Taking out this level will signal a resumption of the downtrend with $50.63 the next likely downside target.

For a look at all of today’s economic events, check out our economic calendar.

E-mini S&P 500 Index (ES) Futures Technical Analysis – Sustained Move Over 3782.50 Signals Strong Buying

March E-mini S&P 500 Index futures are trading higher on Tuesday after upbeat earnings from big U.S. banks and Halliburton, while investors awaited a speech from U.S. Treasury Secretary nominee Janet Yellen that is expected to advocate hefty fiscal spending.

Bank of America topped fourth-quarter profit estimates and joined JPMorgan, Citigroup Inc and Wells Fargo & Co in releasing some cash reserves to cover for coronavirus-driven loan losses, underscoring its confidence in the economy.

At 14:30 GMT, March E-mini S&P 500 Index futures are trading 3792.25, up 23.75 or +0.69%.

Daily March E-mini S&P 500 Index

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, but momentum is trending lower. A trade through 3824.50 will signal a resumption of the uptrend. A move through 3596.00 will change the main trend to down.

The minor trend is down. This is controlling the momentum. A trade through 3740.50 will indicate the selling is getting stronger. Taking out 3817.75 will change the minor trend to up and shift momentum to the upside.

The minor range is 3824.50 to 3740.50. Its 50% level at 3782.50 is currently being tested.

The second minor range is 3652.50 to 3824.50. Its 50% level at 3738.50 provided support earlier in the session.

The short-term range is 3596.00 to 3824.50. Its 50% level at 3710.25 is another potential support level.

Daily Swing Chart Technical Forecast

The direction of the March E-mini S&P 500 Index into the close is likely to be determined by trader reaction to 3782.50.

Bullish Scenario

A sustained move over 3782.50 will indicate the presence of buyers. If this creates enough upside momentum then look for the rally to possibly extend into the minor top at 3817.75, followed by the main top at 3824.50.

Bearish Scenario

A sustained move under 3782.50 will signal the presence of sellers. This could lead to a retest of the intraday low at 3740.50, followed by the 50% level at 3738.50. If this level fails then look for the selling to possibly extend into 3710.25. This is a potential trigger point for an acceleration into another 50% level at 3660.75.

For a look at all of today’s economic events, check out our economic calendar.

Asia-Pacific Shares Finish Mostly Higher Amid More Than 2.6% Gains in Hong Kong, South Korea

The major Asia-Pacific stock indexes were mixed but mostly higher on Tuesday, led by more than two-percent gains in Hong Kong and South Korea. China struggled, however, as a rise in coronavirus cases offset the bullish gross domestic product data released on Monday. Analysts said the markets may have been underpinned by optimism ahead of remarks from U.S. President-elect Joe Biden’s nominee for Treasury secretary, Janet Yellen, later today.

In the cash market on Tuesday, Japan’s Nikkei 225 Index settled at 28633.46, up 391.25 or +1.39%. Hong Kong’s Hang Seng Index finished at 29642.28, up 779.51 or +2.70% and South Korea’s KOSPI Index closed at 3092.66, up 78.73 or +2.61%.

In China, the benchmark Shanghai Index settled at 3566.38, down 29.84 or -0.83% and Australia’s S&P/ASX 200 Index finished at 6742.60, up 79.60 or +1.19%.

Yellen Says US Must ‘Act Big’ on Next Coronavirus Relief Package

Janet Yellen, U.S. President-elect Joe Biden’s nominee to run the Treasury Department, will tell the Senate Finance Committee on Tuesday that the government must “act big” with its next coronavirus relief package.

“Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen, a former Federal Reserve chair, said in a prepared opening statement for her hearing before the committee.

“I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time,” she said in the statement, which was obtained by Reuters.

Hong Kong Stocks End at 20-Month High on Mainland China Demand

Hong Kong stocks closed at a 20-month high on Tuesday, helped by steady and robust demand from investors in mainland China for shares in the Asian financial hub. Leading the gains, the Hang Seng Tech Index and the Hang Seng Financials Index both closed 2.8% higher.

Mainland China investors purchased 26.1 billion Yuan ($4.02 billion) worth of Hong Kong stocks on Tuesday via the Stock Connect linking mainland and Hong Kong, after spending a record HK$23 billion on Monday, according to HKEX and Refinitiv data.

China Stocks Retreat on Coronavirus Worries

China shares fell on Tuesday as a resurgence of COVID-19 cases hit market sentiment, with consumer discretionary and materials stocks leading the retreat.

Leading the decline, the CSI300 Consumer Discretionary Index dropped 2.9%, while the CSI300 materials Index slid 2.7%.

China is battling the worst outbreak of COVID-19 since March 2020, with one province posting a record daily rise in cases, as an independent panel reviewing the global pandemic said China could have acted more forcefully to curb the initial outbreak.

China will provide necessary policy support for the economic recovery this year, to avoid a “policy cliff”, as small firms remain hard-pressed amid the pandemic, a senior official at the state planner said.

South Korean Stocks See Best Day in Over a Week on Samsung Electric, Hyundai Motor Boost

South Korean shares rebounded to end higher on Tuesday, marking its sharpest gain since January 8, boosted by shares of Samsung Electronics and Hyundai Motor, and upbeat Chinese data from Monday.

An 11.2% gain in auto stocks was the biggest boost, with the country’s largest carmaker Hyundai Motor surging as much as 8.5%. Chip giant Samsung Electronics also jumped as much as 3.5%, recovering from its sharpest decline in five months on Monday after its group leader was sentenced to a 30-month jail term.

For a look at all of today’s economic events, check out our economic calendar.