Crude Oil Price Forecast – Crude Oil Markets Quiet

WTI Crude Oil

The West Texas Intermediate Crude Oil market continues to be relatively noisy as we are hanging around the middle of the overall consolidation area between the $55 level on the top, with the $50 level on the bottom. This is a market that I think will continue to see a lot of noise overall, due to the fact that there are a lot of questions when it comes to overall demand. I do not see how demand picks up significantly, despite the fact that they are calling for stimulus to drive prices higher. If crude oil rallies, it is going to be due to the US dollar falling more than anything else as we had already seen a lack of demand before the pandemic hit.

Crude Oil Video 21.01.21

Brent

Brent markets were slightly positive during the trading session on Wednesday initially but gave back the gains as we are getting a bit exhausted. I think at this point we are starting to ask the question as to whether or not we can continue to go to the upside, and quite frankly I think at this point we are getting stretched. I do expect to see a bit of a pullback in the short term, perhaps back down towards the $50 level area. The Brent market will suffer at the lack of demand going forward, and therefore I believe that eventually we have to come to grips with the idea that simple stimulus will not be enough to send oil markets screaming to the upside any further. At this point in time, I think that short-term selling might be possible, but you need to be very cautious about overexposing yourself.

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

Natural Gas Price Forecast – Natural Gas Continues to Get Pummeled

Natural gas markets sold off significantly during the trading session on Wednesday to break down below the 200 day EMA. That being said though, I think that it is only a matter of time before we bounced a little bit in order to sell off yet again. Given enough time, I think that the market will probably go looking towards the $2.40 level, possibly even lower than that. After all, as the temperatures warm up in the United States, that will drive down the price of natural gas as the demand also drops.

NATGAS Video 21.01.21

To the upside, the $2.80 level offers a significant amount of resistance and I think now offers the “ceiling in the market” that we are waiting to see. Ultimately, I think that this is a market that cannot be bought under pretty much any circumstance, due to the fact that the demand of the United States will continue to drop, not only due to warmer temperatures but the fact that the economy is going to be slowing down. Stimulus does not matter, because quite frankly it did not matter before the pandemic.

Yes, there may be a sudden surge economically, but the fact that natural gas is typically used as a heating commodity does not bode well for the upcoming several months. As long as that is the case, I think that you continue to short signs of exhaustion after small bounces. All things being equal, this is a market that I have no interest in buying, at least not until we start talking about trading winter contracts again.

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

Gold Price Forecast – Gold Markets Rally Significantly

Gold markets have rallied significantly during the trading session on Wednesday to break above the recent resistance area and go looking towards the 50 day EMA. By doing so, the market is likely to continue to go higher over the longer term, perhaps reaching towards the $1900 level. I think that short-term pullbacks will continue to offer buying opportunities and therefore I think that this is a “buy on the dips” market going forward. This makes quite a bit of sense, because quite frankly there is a ton of stimulus coming, and of course there is a whole litany of potential problems out there that could have people running towards safety.

Gold Price Predictions Video 21.01.21

The 200 day EMA underneath should offer plenty of support, near the $1820 level. At this point, the $1800 level underneath is a large, round, psychologically significant figure, and the fact that we ended up forming a bit of a hammer suggests that we are probably going to continue to find plenty of support underneath, based upon not only the fundamental situation, but the structural and technical support level. I have no interest in shorting gold, I think that it is trying to form a longer-term basing pattern, as we will certainly see currency destruction be a theme of 2021 going forward, not just in the US dollar, but multiple other currencies around the world.

Gold serves far too many different reasons right now to think that you should be a seller. Ultimately, I believe that the market will eventually break out to fresh highs later this year so therefore I look for opportunities to pick up gold “on the cheap.”

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

Oil Gains Ground On Stimulus Optimism

Oil Video 20.01.21.

Oil Tries To Settle Above Multi-Month Highs

WTI oil made an attempt to settle above multi-month highs at $53.90 as traders focused on Joe Biden’s stimulus plans.

The market believes that Joe Biden will not face significant resistance against the $1.9 trillion stimulus package, and that the direct support to consumers will boost oil demand in the near term.

Judging by the recent coronavirus data from the U.S., traders should not expect strong virus containment measures which may deliver another blow to the domestic oil demand.

While Joe Biden has many times stated that he planned to boost coronavirus response, his measures will likely be focused on increased healthcare funding rather than restrictions on mobility which is good for the oil market.

Oil traders have successfully ignored the constant flow of bad news from Europe which struggles to contain the second wave of the virus, and it looks like only a true catastrophe may attract their attention. The market remains in a bullish mood, and expectations of another round of stimulus may serve as the catalyst that will push WTI oil towards the $55 level.

Analysts Expect That Crude Inventories Will Continue To Decline

The market’s optimism will soon get tested by crude inventory reports from API and EIA which will indicate whether the current oil demand is strong enough to push inventories to lower levels.

Currently, analysts expect that crude inventories will decrease by about 0.3 million barrels. The previous EIA Weekly Petroleum Status Report showed that crude inventories decreased by 3.2 million barrels and were about 8% above the five-year average for that time of the year.

Thus, the pace of crude inventory draw is expected to decrease. Inventories have been declining since early December so the continuation of this trend may provide psychological support to the market. At the same time, a sudden increase in crude inventories may hurt the market’s mood as oil remains near multi-month highs which increases its sensitivity to such news.

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.

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.

EUR/USD Daily Forecast – Euro Continues To Rebound

EUR/USD Video 20.01.21.

U.S. Dollar Is Under Pressure Against Euro

EUR/USD is trying to settle back above the resistance at 1.2155 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index declined below the support level at 90.50 and is currently testing the next support level at the 20 EMA at 90.35. In case the U.S. Dollar Index settles below this level, it will gain additional downside momentum which will be bullish for EUR/USD.

Yesterday, EU reported that Euro Area ZEW Economic Sentiment Index increased from 54.4 in December to 58.3 in January despite the negative impact of the second wave of the virus.

Today, foreign exchange market traders will have a chance to take a look at Euro Area inflation data for December. Inflation Rate is projected to decline by 0.3% year-over-year while Core Inflation Rate is expected to grow by 0.2%. Most likely, prices will remain weak in the EU in the upcoming months due to the negative impact of lockdowns in the first quarter of this year.

Technical Analysis

eur usd january 20 2021

EUR/USD managed to get above the resistance at 1.2130 and is trying to settle above the next resistance level at 1.2155. If this attempt is successful, EUR/USD will get to the test of the resistance at the 20 EMA at 1.2165. The next resistance level is located at 1.2175, so EUR/USD will likely face strong resistance in the 1.2155 – 1.2175 area.

In case EUR/USD manages to settle above this resistance area, it will gain additional upside momentum and head towards the resistance at 1.2220. A successful test of this level will push EUR/USD towards the resistance at 1.2250.

On the support side, the previous resistance level at 1.2130 will likely serve as the first support level for EUR/USD. In case EUR/USD declines below this level, it will get to the test of the next support at the 50 EMA at 1.2115. A move below the 50 EMA will push EUR/USD towards the next support level which is located at 1.2080.

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

COVID-19 Vaccine Update – Some EU Member States Break Ranks

EU Vaccine News

Following the EMA’s decision to bring forward the review of the AstraZeneca vaccine, EU member states are looking to get ahead in placing orders.

Over the weekend, news hit the wires that the Irish government was in talks to secure delivery of the yet to be authorized vaccine.

Pfizer Inc. supply issues experienced across member states has resulted in bid to secure supply from elsewhere.

Ireland expects to receive more than 3 million doses of the AstraZeneca vaccine. By receiving the vaccine ahead of the EMA recommendation and EU Commission authorization, it would mean that the vaccine could be administered immediately upon authorization.

Last week, the EMA had indicated that upon recommendation, the vaccine would be widely available by mid-February.

Ireland would therefore be around 2-weeks ahead of other EU member states. More importantly, Ireland may also avoid jostling with other EU member states for supply.

Having seen Britain go it alone on the vaccine front and approve the AstraZeneca vaccine late last year, Britain’s vaccination rates are well ahead of any of those seen across the EU.

Vaccinations

According to the Bloomberg Vaccination Tracker, Ireland’s vaccination rate stood at 1.90 doses per 100 people as at 13th January.

While well short of the likes of the Israel, the U.A.E and even the UK and the U.S, its well ahead of many other EU member states.

To put it into perspective, the EU has a vaccination rat of 1.41 doses per 100 people as at 19th January.

Italy and Spain had rates of 2.01 and 2.08 doses per 100 as at 19th January.

By contrast, however, France had a vaccination rate of just 0.90 doses per 100. The numbers from the Netherlands were even more alarming. As at 19th January, the Netherlands had a vaccination rate of just 0.45 doses per 100 people.

With the broad spread of rates, it is not wholly surprising that some EU member states are looking to jump the gun in securing vaccine supply.

Ireland is certainly not amongst the worst affected by the COVID-19 pandemic.

At the time of writing, Ireland had a total of 176,839 total COVID-19 cases and 2,708 related deaths.

While well below the numbers reported from the likes of France, Germany, Italy, and Spain, there is some urgency globally to secure more vaccines.

New strains of the coronavirus have proved significantly more virulent and as a result could have a significant impact on economic conditions.

Germany has already announced an extension to its lockdown. Merkel also talked of a possible need to shut down borders in order to protect the country from new strains.

Without an adequate vaccine supply and vaccination drive, the impact of the new strains could be devastating.

COVID-19 numbers from the UK had certainly sent a warning to neighboring countries over the holidays.

Global Numbers

Leading the charge geographically, by vaccination rate, continues to be Israel.

As at 19th January, Israel had a reported vaccination rate of 29.78 doses per 100, up from 25.91 as at 17th January.

The U.A.E continued to trail Israel in 2nd place, with a rate of 19.21 doses per 100.

Sitting behind Bahrain in 3rd was the UK, with a vaccination rate of 7.07 doses per 100. This was up from 6.45 doses per 100 as at 17th January.

Looking at the numbers, A marked increase in vaccination rates is going to be needed to support a speedier economic recovery.

Further extensions to existing lockdown periods could begin to hit the prospects of a 2nd quarter recovery.

While we see economic divergence globally, stemming from marked differences in vaccination rates, the same is likely within the EU.

For the Eurozone economic outlook, France, Germany, Italy, Spain, and the Netherlands will need to materially ramp up vaccinations.

It will be interesting to see whether the issue is raised during the ECB press conference tomorrow. How does the ECB see growth when considering the divergence in vaccination rates across member states?

For a full breakdown of vaccination rates by country, please visit Bloomberg Vaccination Tracker page here.

The Latest COVID-19 Numbers

At the time of writing, there were a total of 96,625,755 confirmed COVID-19 cases and 2,065,698 related deaths.

By geography, the U.S had reported 24,806,964 cases and 411,486 COVID-19 related deaths.

India reporting 10,596,442 cases, with Brazil reporting 8,575,742 cases.

Sitting behind Russia (3,612,800) remained the UK (3,466,849).

France (2,938,333), Italy (2,400,598), Spain (2,370,742), and Germany (2,071,473) reported a combined 9,781,146 cases.

Looking Ahead

The AstraZeneca vaccine remains the key to bringing the pandemic under control near-term. This is largely due to an expected abundance of supply.

When considering the current vaccination rates, however, there is one other factor to consider.

Pfizer Inc., Moderna Inc., and AstraZeneca’s vaccines are 2-dose vaccines. This means that another round of vaccines is going to be needed for effective protection against the virus.

When considering current vaccination rates, some of the more adversely affected nations may not be anywhere 50% vaccinated before the 2nd quarter.

This is yet another factor for the markets to consider in terms of any economic recovery.

The availability of a single dose vaccine may not be far off, with Johnson & Johnson set to release data imminently. In all reality, however, supply constraints could limit the availability of a single dose vaccine beyond U.S borders.

Johnson & Johnson Numbers

Johnson & Johnson had previously projected to deliver 12 million doses by the end of February and 100 million doses by the end of June.

According to recent reports, however, Johnson & Johnson may a number of months behind.

That suggests that 1 billion doses by the end of 2021 may also be an ambitious target.

Pfizer Inc., Moderna Inc., AstraZeneca, Sputnik V, and China’s two vaccines will be key near-term. Ultimately, however, it will likely be a single dose vaccine that brings an end to the COVID-19 pandemic.

Availability across the globe is going to be needed, however, for the pandemic to truly come to an end.

As we have seen in the early days of the COVID-19 vaccines, richer nations have cornered much of the vaccine supply.

This will also need to change for the number of new cases across the globe to begin falling.

GBP/USD Daily Forecast – Test Of Resistance At 1.3665

GBP/USD Video 20.01.21.

U.S. Dollar Is Losing Ground Against British Pound

GBP/USD is currently trying to settle above the resistance at 1.3665 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index managed to settle below the support at 90.50 and is trying to get below the next support level at the 20 EMA at 90.35. If the U.S. Dollar Index declines below the 20 EMA, it will head towards the 90 level which will be bullish for GBP/USD.

Today, the UK will provide inflation data for December. Analysts expect that Inflation Rate increased by 0.2% month-over-month. On a year-over-year basis, Inflation Rate is projected to grow by 0.5%. Meanwhile, Core Inflation Rate is expected to grow by 1.3%.

In addition to UK inflation data, foreign exchange market traders will focus on the Inauguration Day in the U.S. The U.S. dollar pulled back from recent highs as the support from the recent increase in U.S. Treasury yields was not sufficient enough to push it higher, and traders will keep an eye on any dovish comments from Biden’s economic team.

Technical Analysis

gbp usd january 20 2021

GBP/USD gained upside momentum and is trying to settle above the nearest resistance level at 1.3665. If this attempt is successful, GBP/USD will head towards the next resistance at 1.3710. RSI is in the moderate territory, and there is plenty of room to gain additional momentum in case the right catalysts emerge.

A move above 1.3710 will open the way to the test of the resistance at 1.3755. In case GBP/USD gets above the resistance at 1.3755, it will move towards the resistance at 1.3785.

On the support side, the nearest support for GBP/USD is located at 1.3625. In case GBP/USD declines below this level, it will move towards the next support level which is located at the 20 EMA at 1.3585.

The next support is located at 1.3575, so GBP/USD will likely receive material support in the 1.3575 – 1.3585 area. A move below this support area will push GBP/USD towards the support at 1.3540.

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.

Inauguration Day and the Bank of Canada Put the Greenback and the Loonie in Focus

Earlier in the Day:

It’s was a relatively busy start to the day on the economic calendar this morning. The Aussie Dollar and the PBoC were in action early this morning.

For the Aussie Dollar

The Westpac Consumer Confidence Index fell by 4.5% to 107.0 in January. In December, the Index had stood at 112.0.

According to the January report,

  • Domestic border closures and COVID-19 clusters together with a sharp rise in new COVID-19 cases overseas weighed on sentiment.
  • In spite of the fall, the index is up by 14.6% from a year ago and stood 41.5% higher than the pandemic low last April.

Looking at the key components:

  • Economic conditions next 12-months slid by 8.3%, with family finances vs a year ago falling by 7.0%.
  • In spite of the decline both were up compared with a year ago.
  • Family finances next 12-months saw a more modest 0.3% decline, with economic conditions next 5-years down by 4.5%.
  • Compared with this time last year, economic conditions next 5-years was up by 31.6%, with economic conditions next 12-months up by 21.1%.
  • Time to buy a major household item was down by 2.8%, while up by 4.8% compared with this time last year.
  • Time to buy a dwelling bucked the trend, however, rising by 0.2%. This was supported by sentiment towards house prices.
  • The House Price Expectations Index increased by 1.1%.
  • Sentiment towards unemployment was disappointing, however. The Unemployment Expectations Index was up by 11.9%, while down by 11.2% compared with a year ago.

The Aussie Dollar moved from $0.77100 to $0.77102 upon release of the figures. At the time of writing, the Aussie Dollar was up by 0.21% to $0.7711.

From China

This morning, the PBoC left loan prime rates unchanged in the central bank’s first monetary policy decision of the year.

In line with market expectations, the 1-year LPR remained unchanged at 3.85%, with the 5-year unchanged at 4.65%.

The Aussie Dollar moved from $0.77026 to $0.77072 upon announcement of the decision.

Elsewhere

At the time of writing, the Japanese Yen was up by 0.13% to ¥103.77 against the U.S Dollar, with the Kiwi Dollar up by 0.04% to $0.7125.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. German wholesale inflation figures for December and finalized December inflation figures for the Eurozone are due out later today.

Barring marked revision from prelim Eurozone inflation figures, we don’t expect the stats to have too much influence, however.

Away from the economic calendar, COVID-19 vaccine news along with the latest COVID-19 figures and Italian politics will provide direction.

At the time of writing, the EUR was up by 0.10% to $1.2141.

For the Pound

It’s a relatively busy day ahead on the economic calendar. December inflation and wholesale inflation figures are due out of the UK later today.

A pickup in inflationary pressures should deliver support for the Pound. Wholesale inflationary pressures will also need to see a pickup, however.

While the stats will influence, the market focus will remain on the UK Government’s progress towards ending the COVID-19 pandemic.

At the time of writing, the Pound was up by 0.12% to $1.3647.

Across the Pond

It’s yet another particularly quiet day ahead on the economic calendar. There are no material stats to provide the Greenback and the broader markets with direction.

The lack of stats will leave the Greenback in the hands of chatter from Capitol Hill and COVID-19 news.

It’s Inauguration Day, so expect market focus to be on Capitol Hill. Upon entering the Oval Office, Biden is expected to begin repealing Trump policy.

At the time of writing, the Dollar Spot Index was down by 0.12% to 90.388.

For the Loonie

It’s a busy day on the economic data front. December inflation figures are due out ahead of the Bank of Canada’s first monetary policy decision of the year.

With the markets likely to hold out for the BoC rate statement and press conference, inflation figures will likely have a relatively muted impact on the Loonie.

Rising crude oil prices and optimism towards the economic outlook is likely to leave the BoC in a holding pattern. It remains to be seen, however, whether there’s any hawkish chatter.

At the time of writing, the Loonie was up by 0.11% to C$1.2721 against the U.S Dollar.

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

EOS, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – January 20th, 2021

EOS

EOS fell by 1.02% on Tuesday. Partially reversing a 1.81% gain from Monday, EOS ended the day at $2.7908.

A mixed start to the day saw EOS rise to a mid-morning high $2.9341 before hitting reverse.

EOS broke through the first major resistance level at $2.8917 before sliding to a late morning intraday low $2.6517.

The sell-off saw EOS fall through the first major support level at $2.7095 before striking a late afternoon intraday high $2.9542.

EOS broke back through the first major resistance level before a slide back to sub-$2.80 levels and into the red.

In spite of the 2nd sell-off, EOS steered clear of the first major support level at $2.7095.

At the time of writing, EOS was up by 0.69% to $2.8100. A mixed start to the day saw EOS fall to an early morning low $2.7676 before rising to a high $2.8249.

EOS left the major support and resistance levels untested early on.

EOSUSD 200121 Daily Chart

For the day ahead

EOS would need to avoid a fall back through the $2.7989 pivot level to support a run at the first major resistance level at $2.9461.

Support from the broader market would be needed, however, for EOS to break back through to $2.90 levels.

Barring an extended crypto rally, the first major resistance level and Tuesday’s high $2.9542 would likely cap any upside.

In the event of an extended rally, EOS could test resistance at $3.10 before any pullback. The second major resistance level sits at $3.1014.

Failure to avoid a fall back through the pivot level at $2.7989 would bring the first major support level at $2.6436 into play.

Barring an extended sell-off, however, EOS should steer of sub-$2.60 levels. The second major support level sits at $2.4964.

Looking at the Technical Indicators

First Major Support Level: $2.6436

First Major resistance Level: $2.9461

23.6% FIB Retracement Level: $6.52

38% FIB Retracement Level: $9.68

62% FIB Retracement Level: $14.77

Stellar’s Lumen

Stellar’s Lumen fell by 2.20% on Tuesday. Reversing a 0.53% gain from Monday, Stellar’s Lumen ended the day at $0.2981.

A bullish start to the day saw Stellar’s Lumen rise to a late morning intraday high $0.3198 before hitting reverse.

Stellar’s Lumen broke through the first major resistance level at $0.3115 and the second major resistance level at $0.3180.

Coming up against resistance at $0.32, however, Stellar’s Lumen slid to a late intraday low $0.2936.

Stellar’s Lumen fell through the first major support level at $0.2958 before briefly revisiting $0.3050 levels.

A bearish end to the day, however, saw Stellar’s Lumen fall back to end the day at sub-$0.30 levels.

At the time of writing, Stellar’s Lumen was up by 0.33% to $0.2991. A mixed start to the day saw Stellar’s Lumen fall to an early morning low $0.2950 before striking a high $0.3016.

Stellar’s Lumen left the major support and resistance levels untested early on.

XLMUSD 200121 Daily Chart

For the day ahead

Stellar’s Lumen would need to move through the $0.3038 pivot to bring the first major resistance level at $0.3141 into play.

Support from the broader market would be needed, however, for Stellar’s Lumen to break back through to $0.31 levels.

Barring an extended crypto rally, the first major resistance level and Tuesday’s high $0.3198 would likely cap any upside.

In the event of an extended rally, Stellar’s Lumen could test the second major resistance level at $0.3300.

Failure to move through the $0.3038 pivot would bring the first major support level at $0.2879 and the 38.2% FIB of $0.2823 into play.

Barring another extended crypto sell-off, however, Stellar’s Lumen should steer clear of sub-$0.028 levels. The second major support level sits at $0.2776.

Looking at the Technical Indicators

First Major Support Level: $0.2879

First Major Resistance Level: $0.3141

23.6% FIB Retracement Level: $0.3187

38% FIB Retracement Level: $0.2823

62% FIB Retracement Level: $0.1850

Tron’s TRX

Tron’s TRX slid by 3.17% on Tuesday. Reversing a 3.42% rally from Monday, Tron’s TRX ended the day at $0.03089.

A mixed start to the day saw Tron’s TRX rise to a late morning intraday high $0.03269 before hitting reverse.

Falling short of the first major resistance level at $0.03311, Tron’s TRX slid to a late intraday low $0.03029.

Steering clear of the first major support level at $0.02957, Tron’s TRX revisited $0.0316 levels before sliding back into the deep red.

At the time of writing, Tron’s TRX was down by 0.18% to $0.03143. A mixed start to the day saw Tron’s TRX rise to an early morning high $0.03211 before falling to a low $0.03102.

Tron’s TRX left the major support and resistance levels untested early on.

TRXUSD 200121 Daily Chart

For the Day Ahead

Tron’s TRX would need to avoid a back fall through the $0.03129 pivot to bring the first major resistance level at $0.03229 into play.

Support from the broader market would be needed, however, for Tron’s TRX to break back through to $0.032 levels.

Barring an extended crypto rally, the first major resistance level and Tuesday’s high $0.03269 would likely cap any upside.

In the event of an extended rally Tron’s TRX could resistance at $0.034 before any pullback. The second major resistance level sits at $0.03369.

Failure to avoid a fall back through the $0.03129 pivot would bring the first major support level at $0.02989 and the 23.6% FIB of $0.0291 into play.

Barring an extended sell-off on the day, Tron’s TRX should steer clear of sub-$0.029 levels. The second major support level at sits at $0.02889.

Looking at the Technical Indicators

First Major Support Level: $0.02989

First Major Resistance Level: $0.03229

23.6% FIB Retracement Level: $0.03211

38.2% FIB Retracement Level: $0.0428

62% FIB Retracement Level: $0.0648

Please let us know what you think in the comments below

Thanks, Bob

The Crypto Daily – Movers and Shakers – January 20th, 2021

Bitcoin, BTC to USD, fell by 2.17% on Tuesday. Reversing a 2.22% gain from Monday, Bitcoin ended the day at $35,890.0.

It was a mixed start to the day. Bitcoin rose to an early morning high $37,450.0 before hitting reverse.

Falling short of the first major resistance level at $37,889, Bitcoin slid to a mid-morning low $36,299.0.

Steering clear of the first major support level at $35,176, however, Bitcoin rallied to a late afternoon intraday high $37,936.6.

Continuing to fall short of the first major resistance level at $37,889 Bitcoin slid to a final hour intraday low $35,863.0.

In spite of the late sell-off, Bitcoin continued to steer clear of the first major support level at $35,176.

The near-term bullish trend remained intact, in spite of the latest reversal. For the bears, Bitcoin would need to slide through the 62% FIB of $18,504 to form a near-term bearish trend.

The Rest of the Pack

Across the rest of the majors, it was another mixed day on Tuesday.

Binance Coin and Chainlink slid by 6.05% and by 6.79% respectively to lead the way down.

Cardano’s ADA (-1.04%) also saw red on the day.

It was a bullish start to the week for the rest of the majors, however.

Ethereum rallied by 8.70% to lead the way.

Crypto.com Coin (+5.12%), and Ripple’s XRP (+2.87%) also found strong support.

Bitcoin Cash SV (+0.10%), Litecoin (+0.06%) and Polkadot (+0.92%) trailed the front runners, however.

In the current week, the crypto total market cap fell to a Monday low $958.80bn before rising to a Tuesday high $1,080.72bn. At the time of writing, the total market cap stood at $1,029.91bn.

Bitcoin’s dominance rose to a Monday high 67.47% before falling to a Tuesday low 65.20%. At the time of writing, Bitcoin’s dominance stood at 65.65%.

This Morning

At the time of writing, Bitcoin was up by 1.14% to $36,298.6. A mixed start to the day saw Bitcoin fall to an early morning low $35,602.0 before rising to a high $36,353.0.

Bitcoin left the major support and resistance levels untested early on.

Elsewhere, it was a mixed start to the day.

Binance Coin (-0.33%) and Chainlink (-1.85%) saw red to buck the trend early on, with Bitcoin Cash SV flat.

It was a bullish start for the rest of the majors, however.

At the time of writing, Crypto.com Coin was up by 4.04% to lead the way.

BTCUSD 200121 Hourly Chart

For the Bitcoin Day Ahead

Bitcoin would need to avoid a fall through the pivot level at $36,563 to bring the first major resistance level at $37,263 into play.

Support from the broader market would be needed for Bitcoin to break back through to $37,000 levels.

Barring an extended crypto rally, first major resistance level and Tuesday’s high $37,936.6 would likely cap any upside.

In the event of an extended crypto rally, Bitcoin could test resistance at $40,000 before any pullback. The second major resistance level sits at $38,637.

Failure to avoid a fall through the $36,563 pivot would bring the first major support level at $35,190 into play.

Barring an extended crypto sell-off, Bitcoin should steer clear of sub-$35,000 levels. The second major support level sits at $34,490.

Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – January 20th, 2021

Ethereum

Ethereum rallied by 8.70% on Tuesday. Following on from a 2.10% gain on Monday, Ethereum ended the day at $1,368.04.

A mixed start to the day saw Ethereum fall to an early morning intraday low $1,252.01 before making a move.

Steering clear of the first major support level at $1,207, Ethereum rallied to a mid-day intraday high and a new swing hi $1,440.00.

Ethereum broke through the day’s major resistance levels before a pullback to sub-$1,330 levels.

The pullback saw Ethereum fall back through the third major resistance level at $1,392.

Steering clear of the second major resistance level at $1,313, Ethereum revisited $1,400 levels before ending the day at sub-$1,370 levels.

At the time of writing, Ethereum was up by 1.34% to $1,386.34. A mixed start to the day saw Ethereum fall to an early morning low $1,356.16 before striking a high $1,397.24.

Ethereum left the major support and resistance levels untested early on.

ETHUSD 200121 Hourly Chart

For the day ahead

Ethereum would need to avoid a fall through the pivot level at $1,353 to support a run at the first major resistance level at $1,455.

Support from the broader market would be needed, however, for Ethereum to break out from Tuesday’s high $1,440.00.

Barring an extended crypto rally, the first major resistance level would likely cap any upside.

In the event of another extended crypto rally, Ethereum could test resistance at $1,600 before any pullback. The second major resistance level sits at $1,541.

Failure to avoid a fall through the $1,353 pivot would bring the first major support level at $1,267 into play.

Barring an extended sell-off, however, Ethereum should steer clear of sub-$1,200 levels. The second major support level sits at $1,165.

Looking at the Technical Indicators

First Major Support Level: $1,267

Pivot Level: $1,353

First Major Resistance Level: $1,455

23.6% FIB Retracement Level: $1,119

38.2% FIB Retracement Level: $921

62% FIB Retracement Level: $600

Litecoin

Litecoin rose by 0.06% on Tuesday. Following on from a 6.39% gain on Monday, Litecoin ended the day at $151.90.

A mixed start to the day saw Litecoin fall to an early morning intraday low $150.17 before making a move.

Steering clear of the first major support level at $141.77, Litecoin surged to a late morning intraday high $166.21.

Litecoin broke through the first major resistance level at $158.50 and the second major resistance level at $165.11.

More significantly, Litecoin broke back through the 23.6% FIB of $148.

A bearish second half of the day, however, saw Litecoin fall back through the resistance levels to end the day at sub-$152 levels.

At the time of writing, Litecoin was up by 1.13% to $153.61. A mixed start to the day saw Litecoin fall to an early morning low $149.68 before striking a high $154.14.

Litecoin left the major support and resistance levels untested early on.

LTCUSD 200121 Hourly Chart

For the day ahead

Litecoin would need to move through the $156.09 pivot level to support a run at the first major resistance level at $162.02.

Support from the broader market would be needed, however, for Litecoin to break back through to $160 levels.

Barring an extended crypto rally, the first major resistance level and Tuesday’s high $166.21 would likely cap any upside.

In the event of an extended breakout, Litecoin could test resistance at $180. The second major resistance level sits at $172.13.

Failure to move through the $156.09 pivot level would bring 23.6% FIB of $148 and the first major support level at $145.98 into play.

Barring an extended sell-off, Litecoin should steer clear of the second major support level at $140.05.

Looking at the Technical Indicators

First Major Support Level: $145.98

Pivot Level: $156.09

First Major Resistance Level: $162.02

23.6% FIB Retracement Level: $148

38.2% FIB Retracement Level: $125

62% FIB Retracement Level: $87

Ripple’s XRP

Ripple’s XRP rose by 2.87% on Tuesday. Following on from a 2.77% gain on Monday, Ripple’s XRP ended the day at $0.29424.

Tracking the broader market, Ripple’s XRP fell to an early morning intraday low $0.28415 before making a move.

Steering clear of the first major support level at $0.2751, Ripple’s XRP jumped to a mid-morning intraday high $0.32960.

Ripple’s XRP broke through the day’s major resistance levels and the 23.6% FIB of $0.3172.

It was bearish through the remainder of the day, however.

Ripple’s XRP fell back through the third major resistance level at $0.3157 and the second major resistance level at $0.2988.

More significantly, Ripple’s XRP also fell back through the 23.6% FIB of $0.3172.

Finding support at the first major resistance level at $0.2921, however, Ripple’s XRP wrapped up the day at $0.294 levels.

At the time of writing, Ripple’s XRP was up by 0.12% to $0.29460. A mixed start to the day saw Ripple’s XRP fall to an early morning low $0.29044 before rising to a high $0.29494.

Ripple’s XRP left the major support and resistance levels untested early on.

XRPUSD 200121 Hourly Chart

For the day ahead

Ripple’s XRP will need to move through the $0.3027 pivot level to bring the first major resistance level at $0.3212 into play.

Support from the broader market would be needed, however, for Ripple’s XRP to break back through the 23.6% FIB of $0.3172.

Barring an extended crypto rally, the first major resistance and Tuesday’s high $0.3296 would likely cap any upside.

In the event of another extended rally, Ripple’s XRP could test resistance at $0.35 levels. The second major resistance sits at $0.3481.

Failure to move through the $0.3027 pivot would bring the first major support level at $0.2757 into play.

Barring an extended crypto sell-off, Ripple’s XRP should steer clear of sub-$0.27 levels. The second major support level sits at $0.2572.

Looking at the Technical Indicators

First Major Support Level: $0.2757

Pivot Level: $0.3027

First Major Resistance Level: $0.3212

23.6% FIB Retracement Level: $0.6274

38.2% FIB Retracement Level: $0.5285

62% FIB Retracement Level: $0.3687

Please let us know what you think in the comments below.

Thanks, Bob

European Equities: COVID-19 and U.S Politics in Focus

Economic Calendar:

Wednesday, 20th January

German PPI (MoM) (Dec)

Eurozone Core CPI (YoY) (Dec) Final

Eurozone CPI (MoM) (Dec) Final

Eurozone CPI (YoY) (Dec) Final

Thursday, 21st January

ECB Interest Rate Decision (Jan)

ECB Press Conference

Eurozone Consumer Confidence (Jan) Prelim

Friday, 22nd January

French Manufacturing PMI (Jan) Prelim

French Services PMI (Jan) Prelim

German Manufacturing PMI (Jan) Prelim

German Services PMI (Jan) Prelim

Eurozone Manufacturing PMI (Jan) Prelim

Eurozone Markit Composite PMI (Jan) Prelim

Eurozone Services PMI (Jan) Prelim

The Majors

It was a bearish day for the European majors on Tuesday. The CAC40 fell by 0.33%, with the DAX30 and EuroStoxx600 seeing losses of 0.24% and 0.19% respectively.

News from Germany of a lockdown extension to mid-February sent the European majors into the red.

In addition to an extended lockdown, the possibility of reintroducing border controls was also raised over concerns of new COVID-19 strains.

Sentiment had been more bullish early on, with a pickup in economic sentiment in Germany and the Eurozone providing support.

The Stats

Economic sentiment figures for Germany and the Eurozone and finalized German inflation figures were in focus.

For January, Germany’s ZEW Economic Sentiment Indicator rose from 55.0 to 61.8, with the current conditions indicator rising from -66.5 to -66.4.

Economists had forecasted an economic sentiment indicator of 60.0 and a current conditions indicator of -68.5.

For the Eurozone, the Economic Sentiment Indicator increased from 54.4 to 58.3.

On the inflation front, consumer prices increased by 0.5% in December in Germany, which was in line with prelim figures. Consumer prices had fallen by 0.8% in November.

According to Destatis,

  • Consumer prices were down by 0.3% on the same month a year earlier.
  • A temporary reduction in value added tax contributed to the fall in consumer prices.
  • Energy product prices slid by 4.8%. Prices had risen by 1.4% in 2019.
  • Prices of goods were down by 0.4% on 2019, while prices of services rose by 1.3%.

From the U.S

There were no material from the U.S.

The Market Movers

For the DAX: It was a mixed day for the auto sector on Tuesday. Volkswagen rose by 0.81% to buck the trend on the day. BMW and Daimler fell by 0.95% and by 1.22% respectively, while Continental saw more modest loss of 0.59%.

It was a mixed day for the banks, however. Deutsche Bank slid by 3.90%, while Commerzbank rose by 0.14%.

From the CAC, it was a bearish day for the banks. BNP Paribas fell by 1.55%, with Credit Agricole and Soc Gen sliding by 2.24% and by 2.39% respectively.

It was a mixed day for the French auto sector. Peugeot ended the day flat, while Renault fell by 1.30%.

Air France-KLM fell by 0.72%, while Airbus SE ended the day with a modest 0.12% gain.

On the VIX Index

It was back into the red for the VIX on Tuesday. Reversing a 4.69% gain from Friday, the VIX fell by 4.52% to end the day at 23.24. On Monday, the U.S markets had been closed.

The NASDAQ rallied by 1.53%, with the Dow and the S&P500 rising by 0.0.38% and by 0.81% respectively.

Support for more fiscal stimulus delivered support to the U.S markets after the Monday holiday.

Former FED Chair Yellen, nominee for Treasury Secretary talked of support for a sizeable fiscal stimulus package.

Coupled with the incoming administration’s plans to drive vaccinations, hopes of a speedier economic recovery drove the main indexes to fresh record highs.

VIX 200121 Daily Chart

The Day Ahead

It’s a quiet day on the economic calendar. Inflation figures from Germany and the Eurozone are due out later today.

We don’t expect the numbers to have any material impact on the European majors, however.

It’s Inauguration Day, so expect Biden’s immediate plans upon taking office to be the main area of focus.

Yellen’s support for further economic stimulus should deliver some comfort going into the open.

COVID-19 news will also continue to influence, however.

The Futures

In the futures markets, at the time of writing, the Dow Mini was up by 46 points.

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

US Stock Market Overview – Stock Rally Led by Energy and Technology

U.S. stocks moved higher on Tuesday, led by gains in the Nasdaq. Growth and value were both strong. Most S&P 500 index sectors were higher, led by gains in energy and technology, real-estate bucked the trend. Janet Yellen was on the hill testifying for her confirmation hearing in front of the senate. She said she would focus on the American worker if confirmed. U.S. Yields moved lower along with the dollar as crude oil prices moved higher. Netflix reported after the closing bell, beating expectations on the top and bottom line. The stock immediately popped more than 5%. The company said in a statement that they no longer will need to raise capital by external financing. Money will now go to stock buybacks. Goldman Sachs reported financial results before the opening bell. Gains in trading and investment banking drove the better than expected top and bottom line.

Yellen Hearing to Be Treasury Secretary was Held on Tuesday

Janet Yellen told lawmakers she would make the needs of America’s workers her core focus if confirmed as the next U.S. Treasury secretary. The former Chair of the Federal Reserve said that she would ensure the U.S. has a competitive economy that offers good jobs and wages workers in cities and rural areas.

Goldman Reported Better than Expected Results

Goldman Sach reported a profit of $4.51 billion in the Q4 or $12.08 per share, which was more than double Goldman’s profit from the same quarter a year ago. Both quarterly net income and quarterly revenue of $11.74 billion were much better than the expectations of of $7.39 a share on revenue of $9.99 billion.