Macro Morning (go Europe!)

marketmorning

by Chris Becker

Risk markets, particularly in Europe exploded last night even as German factory orders tumbled, European consider confidence weakened further and the BOE held fire on interest rates and its own QE program steady. It was news out of the ECB that stimulus measures are all but certain to be announced at the January 22nd meeting. The Eurostoxx 50 index closed up nearly 4%!

This was mainly lead by the French CAC40, up 3.6%,  and the German DAX30 up 3.3% bouncing off its daily trendline, but about to hit overhead resistance at the Christmas/NY highs:

Chart DAX30, D1, 2015.01.08 21:30 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The UK FTSE100 was a little weaker, relatively and its overall technical picture is not as bullish as the Germans. Obviously, this mood carried across to US stocks, where falls in the weekly jobless claims helped brighten the mood. It was a near 2% gain across the board, with the S&P500 making good on its mid week bounce, but also approaching resistance at the 2070 level:

Chart SP500, H4, 2015.01.08 21:31 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

SPI futures are up more than 40 points pointing to a circa 1% gap up on the open of the ASX200 later this morning.

In currency land, Yen stayed above 119 and didn’t provide much movement in the NYLON sessions. Euro however collapsed through the 1.18 handle and remains solidly under pressure:

Chart EURUSD, H1, 2015.01.08 21:34 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

As does Cable (GBPUSD) which can’t get above 1.5120 on the four hourly/daily charts, but there is a potential bottom forming here:

Chart GBPUSD, H4, 2015.01.08 21:35 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The Aussie battler continues to do better in a risk on mood, but it needs to breach 81.60 levels before we get too excited. A move up to 85 cents is probable as part of a medium term distribution before another leg down later in the year:

Chart AUDUSD, H1, 2015.01.08 21:36 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The goldbugs need to be patient as the shiny metal continues to form a base, but remains in a daily downtrend, although support at $1200USD per ounce is growing stronger:
Chart XAUUSD, D1, 2015.01.08 21:37 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

While oil continues to fall. The breakout in WTI from yesterday has failed to gain traction and hits resistance at $49USD per barrel – there is potential here, but this is weak so far:
Chart CL-OIL, H1, 2015.01.08 21:39 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The data calendar ramps up into the most closely watched release – the monthly US NFP or unemployment figures later tonight. Before that in Asia we get Australian PCI and retail sales for November , Chinese CPI and Japanese leading index. In Europe this evening its Swiss unemployment and CPI, German and British industrial production.

So a busy night!

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